In 2010, Wes Taylor shut down his Utah construction company, moved to Minnesota and entered graduate school to become a healthcare executive. Two years later, as he ended his program at the University of Minnesota, Taylor's job hunt began.
In pursuit of a management fellowship, he crossed the country to meet with executives of prominent health systems such as Kaiser Permanente and the Mayo Clinic. Again and again, Taylor was asked his opinion about the effects of the far-reaching healthcare reform law enacted the same year he entered school.
In Boston, senior executives at Massachusetts General Hospital pressed for his analysis of whether the academic medical center should embrace accountable care, an emerging payment and delivery model that seeks to more closely tie hospital revenue to quality and spending control.
“It's a huge question,” says Taylor, who is now eight months into a two-year administrative fellowship at the University of Pennsylvania Health System in Philadelphia.
It's one of many changes shaping the U.S. health system in the three years since the Patient Protection and Affordable Care Act became law. It's also raising questions about how graduate programs in healthcare management are adapting to prepare the next generation of executives for the coming upheaval.
Many of the law's major provisions go into effect at the end of the year, when a massive expansion of health insurance coverage is scheduled to start. But some of the law's early provisions have already started a shift in how Medicare pays hospitals, with more pay tied to how hospitals perform on quality, a trend expected to intensify.
Responses to the law so far have led to a wave of hospital consolidation. A proposed merger of Trinity Health and Catholic Health East, announced last October, would create the nation's second-largest not-for-profit health system. The news followed a proposed deal for 27 hospitals by the nation's largest not-for-profit health system, Ascension Health Alliance.
Other deals seek to unite one or more of the industry's sectors—insurance, hospitals, clinics, nursing and home care—under a single company. Major health systems including Sutter Health, Catholic Health Initiatives and Partners HealthCare have moved to acquire insurers, and insurers have moved to snap up medical groups and hospitals.
It's this rapidly changing market into which Taylor and other new health management graduates are seeking to launch careers that may some day place them at the head of a hospital or health system, an $837 billion sector of a complex and highly regulated industry.
For the colleges and universities that train the next generation of healthcare leaders, the wave of new regulation and heightened market activity has prompted new faculty hires and new curricula as programs seek to incorporate the healthcare reform law and changing business models into lesson plans. Jobs for healthcare managers and executives are projected to grow rapidly through the next decade, increasing by 22% though 2020, outpacing a projected 7% growth in overall management occupations, federal labor projections show.
How schools monitor and adapt to the market and to what degree they succeed in graduating students ready to enter the industry is unclear because such programs lack publicly available qualitative comparisons, something education officials say would be welcome.
The Association of University Programs in Health Administration “would be strongly in favor” of quantifiable metrics to compare programs, says Lydia Middleton, the trade group's president and CEO.
How programs adapt to changes in the health system and measures of whether students enter the workforce with needed skills, knowledge and abilities are reported to the Commission on Accreditation of Health Management Education for programs that seek accreditation, though measures that the programs report vary by institution.
All programs are required to report the job titles held by the three most-recent graduating classes and the job placement rate within three months after graduation.
But the commission does not publicly report data or how organizations achieve these criteria, says Anthony Wisniewski, president and CEO of CAHME. Accreditation itself represents a “seal of approval” for programs, he says.
The accrediting body requires, among other things, an outline of how programs monitor health system changes and adjust courses accordingly. Curricula should be tailored to cultivate abilities needed in the workplace and teach skills that include communication, critical thinking, problem solving, leadership and ethics, according to CAHME criteria.
Kyle Grazier, chairwoman of the University of Michigan's department of health management and policy, says that if the accreditation body could develop comparable measures for public use, “I think that would be a real gift to the field.”
Employers hiring new graduates, faculty candidates and prospective students have no comparable measures of program quality, she says. Poplar rankings by publications such as U.S. News & World Report lack transparency, she says. (Grazier's program ranked No. 1 last year.)
Wes Taylor, now in an administrative fellowship in Philadelphia, says he might need yet another degree to meet the industry’s rapidly changing needs.
Even before the healthcare reform law and the market's recent uptick in activity, health management educators were seeking to better define critical skills for the industry's leadership and assess new graduates' readiness.
One 2006 study found gaps between experienced healthcare executives and novice managers when it came to an assessment of critical abilities such as analytical and interpersonal skills, including a grasp of their own strengths and weaknesses.
Veteran executives working with recent graduates say they believe new entrants are emerging from school ready for the industry's changes. “Most programs seem to be adapting with the times,” says Terry Akin, president and chief operating officer with Cone Health, Greensboro, N.C., who has worked with new managers in fellowship programs for two decades. Most fellows “are fairly well versed when it comes to talking about the evolution of the healthcare system,” he says. One of Cone Health's recent fellows accepted a job with its newly created accountable care network, he says, a career move that Akin credits to the new manager's foresight.
Recent graduates also bring fresh perspectives to an industry seeking to fundamentally reshape its operations.
New entrants to healthcare management “weren't part of the last 20 years of healthcare,” and therefore aren't tied to existing business models, says Michelle Thoma, who is in her first year of a two-year fellowship at Barnes-Jewish Hospital in St. Louis, after earning a master's of health administration from Virginia Commonwealth University.
“We're perhaps more open than we otherwise would have been,” she says. “Sometimes people say healthcare is changing so rapidly, well that's the only thing we've ever known. It's easier for us to be comfortable with that change.”
Garry Scheib, COO of the University of Pennsylvania Health System, agrees. “It's not only change, it's the pace of change” that can be a challenge for veteran executives who may rely too heavily on prior experience and adopt a strategy “because we've always done it,” he says.
The University of Pennsylvania system more than a decade ago began hiring two administrative fellows each year in an effort to build up its management depth. The program seeks to recruit candidates with some business or healthcare experience, says Scheib, who works with fellows and says he has found them “well-prepared, willing and helpful.”
New graduates think more broadly about healthcare than perhaps industry veterans do, says Rick Majzun, vice president of strategic operations and planning for St. Louis Children's Hospital and preceptor for fellowships.
“I took one public health course,” he says. But increasingly, new graduates are entering the workforce with a grasp of population health and a network that extends beyond hospitals into community organizations and public agencies.
Majzun says he is frequently impressed with novice managers' communication skills. Less well-developed is their ability to work with physicians and nurses, a skill he says should be developed early in the graduate programs. “The earlier you can do it, the better you get and the more comfortable you get,” he says.
Greta Gilbode, an administrative coordinator for perioperative services in her second year as an administrative fellow with the University of Pennsylvania system, says graduate school helped to improve her business acumen as she changed careers from healthcare marketing to management.
But work experience as a fellow has proved to be “the most valuable thing for my career,” says Gilbode, who earned a master's in business administration with a concentration in healthcare from St. Joseph's University in Philadelphia. On the job is where she learns to manage operations.
“That's something I think you can't learn in the classroom,” she said.
Universities with graduate business programs tailored to healthcare turn to alumni in the workforce and faculty who conduct research or participate in public policy debates to keep abreast of changes in the market that should be incorporated in the classroom, school officials say. But with significant market changes under way, the industry will likely “pull the educational programs along to catch up,” says Daniel Zismer, an associate professor and director of graduate studies in healthcare management at the University of Minnesota.
Zismer says consolidation of hospitals and payers and increasing financial risk for hospitals under new payment models will require greater knowledge that's more common to public health issues such as population-health management, social psychology of behavior, epidemiology and how best to effectively care for patients over time.
That has also squeezed time for courses that are increasingly less relevant, he says, such as lessons in hospital affiliations with solo private-practice physicians as more doctors seek employment with hospitals.
The University of Minnesota's program, he says, is adding coursework on population health and risk adjustment. The school also recently recruited a physician executive from the Twin Cities health system HealthPartners to teach managing the cost of care as providers face increasing financial risk and pressure to curb spending. HealthPartners developed cost measures endorsed by the National Quality Forum.
William Henry, the University of Minnesota program's associate director, says schools are also striving to get ahead of the industry's rapid push to measure quality, an area where “everybody is trying to get better quicker.” That will require development of new quality measures.
“We're pretty good at telling you how many people got out of the hospital within a week of surgery, but it's a lot more difficult to assess 30-year outcomes in people with diabetes,” he says.
For Taylor, the demands of quality improvement and working closely with physicians might mean a return to school for a clinical degree. His business expertise adds value, he says, “but the leadership, those who are going to be able to lead healthcare and really make change, are going to be clinical and business,” leaders, he says.