It makes sense that Vanderbilt University’s Owen Graduate School of Management would be the U.S.’s — and the world’s — leading business school for MBAs headed into the healthcare field. The school is located in Nashville, Tennessee, the healthcare industry capital of the U.S., responsible for a global economic impact of nearly $80 billion and more than half a million jobs in everything from biotech to pharmaceuticals to hospitals.
But even though it is located in the “Silicon Valley of Healthcare,” Vanderbilt didn’t really separate from the crowd in percentage of MBAs going into healthcare until last year. In its 2016 employment report, the Owen School reported that 24% of graduating MBAs found jobs in the healthcare industry, 7% more than the next closest school among the elite MBA programs in the U.S. and Europe — and a huge leap from previous years for the school itself.
Owen’s embrace of its city and that city’s dominate industry stems from M. Eric Johnson’s early days as dean in 2013, when he hired a consulting group to guide the strategic course of the school and its positioning in the marketplace. The group surveyed thousands of alumni as well as MBA recruiters and found that Owen MBAs are viewed as “every bit as sharp as the Wharton and Booth kids without the attitude.” And what’s more: “The key ‘ah-ha’ was that for much of the school’s life, it was often trying to create something different and special,” Johnson told Poets&Quants. “But we are like the Boston Pops. We are 50 faculty and we will never be 200. So how do we compete in a world where we will never rival Northwestern in marketing or Wharton in finance?”
IN HEALTHCARE, DEFINITELY A ‘SCHOOL TO WATCH’
Healthcare has long been a viable path for Vanderbilt MBAs. But in 2014, the industry accounted for just 11% of MBA jobs, putting it below consulting, financial services, and tech. In 2015, the healthcare number ticked up to 12% — still below those other three fields. But the most recent employment report shows healthcare becoming the Owen School’s No. 2 employment path, after only consulting (25%). And the trend looks to continue, as 14% of the Class of 2018 cited healthcare services or pharmaceuticals as their top previous industry experience — most of any industry.
Vanderbilt’s strong new direction comes as the school has seen improvement in a number of areas. Between 2014 and 2015, incoming student GMAT scores and undergraduate GPAs increased, and the school also saw a jump in placement rates (90.8% to 93%), starting base salaries ($100,513 to $108,255), and starting bonuses ($20,138 to $22,484). Meanwhile, Vanderbilt has been steadily climbing the B-school ranks, joining the conversation with the elite U.S. schools. Though the school placed 25th in the 2017 U.S. News & World Report rankings, down slightly from No. 22 in 2016, the Economist placed it 26th globally and 17th in the U.S., and Princeton Review last year named Vanderbilt No. 2 for Best Professors and No. 5 for Best Campus Environment. Poets&Quants put Owen on our list of 10 Business Schools to Watch in 2016.
For Vanderbilt MBAs, the healthcare options are many, helped by a curriculum that encourages mixing and matching of courses and concentrations. Healthcare MBA students select from focuses in accounting, finance, general management, human and organizational performance, marketing, operations, or strategy. For the healthcare concentration itself, the seven-week modular framework allows students the flexibility to take a variety of healthcare electives. Meanwhile, full-time MBA students can get approval to take courses for credit at other Vanderbilt graduate schools during their second year, meaning many students pursuing the Owen Healthcare MBA choose to take interdisciplinary classes at the medical school or the nursing school — or both. Owen also offers Master of Management in Healthcare and joint MD/MBA degrees.
As Dean Johnson told P&Q in 2016, “We have a robust healthcare focus. Nashville is the for-profit healthcare epicenter. One out of six hospital beds in the U.S. are managed out of Nashville, and the ecosystem that creates in the city and surrounding area is huge. Millennials like healthcare in general because it feels like they’re doing the world some good in it.”
MOST MBAs HEADED INTO HEALTHCARE IN 2016 CAME FROM HARVARD
Owen may be known as a healthcare-oriented school, but as Johnson pointed out, it’s a small school: The 24% may be a gaudy number, but it’s only a portion of a class of 175, meaning Owen produced 42 MBAs for the healthcare field in 2016. (Top 2016 employers, with four MBAs hired, were Procter & Gamble, DaVita, and McKesson, and with three MBAs hired, Johnson & Johnson.) Though it’s by far the most of any top school as a percentage of a whole class — the University of Minnesota’s Carlson School of Management is second at 17%, Duke University’s Fuqua School of Business is a distant third at 12%, and only one other school, Indiana University’s Kelley School of Business, reached double figures (10.3%) — a few schools actually graduated more healthcare-bound MBAs.
In fact, the most healthcare MBAs came from Harvard Business School, which sent 8% of its 2016 class of 935 students into that industry. That’s 75 total hires. Harvard has seen its healthcare MBA numbers tick up by 3 percentage points since 2014. The University of Pennsylvania Wharton School, the next closest school in pure numbers, sent 5.2% of its 2016 class of 850 students into healthcare. That’s 44 MBAs. Wharton has seen the share of its classes headed into healthcare dip since 2011, when it was 6.6%.
Duke, third in percentage of graduating MBAs going into healthcare, sent 25 Class of 2016 members into that industry, including all the top employers of MBAs: Eli Lilly (five), Johnson & Johnson (five), Genentech (three), Medtronic (two), and DaVita (one). Kelley, fourth on the 2016 list in percentage of healthcare MBAs, sent 19 into the industry, followed by 17 from Stanford Graduate School of Business (6%) and 16 from UC-Berkeley Haas School of Business (6.6%).
(See the next page for a list of top MBA healthcare programs, percentages of hires in the industry, median base salary, and median sign-on bonus.)