Getting a business degree wasn't part of Vivian Lee's, MD, career plan. Looking back, however, Dr. Lee said, "One of the best things I ever did was to go back to business school," according to Fortune.
Dr. Lee, who serves as dean of the University of Utah School of Medicine in Salt Lake City and CEO of its hospital system, said the business insights she gleaned from b-school are integral for healthcare leaders as the industry evolves toward value-based care.
"We're the only industry in the country that we don't really know the costs of running our business," Dr. Lee said at the Fortune Brainstorm Health conference in San Diego, according to the report. "All of these business principles — improving operations, looking at continuous process improvement — those have been mostly foreign to us until very recently."
Dr. Lee said her ah-ha moment occurred after implementing micro-level cost accounting in the hospital. About three years ago, she and her team began tracking all of the costs of treating patients, from every unit of supplies to each minute in the operating room or emergency room. They then displayed this information to the clinicians who competed to achieve the highest medical outcomes at the lowest costs.
This cost accounting model enabled the hospital system to zero in on the culprits of high spending that previously flew under the radar. For instance, Dr. Lee said her team detected "enormous variability" in the costs of hip replacement surgery among surgeons because each individual used different brands of prosthetic hips. Ultimately, they found patients who got the less expensive hip did just as well post-surgery as those who got the more expensive one.