Business minor teaches important skills for life sciences, pre-med undergraduates
If you’re planning on a career in medicine, there is one subject you need to study on top of anatomy, biochemistry, and physics—business. Robert Karpman, MD, MBA, and director of the Dyson Business Minor for Life Sciences Majors, gave this advice to a group of 100 students gathered in Klarman Auditorium in March. The talk was sponsored by Cornell’s chapter of the international medical fraternity Phi Delta Epsilon, the Biology Scholars Program, and the Dyson Business Minor program.
“Don’t just concentrate on the sciences,” Karpman told the students. “You need microeconomics or health economics as much as you need organic and biochemistry to succeed as a physician, particularly in this country.”
Erin Kim ’20, vice president of finance and philanthropy for Phi Delta Epsilon, said Karpman is one of several speakers the fraternity has invited to offer different perspectives on the healthcare field. “Being a doctor now means more than just taking biology and health science,” Kim said. “It means understanding the overall healthcare industry as a business.”
Karpman, a former orthopedic surgeon and a healthcare entrepreneur, said medicine has become a business in the United States, with costs escalating out of control. In 2015, $3.8 trillion was spent on U.S. healthcare services, which amounts to $10,000 per person, he said. That compares to $3,700 spent per capita on healthcare in countries such as Germany and France.
“We spend nearly three times as much in the U.S. and yet we still we don’t have the best healthcare in the world,” Karpman said. “Our life expectancy is below that of other countries. We have some of the highest infant mortality rates in the world.”
Most of the money on healthcare services is spent on hospital care, which accounts for 32 percent of the nation’s healthcare expenditures. That is followed by physician and clinical services (20 percent) and prescription drugs (10 percent). Even though physicians account for 20 percent of all healthcare costs, they play an influential role in the escalating price of medical care, Karpman said. Physicians, in fact, are responsible for more than 60 percent of healthcare costs.
“We are the ones who write prescriptions, we are the ones who admit patients to the hospital, we are the ones who order the expensive tests, and we are the ones who use the most expensive technology to treat our patients, even though sometimes it hasn’t been proven to be effective,” Karpman said. “So even though we’re not receiving those dollars, we are responsible for all of that cost.”
Karpman said the public doesn’t care about the cost of healthcare because they’re not paying the bill. Insurance companies are covering the costs, and Karpman said the emergence of insurers in the healthcare industry is what turned medicine into a business. One factor that is driving up the costs of healthcare is the reimbursement mechanism used in United States, which is known as fee-for-service, Karpman said. Physicians and hospitals are paid by the insurance companies based on the number of services they provide to patients.
“The more services you provide, the higher your income,” Karpman said. “The fee-for-service mechanism encourages healthcare spending.”
Surveys show that medical students choose the specialty they pursue based on their future earnings, Karpman said. The influence of projected earnings in selecting a specialty is considered extremely or very important to 41 percent of male medical students and to 28 percent of women students.
“Money plays a role in your decision making and your decisions when you’re in medical school,” Karpman said. “If you don’t know anything about business, if you don’t know anything about cost-benefit analysis, you are going to be behind the game. We as healthcare providers can no longer be focused exclusively on science.”
Anum Hussain ’19, president of Phi Delta Epsilon, said Karpman “really opened people’s eyes as to what medicine means, because it’s not just learning the hard sciences. We sometimes have tunnel vision in terms of focusing on the difficult chemistry and biology classes.”
Despite the importance of business in medicine, the subject is not taught in medical school. Karpman said that is why pre-med students need to take business courses as undergraduates, and he recommended they consider enrolling in the Dyson Business Minor for Life Sciences Majors at Cornell.
“I guarantee you when your career progresses, by taking these kinds of courses, you will be farther ahead of all of your colleagues,” he said.