The MBA In The Heart Of The Healthcare Industry

Inside Management Hall, home of the Owen Graduate School of Management at Vanderbilt University. Marc Ethier photo

Vanderbilt Owen is 49 years old this year. That’s just one year younger than another Nashville icon, Hospital Corporation of America, the “granddaddy of the for-profit healthcare provider,” says Eric Johnson. HCA revolutionized the healthcare industry, and its story explains why Nashville became the healthcare capital of the U.S. — and why Vanderbilt became such an important healthcare school.

Before HCA, “You had this country full of individual hospitals, some were privately held, some were publicly held, some were for-profit,” Johnson says. “It was very fragmented. The whole idea behind HCA was to kind of roll up hospitals into a larger company and then build on scale advantages you could achieve out of that. So rather than every hospital having its own IT group, a lot of those service functions — IT, payroll, all the back-office stuff — could be centralized, and the hospitals could focus on delivery. That really was the idea behind HCA.

Today HCA is the largest of those hospital corps, managing 177 hospitals and 119 surgery centers in the U.S. and UK. What came behind it, Johnson says, is the whole industry of “healthcare as a service” — in particular the reality that at many hospitals, many of the employees are not employees of the hospital itself.

“So, for example, there was a whole roll-up of anesthesiologists, where now there’s a company based here and it actually does nothing but sell anesthesiology services to hospitals all over the country,” Johnson says. “ED doctors, same thing. Hospitalists, same thing. Skilled nursing, same thing. All these kind of different skill groups — radiology services are from another company, and they’re running around the hospital in scrubs and they look like they’re a hospital employee, but they don’t work for the hospital, they work for a company that’s providing a service to that hospital.

“And all of those companies, just so many of them, are here. They started here. They really were kind of an outgrowth of HCA, that concept, that kind of creating a service-based model around all these specialties. It just continues on and on and on, so now the big thing in Nashville these days are things like palliative care or post-acute care. You know, you have hip surgery and now you’ve got a rehab that’s gotta happen. How does that get managed, how does that get provided? And I think the reason why Americans wouldn’t think of Nashville as a healthcare city — because many of the names of those companies are not brands that are branded for consumers.”

EVERYTHING IN HEALTHCARE STARTS AT THE BEDSIDE

Source of healthcare full-time jobs for Vanderbilt Owen MBA graduates. Source: Vanderbilt Owen

Jeff Lenar graduated from the United States Naval Academy in May 2010 and immediately joined the Marine Corps. He spent seven years in the Corps before leaving active duty the summer of 2017 — but for 18 months prior to that the Atlanta native had planned to leave and go to business school. “I talked to some friends, mentors of mine, about what a career transition would look like and a lot of people specifically recommended looking at the healthcare industry and said a great way to make that jump is Vanderbilt Owen. ‘It’s in Nashville, it’s a great program, Nashville’s a huge healthcare town, and Owen is a very great school and they do a lot with healthcare.’

“So that led me initially to Owen. I started the application process and from the get-go I knew it was my number-one choice.”

Lenar, who will finish his MBA in the spring, plans to go to work for Nashville-based Acadia Healthcare, for which he interned this summer. He says that for healthcare-bound students, the Owen classroom experience is peerless. “I think we have some great professors that teach some great classes, and especially if you do not come from a healthcare background, like I didn’t coming out of the military, it’s very eye-opening from the get-go.

“Our first class that we take is Healthcare Economy and Policy, taught by Larry Van Horn, and it’s the opening to healthcare and what’s going on in the industry. It was a very eye-opening class for me.” Equally eye-opening: the immersion experience. Everything in healthcare, Lenar says, starts at the bedside.

“The healthcare industry is very vast, and in my personal opinion, it all originates at the bedside. You think of anything — the innovation, the technology, the M&A deals, I mean the entire industry — it starts at the bedside. So for me one of the most eye-opening experiences was shadowing a nurse. They’re in the trenches day in and day out, and it gives you great perspective. I already had a lot of respect for healthcare providers, but shadowing a nurse for like three hours gave me all kinds of respect for a very difficult job.”

‘IT’S JUST THE PLACE TO BE’

Vanderbilt Owen full-time healthcare offers 2008-2017. Source: Vanderbilt Owen

When it launched in 2005, the mission of the Vanderbilt Owen healthcare MBA program was to require more healthcare-specific courses than any other program of its kind in the nation. The explosion of the industry around the Vanderbilt campus in the years since has just been a bonus.

“It’s just the place to be,” Owen’s Director MBA Admissions Christie St. John tells Poets&Quants. “Why would you want to be anywhere else? Because you’ve got personalized attention — personalized services. All the alums, all the companies are right here at your fingertips.”

St. John was director of international relations at Vanderbilt Owen for six years until 2003, when she accepted a job at Dartmouth Tuck. When she returned to Nashville in 2012, she marveled at the change the city had undergone. It still amazes her.

“The odd thing is, years ago when I first worked here, nobody really wanted to stay in Nashville,” St. John says. “There wasn’t a lot going on then. And now even people from New York come down here and think, ‘I don’t want to leave.’”

DON’T MISS HEALTHCARE & THE MBA: AN INTERVIEW WITH VANDERBILT OWEN DEAN ERIC JOHNSON or VANDERBILT MOURNS LOSS OF ‘PART OF OWEN COMMUNITY FABRIC’