From Medical School Straight Into...Business

HOST:\u0010There's an interesting trend growing in medical schools - students graduating as doctors but going straight into business instead of practicing medicine - starting healthcare companies, running hedge funds, consulting. Bloomberg's Anne Mostue reports.\u0010REPORTER: Here on the Harvard Medical School campus, Matthew Alkaitis is a 29-year old, third-year student. He lives just a few blocks away and right now he’s studying up to 14 hours a day for his board exams. He’s friendly, a good listener with a warm smile – the kind of bedside manner you want in a doctor. But he’s not sure he’ll end up in a hospital or clinic. \u0010“I came into medical school unsure of what my overall direction was but wanting to explore that a bit further. And so I spent the majority of my first two years building out a prototyping lab. And I also worked for Flagship Ventures,” Alkaitis says.\u0010Alkaitis has been working for a venture capital firm to pursue his interest in biotech. Now he’s about to enter a two-year fellowship at McKinsey & Company, the global management consulting firm.\u0010“I really hope that my career involves a period of dedicated time taking care of patients,” Alkaitis says. “But I also have this competing goal to one day either start or help build out a company that really adds something new and interesting and innovative to the medical system.”\u0010 Alkaitis’ situation is becoming more common. More people are going to medical school and choosing not to practice medicine. Instead, many are going into business – starting biotech and medical device companies, running hedge funds, consulting.\u0010The Physician’s Foundation and healthcare recruitment firm Merritt Hawkins recently surveyed 17 thousand doctors. 13.5% plan to seek a non-clinical job within 3 years. That’s up from 9.9% in 2012.\u0010And a survey of final-year medical residents, also from Merritt Hawkins, asks “If you were to begin your education again, would you study medicine or would you select another field?” 25% said another field. Their biggest concerns? Lack of free time, educational debt, earning a good income and dealing with third party payers.\u0010“It’s difficult, we look at all the various factors happening in healthcare and changing it as an occupation.”\u0010Mark Smith is president of Merritt Hawkins.\u0010“I think it’s easily the most managed and regulated profession so they really no longer control or have as much influence over their own destiny.”\u0010But there’s tension over the decision to go from medical school into business, because the United States has a persistent shortage of doctors, especially in rural areas. The Association of American Medical Colleges projects that by 2025 there will be a shortfall of up to 90 thousand doctors.\u0010“The physician shortage is upon us and I think it’s only going to get worse. I think that we are at a crossroads.” \u0010Dr. Kevin Campbell is a cardiologist in Raleigh, North Carolina. \u0010“I trained in medical school in the early 90s. Back then you definitely were thought of as a sell-out or a second class citizen if you weren’t going into clinical medicine.”\u0010The effect of a doctor shortage on patient care is complicated, according to the Association of American Medical Colleges. It’ll likely mean longer wait times for appointments, and also more demand for nurses and physicians assistants.\u0010 Now, more than 74 schools are offering MD-MBA programs. And enrollment has doubled since 2003.\u0010 Management consulting firms such as McKinsey are actively recruiting doctors, sending them to work with hospitals or hospital networks, insurance companies or state government.\u0010 At Harvard Medical School, in a class of about 160 students, about 14 will pursue an MD-MBA, and another 25 or 30 will do master’s degrees in other areas – law, public policy. A handful will not do a residency, instead going straight into other work. That’s according to Dr. Anthony D’Amico, a professor of radiation oncology at Harvard and an advisory dean.\u0010 “It’s not for everyone. We have some students who come here who want to go back to the Midwest and practice in a community setting. And that’s important because that’s where most of medicine is practiced,” D’Amico says. “And then we have students who come here who have an interest in medicine not necessarily to practice, but more to implement skill sets that they’ve been blessed with and apply on a broader scale, to come up with healthcare management plans, or just thinking about healthcare of the future.”\u0010 D’Amico, who is advising student Matthew Alkaitis, points out that in cities where there are plenty of doctors, it’s perhaps more acceptable for medical students to go straight into business. He says it’s important to recognize each student’s individual skills and passions.\u0010 One recent Harvard Medical School graduate, Ailis Tweed-Kent, first studied engineering at Notre Dame. \u0010 “Coming out of college, actually, I looked at consulting jobs. So I think early on that was the trifecta. I was looking at business, at engineering jobs and also at medical school. And I think starting a company, being an entrepreneur is a way to bridge all three of those worlds,” Tweed-Kent says. \u0010She completed her residency and in 2013, inspired by patients with osteoarthritis, shifted her focus onto drug delivery and founded Cocoon Biotech. We’re here in her lab.\u0010“There were certainly those folks, particularly in residency, the clinicians who were practicing full-time, there were a few who were a bit skeptical about why you might want to pursue something outside clinical medicine. Certainly, it took some time to convince individuals that this was not antagonistic to medicine, and clinical medicine, but rather synergistic.” \u0010Tweed-Kent still practices internal medicine a few days a month. \u0010This culture shift of practicing medicine and going into business is exciting to those who are taking part. And they’ve gotten creative. Doctor-Investor Rodney Altman of San Francisco says working occasionally in a local emergency room informs his day-to-day work. He’s a managing director at Spindletop Capital, a growth equity firm, investing in commercial stage healthcare companies.\u0010“I really wanted to practice healthcare on a macro level, and have what I felt was a greater impact. For me the one-on-one interaction with patients, while important and rewarding, wouldn’t have been as rewarding as being able to impact a larger number of patients,” Altman says.\u0010Altman says his mentors and colleagues had mixed feelings when, after a decade of practicing full-time, he decided to pursue private equity work.\u0010“Most people were supportive, a lot were envious, and some appropriately cautioned me about the risks that I would be taking. When you put yourself out in the business world you’re subject to the whims of the capital markets and to a lot more that is out of one’s control. There are more frequent job changes. It’s much more risky. So I think medicine is quite safe and secure in that way.”\u0010It’s a point that the others make clear – doctors don’t leave medicine because of greed. Jon Bloom, CEO of Podimetrics, is working in Somerville, Massachusetts on a mat device that predicts and prevents diabetic foot ulcers. He practiced anesthesia for three months after his residency, then went on to MIT’s Sloan School of Management. He was inspired by other doctors he knew who were inventors and entrepreneurs.\u0010“I couldn’t believe what else you could do with medicine,” Bloom says. “You could treat one patient at a time, which is amazing as a doctor, but he’s trying to solve population problems, he’s trying to solve bigger problems, and it was really inspiring to think about. That got me thinking about business school.” \u0010Bloom says that although his Podimetrics Mat has received significant funding, approval from the U.S. Food and Drug Administration and is on the market…he’s still living the startup life.\u0010“I definitely don’t make nearly as much as what a doctor makes. That wasn’t really important to me. But definitely as I look to my friends who graduated residency many years ago, they have multiple cars, fabulous houses, they did ok. I still occasionally eat my ramen noodles,” Bloom says, laughing.\u0010In the end, the doctors who leave clinics and hospitals are almost always staying in the healthcare field. As Harvard Medical Student Matthew Alkaitis says, all who go to medical school share the goal of saving lives.\u0010“Overall, the improvement in collaboration between entrepreneurial-minded folks, business-minded folks and academic- minded folks is where we’re really going to draw the necessary pieces to put together innovative new ways of delivering care or developing capabilities to treat disease that we don’t currently have,” Alkaitis says. “That’s why you come to medical school. You want to treat disease.”

Jun 29, 2017

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