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Taking Care of Business

Owen Graduate School and VUMC partner to combine clinical understanding and business acumen

By Paul Govern
August 2012

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C. Wright Pinson earned his MBA in 1976 as a young engineer at IBM, and when he later embarked on a career in academic surgery and began submitting studies to medical journals, he was told by a senior faculty member that it would be best if he never included his MBA in his list of credentials.

Health care has changed since then.

Clinicians with business skills today are recruited for the top spots in academic medicine. The deepening Vanderbilt Owen Graduate School of Management-VUMC relationship is a sign of the times.

“The issues that we face in the delivery of health care are at a critical turning point,”  said Pinson, deputy vice chancellor for Health Affairs and CEO of the Vanderbilt Health System (MD ’80). “This business is going to change based on the shift in available funding. This will create extraordinary pressures that will require discontinuous, innovative solutions. The people engaged in finding those solutions will have a tremendous opportunity to make a monumental and valuable contribution to our society.”

Tim Vogus, Ph.D., is one of those people. He is an assistant professor at Owen, but is often found walking the halls of the Vanderbilt Heart and Vascular Institute, where he surveys employees, helps design new safety practices, and provides consultation services to the leadership team.

Tim Vogus, Ph.D., helped design a safety and quality curriculum for staff and faculty at VUMC. Photo by Joe Howell.

Tim Vogus, Ph.D., helped design a safety and quality curriculum for staff and faculty at VUMC. Photo by Joe Howell.

Standing at the intersection where health care and business meet, Vogus studies organizational culture as a foundation for health care safety and reliability. He uses employee surveys to gain views into that world.

“What a culture survey ideally can do is give you a leading indicator of outcomes. If our culture is problematic, that’s probably an indicator that we may be yet to experience some bad errors.”

According to Vogus, the study of safety lapses is too narrow a basis for improvement. “Culture gives a better sense of what the true underlying causes for something are. But culture is not static, it’s not, ‘OK, we’ve got a great culture, we’re done.’ Culture needs to be re-accomplished and re-enacted over and over again.”

A Model Relationship
Addressing the health care cost crisis, while also improving quality and safety, will require a combination of clinical understanding and business acumen, and it has accordingly become common for VUMC physicians and staff to enroll at Owen, and for Owen faculty and students to do work at the Medical Center.

A vibrant strategic interplay has developed between these two components of the University, fostered by Pinson and Larry Van Horn, Ph.D., associate professor of Management and executive director of Health Affairs at Owen. Pinson lectures at Owen, where he holds a secondary faculty appointment, while Van Horn teaches in the Master of Public Health program at the School of Medicine.

“What we do here is a unique relationship in the world of business school-medical center combinations. You would be hard pressed to find another program with richer, deeper, more productive relationships between the business school and the medical center than what you’ll find here,” Van Horn said.

Owen takes full advantage of Nashville’s being a health care industry headquarters. According to Van Horn, approximately 30 percent of Owen graduates go into health care, and he estimates this to be the highest ratio among all U.S. graduate schools of business.

The Bottom Line
Van Horn studies the economics of health care.

“I’m about cost — money, economics, finances. I would argue that’s the No. 1 challenge facing our industry. Health care is $2.6 trillion of spend, one out of every six or eight Americans is working in health care, 50 percent of health care is financed through government payers, and we’re running out of money. We’ve got some big challenges. I think having more and more physicians who understand the economics, the business side, and how that is going to have to evolve and change, is a win. So I think there are some fundamentals that support this relationship [between Owen and VUMC] being a warm one,” Van Horn said.

Titus Daniels, M.D., MPH, M.M.H.C., has two iMacs sitting side-by-side on his desk, their displays linked to allow easier viewing of chunky spreadsheets detailing the individual performance of clinical faculty. In January Daniels became vice chair for Clinical Affairs in the Department of Medicine, a job that includes a focus on financial performance. In 2010, a couple of leaders at VUMC prompted him to enroll at Owen.

A vibrant strategic interplay between Owen and VUMC has been fostered by Larry Van Horn, Ph.D., left, and C. Wright Pinson, MBA, M.D. Photos by Daniel Dubois and Susan Urmy.

A vibrant strategic interplay between Owen and VUMC has been fostered by Larry Van Horn, Ph.D., left, and C. Wright Pinson, MBA, M.D. Photos by Daniel Dubois and Susan Urmy.

“We need to be able to maintain our financial standing — which really is about our clinical operations — in order to ensure that we have tools and infrastructure and processes necessary to support high-quality patient care,” Daniels said. “The training available from Owen helps solidify a formality in the thought process and the approach to problems, to ensure that we’re looking at delivering high-quality care while also understanding that we have to be fiscally responsible in how we do that.”

Statistician Bruce Cooil, Ph.D., M.S., the Dean Samuel B. and Evelyn R. Richmond Professor of Management at Owen, has used statistical modeling to aid diagnosis and treatment of coronary artery disease, and to predict cost and length of stay for various other types of patients. Cooil has recently been working with the Children’s Transformational Health Care Center at VUMC, testing the relevance of various patient data for measuring operating room (OR) efficiency.

“Bruce is assisting us in developing a model for true OR efficiency — something that we feel is very different from utilization,” said Tammy Wingo, Ph.D., MBA, director of business analytics at Monroe Carell Jr. Children’s Hospital and a former student of Cooil’s in the executive MBA program at Owen. “These developed metrics will serve as a window into the patient experience across the continuum of care, and therefore, can help us to improve our processes so that we not only become more efficient, but also deliver the highest quality patient care possible.”

Robin Steaban, R.N., VUMC associate chief nursing officer and chief administrative officer at the Vanderbilt Heart and Vascular Institute, receives weekly consultations from Owen’s Vogus. “He has helped us understand the science of safety and how to translate it into operations,” she said.

While most research on high-reliability operations — nuclear power, air traffic control, aircraft carriers — dwells on organizational structure, Vogus looks instead at interpersonal processes. “If you and I are working together on a nursing unit, what is it that we’re doing together, both in interactions and behaviorally, to make it highly reliable? That’s really the focus of my research and that’s what I’ve been studying and assessing with VHVI and others.”

Vogus and an Owen colleague, associate professor Ranga Ramanujam, Ph.D., helped design a safety and quality curriculum for staff and faculty at VUMC (including the new year-long Vanderbilt Patient Safety and Quality Pioneer Program). Ramanujam, who studies how organizational structure and processes affect health care outcomes, says safety and reliability are about much more than front-line engagement and vigilance — they’re also about fostering collaboration and communication. And to make any headway, safety and reliability need to be seen as a priority at all levels of the organization. “Safety isn’t just about being safe, it’s about a broader set of managerial capabilities,” he said.

A Real-World View
Former industrial engineer Danny Bonn, M.M.H.C., is an administrative director with Vanderbilt Medical Group. He says a major strength of Owen’s M.M.H.C. is the way it combines evening lectures by Owen faculty with weekend lectures by people working in health care. “It gives you the real-world view of how health care looks at economics, marketing, accounting and so on. We were able to be informed of a lot of different things in a short period of time.”

Before entering Owen, Shellian Elliott, M.A., M.M.H.C., was an organizational learning specialist at VUMC. Today she manages the General Surgery Clinic, the Colorectal Surgery Clinic and the Burn Clinic. “My earlier background was in counseling and psychology. In my current role I’m looking at budgets and decisions that impact the bottom line, as well as working with people,” she said. “Where I am now is more balanced than my old training mode.”

We asked some Owen faculty members and their former students what may be in store for providers and health systems.

“What’s ahead is increased public scrutiny about errors and reliability,” said Owen’s Ramanujam. “What we’re going to see is much more attention to thinking about the process of delivery very systematically. Even if an organization is very reliable today, the reality is they will increasingly face a shrinking margin for error, so what seems safe enough today may not seem safe enough tomorrow. That would mean you would need to keep coming up with ways to become more and more reliable.”

VUMC’s Daniels said provider accountability will increase across the board, an increased role for primary care will be a keystone of reform, and highly compensated, procedure-based clinicians stand to be most impacted as payers discontinue fee-for-service in favor of global payments.

VUMC’s Mark Kelley, M.D., who earned the Master of Management in Health Care degree from Owen, looks for major changes, as well.

“We all believe there needs to be fundamental reform across the board.

The tricky question is, is the right way to do that moving toward a government-run single payer system, or is it a system that’s still a private system but with a very different set of incentives for the providers and for the patients?

“Everybody still wants everything for not so much money, and many people think the people delivering health care are the problem. There needs to be a readjustment of expectations on both sides, and I’m just not sure everyone is ready for that.

“At least we’re probably more prepared to deal with change once we’ve been through a program like Owen. You can learn to adapt, and try to figure out where the opportunities are.”




Play Video

The Business of Medicine

With the changes under way in health care, the business of medicine is in great need of new ideas and tools to increase quality and efficiency. Hear how an Owen Graduate School expert believes safety can benefit from a business angle on medicine.

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