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Think, Behave & Act Like an MBA

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Cheng-Huai Ruan, M.D.

I’m so happy to introduce Dr. Guy Kezirian to the Summit and Physician CEO is really cool and it’s something that I’ve been looking at for a while. And so we’re going to dive right in because this is something that’s been interesting me for a long time and I think this really answers a lot of questions that I’ve been just burning to ask. So thank you so much for coming on. I really appreciate you coming on today.


Guy Kezirian, MD, MBA

But it’s a pleasure to be with you Cheng, thanks for having me.


Cheng-Huai Ruan, M.D.

Oh, well, so I really want to know the story of Physician CEO and why don’t more doctors know about this? So what’s the story behind it?


Guy Kezirian, MD, MBA

Well, the Physician CEO program came about after I did my MBA and I was chugging along in my career. I had a, sort of an atypical career where I practiced as an ophthalmologist for 10 years and then through some health issues and other considerations, I went into a business side of life and I ran a bunch of FDA studies. In fact, the ones that led to the approval of LASIK, the first approvals of LASIK eye surgery, which most people have heard of and then I was doing consulting. I have a consulting company, a software company, and I did all that for a long time and I realized at one point I was kind of just feeling my way through, fumbling my way through business. So I really didn’t have any formal training. 

So I, I decided to do an MBA, but in my early fifties, and I did about 10 years ago, and I looked around at all the different programs and chose the Kellogg School of Management at Northwestern University because it was the one business school that seemed to be really aligned around team building and culture. We can talk about that a little bit later, but you know, there’s differences in MBA schools and in business schools, and I chose Kellogg, it was a great choice. Went through the program and I was just blown away.

I mean, every day I was just asking, how does this apply to my field, and I would come up with a list of ideas about how to apply what I was learning in B school to ophthalmology and to refractive surgery. So when we finished the program, I went to the Dean and I said, you know, if we had better access to physicians for business training, we wouldn’t have a healthcare crisis. We wouldn’t have, most of the things that are happening today would not happen if physicians simply understood business. And she said, well, you know, doctors won’t come. We try to get doctors to come. We have an MD MBA program at the medical school. When we only get a few people a year that participate. They just won’t come. They don’t see the importance of it. And I said, well, you know, we’re supposed to be in the marketing school and the team building school, why don’t we, why don’t we make a program that they can come to? And she said, well, let’s do it. So we put the program together, made it where it was accessible for doctors to attend. 

It’s done in a very time conscious way. We have four five day modules, You come in on Saturday and you go home on Wednesday and we spread them out about 10 weeks apart so that you come for five days, we fire hose you with ideas and concepts and frameworks. You go home and use it, come back in 10 weeks and we do it again four times over the year, bringing you through basically the high points of an MBA curriculum, but always from a leadership perspective and that’s how it came to be. And it’s gone on now for seven or eight years. And it’s just been very popular. It’s worked out well.


Cheng-Huai Ruan, M.D.

Well, you know, I guess the name Physician CEO kind of explained a lot about it, right? It’s from the leadership aspect and how that works. But earlier you said that, hey, if doctors like know more about stuff like this, that’s taught very high level in the MBA program, we wouldn’t have a healthcare crisis. Can you explore what that really means?


Guy Kezirian, MD, MBA

Sure you know, we have, you know, maybe people are aware of this, but there’s been an evolution in the business of medicine over the last 50 years that’s really transformed it from being a solo practitioner, very straightforward, kind of a business to being really corporatized, massive, massive medicine. And the system is designed the way it is now, where everyone in it becomes, does better financially, if the system becomes more expensive. And when you put a bunch of MBAs out there running a, running an industry and you wave profit motive in front of their face, they’re going to figure out a way to get that profit. And if that profit means let’s make it more expensive, they would achieve that. 

Now that’s a little cynical, but that really is kind of what’s happened. Now when you take doctors and you put them into a situation where they are confronted with expertise, jargon, concepts, frameworks, they tend to go quiet because all of our career, we’ve always been trained to know the answer. And in fact, that’s what I’ve always said that medical rounds were all about. You know, you ask the medical students who they don’t know the answer and then you shame them and you go on to the intern, you do the same thing and you move your way up the ladder. It’s really, it’s really not so much about teaching, although that’s certainly part of it, a lot of it’s just learning how to look like you know the answer even when you might not. And when you put doctors into a situation with business people or anyone else where the other person has more expertise, what do they do? They go quiet, which makes us easy to intimidate. It makes us easy to marginalize and that’s what’s happened in medicine. 

When you actually dive into what’s behind business education, sure, I mean, expertise comes in all fields and I have great respect for people who are great at business, but the concepts of business really aren’t that complicated, but they aren’t that apparent either. They’re not that obvious either. So the idea was, well, if doctors understood business, they never would have allowed themselves to be marginalized. They never would allowed the system to run away with costs. They never would have allowed the system to become bloated with administrative staff. You’ve seen the graph. The doctor reimbursements always along the bottom of the graph kind of stays flat, but the curve that shows the cost of medicine and the amount that’s in the administrative way, it looks like a big trumpet fanning out with massive increases. That massive increase is a bunch of middle people that don’t necessarily add value to the process. They might make it more expensive. They might make it bigger. They might make it more efficient in some ways, but for the most part, they’re just taking money and they’re filling jobs. So I think if doctors had had a chance to really understand their industry better, they would have controlled it better and we see that happening now in a lot of cases.


Cheng-Huai Ruan, M.D.

I mean, that’s the whole point of The Summit is to really reveal exactly what the gaps are in knowledge right. But I think it’s more than just gaps because you know, when I was trained in medical school and residency, and even in private practice is that this is an allocation of value that’s very distorted. So I think that in like, you know, grand rounds or rounds, for example, right, so you have the attending, you have fellow, you have the residency, you have the medical students. It’s a very hierarchal structure and what was valued is that the higher the hierarchy, the more the value that really is, but then until someone unveils something else and which I feel like a lot of the MBAs is actually on this program is saying the very similar things you are as they, hey, there’s a new lens to look through once you’re educated in it and that world looks completely different right. 

And so I value that and talking about earlier, hey, if you’re a physician and you’re in a room and there’s people with MBAs kind of running the show, you just quietly cower. I mean, that was me. It was all like, I don’t know what guys, what are you guys are talking about? I don’t know what it is, but it sounds really cool. You know, I think that the terminologies and we just kind of get lost in it, but it takes control away from the physicians. And we’re kind of reduced to these widgets as someone else calls it on the Summit. And all of a sudden, we’re just kind of like these widget makers and we’re just kind of bouncing around, but why do you think and why do you think that we the physicians, that if we know what’s really going on, how can we change the system to work better for us and for our patients versus what is right now? What do you think are those gaps?


Guy Kezirian, MD, MBA

Well, you know, I think it all comes down to leadership. And I think that, you know, it’s important to understand that this isn’t physician business school or physician MBA, it’s Physician CEO. There’s a big difference between management and leadership. So what we’re looking to do is to train doctors to be leaders, to be CEOs. So what is the difference between management and leadership? Managers are process oriented, goal oriented, internally facing, task oriented. Let’s get this job done. Let’s be efficient. Let’s save money, let’s make money, whatever it is they’re trying to do but it’s always about internal focus and efficiency, that’s management. 

Management’s important obviously, but that’s not what physicians do, right? Physicians are on the value creation side of things and they have to be on the leadership side of things. So what’s leadership? Leadership is deciding why are we here? What’s our mission? What’s our purpose? That’s been corrupted. That’s been taken away from the value of medicine, into, you know, profit and loss statements. And that’s become very, very different than what most physicians went into medicine to accomplish. What, you know, what do we do and what don’t we do? That’s another big question that CEOs have to ask. Is what don’t we do? What do we not want to do? What is our brand? How do we want to expose ourselves to the public? What is our culture? 

When, what are the, culture being the norms and expectations, what you can just expect someone to do, because they understand your culture, they understand your values. They understand what would be the normal thing to do with a situation, that takes real work. That takes leadership to understand and to convey a culture. So the idea behind the program is to create leaders because what is missing is leadership and the reason why leadership from physicians is missing is because they feel intimidated as you were saying. And that, I think if there’s one word that describes what doctors get out of coming to this program, and of course there’s a lot of words to describe it, but the one word that I was aiming for and that we’ve achieved over and over again, is this concept of empowerment. Where they feel like they have a right, an obligation a duty even to step up and to lead and to guide whether they’re, it’s their enterprise, their hospital, their system, their organization, their department, their entrepreneurial pursuit, whatever it is, but to do it thoughtfully and deliberately as a leader and as a physician leader.


Cheng-Huai Ruan, M.D.

So we’re beyond MBA here because, you know, like I said, MBA is more management, but as a leader, I think the definition of leadership that I was taught in school and the residency is different than probably your definition of a leader right. And so my definition of a leader is, you know, the department head attending at Presbyterian, which is where I went to residency. And so that’s my definition of a leader. You know, they lead the grand rounds. They have publications. So that’s almost like the original ingrained definition of leader. Well, you’re talking about is someone that’s quite different from that right. And so let’s define that for a second. ‘Cause you said that that the whole point of Physician CEO is to build leaders. So what are the attributes of a perfect Physician CEO leader?


Guy Kezirian, MD, MBA

Well, the thing that you’re describing is someone who might be in a leadership position, but we’ve all seen people in those positions who are not good leaders, right? The people who didn’t inspire people, didn’t cause you to see a vision. There’s really three things that effective leaders do, one is that they communicate and convey, in part, a strong and compelling vision, you know, what’s our purpose, why are we here? They, everyone should know and leaders find themselves repeating that over and over again. Why are we here? Why are we here? What’s our mission? And that mission of course, would be context sensitive, but many times it’s about patient care. It’s about, you know, being compassionate. It’s about whatever it is you’re trying to accomplish in your own particular sphere. 

The second thing that leaders do is they set expectations. So if you’re with an effective leader, you never have to wonder what’s expected of you, you know, because it’s been conveyed to you and you’re being asked to step up and oftentimes it’s a little bit of a stretch, you know, what you might’ve thought you were going to do. And so leaders also do that expectation setting. They foster growth, they foster maturation, they foster all kinds of development in their team and that leadership is always about setting expectations for their team. And then, very, very importantly, it’s something that most leaders either ignore or not aware of is that it’s very important for a leader to be aware of the obstacles that people face mentally, the psychological obstacles, and to help them to overcome them. 

So the way I described that as they help them to overcome fear because fear is paralyzing. Fear makes us stupid. Fear narrows our vision and narrows our focus. We might be staring at the tiger that’s about to jump on us and miss out the fact that we just had to step through the door to our left because it was right there because we were so focused on that tiger. It closes out and narrows our focus and doesn’t give us the options and opportunities. So fear is overcoming fear. Helping people to get beyond that is a major task of a leader. So, you know, one of the things that, you know, you mentioned is that we do go through the curriculum of an MBA and we do it pretty quickly. You know, we teach doctors at about twice the pace of the business school in our program. 

Why, doctors are amazing learners. I mean, they’re really highly tuned learners. They’ve been learning their whole lives. They constantly learn. So we’re able to, they’re able to concentrate and focus and absorb material, integrate material faster than pretty much anybody on the planet. So we teach the program at a pretty rapid pace. So we get to able to get through a significant amount of the MBA curriculum. But then we spent leadership in, every single lecture has a leadership overtone to it. Most business schools really covet and protect their CEO programs. CEO programs are not widely offered. 

They’re very, very frankly exclusive to be in a CEO program. And one of the big negotiations we had was this concept of, are we going to expose all of the CEO content to these physicians? And my argument was, physicians are CEOs, they must be CEOs and yes we will and we did and it’s worked out really well. That’s why our, and you may show this at some point today, but our logo for the program is the Griffin, which is that 4,000 year old symbol with the body of a lion and the head of an eagle and that concept is that you’re king of the air and king of the ground and king of the earth. And the point is that as a physician CEO, you’re really two people in one. And the reason why we have to train doctors specifically about being a physician CEO is because everything we learned as doctors is the opposite of what we’re going to do as a CEO. So, and I’ll elaborate on that but go ahead, you want to say something.


Cheng-Huai Ruan, M.D.

I’m smiling because that’s literally what I say to people. People like when I have on my CEO hat at Texas Center for Lifestyle Medicine, it’s literally that I have to change my mindset and I actually like shifted into doing the things that are opposite that I was taught. And not because, you know, I’m a bad guy, but there’s different attributes for being a physician leader that’s very different than being a care provider to a patient and so, and so.


Guy Kezirian, MD, MBA

Let’s list a few of those. You know, first do no harm, primum non nocere. Okay first do no harm. In medicine and that’s the, that’s sort of the cardinal rule. In business it’s fail fast. I mean, how different could you be, fail fast? In other words, if you’re making a mistake, stop making it, do something else. So the fail fast concept. Standard of care, you know, stay within the lines, paint between the lines. Don’t do anything to deviate from that. Make sure that you can cite references for everything you’re doing and you’re following a protocol. In business it’s differentiate, innovate, be different. You know, it’s completely the opposite mindset. So there’s so many examples where we’ve been trained and, you know, we were all trained at a pretty young age. 

We’re trained to be a doctor in our twenties. So this became imprinted in us in a very, very fundamental way and it takes time to get people to get out of that. So the, you know, we do this four module thing because it takes time for these concepts to be absorbed. We have them do some reading. It’s not a lot, but there’s a little reading between, and we bring forward concepts, which are transformative. It causes people to see themselves and see their role differently. And by the time they’re done, they have actually duality, they have two people in one, they have that Griffin in themselves. They have that physician rounded standard of care, do no harm, person untouched but then we also have this eagle, soaring, innovating, differentiating, failing fast, competing, and doing things in a new way at the same time. It’s a very interesting thing to watch.


Cheng-Huai Ruan, M.D.

Yeah and so I think, you know, whenever we talk about failing fast and I always talk about fail fast and fail forward, right. And one of the lessons that I teach my mentor group is that be in a hurry to fail and be in a hurry to learn from it and also be in a hurry to learn from other people’s failures too, which is the whole point of this online summit here. And so, and that’s the mentality that’s there, that’s not really taught and also it’s really kind of frowned upon like you said, right, in the practice of medicine, it’s like, you know, you want to have, so you want to stick within the standard of care. 

You want to, you know, keep your head low. You don’t want to cause too much trouble here, but from a business side, if you do that, you get stuck and when you get stuck, you get helpless. When you get helpless, you become powerless and that causes a massive amounts of burnout. And you’re right, you know, physicians are the CEOs and physicians should be and so why not expose physicians to this concept? And I, I’ve wasted a lot of money over the last few years, learning from the mistakes, but I’m very grateful for it. And so I think that from a young physician point of view, I’m a young physician. So what do you think are your, is your advice to young physicians considering a career in medicine, not to go into that rut and develop leadership skills?


Guy Kezirian, MD, MBA

Well, that’s a great question because, you know, I think that this is an incredibly exciting time in medicine. People will often look at change as being, you know, something that they want to avoid and they want things to stay the way they were and they’re always talking about the golden age of medicine was always the one generation before them, right? It’s always talking about that golden age of medicine is right now and in fact, it’s in the future because when change is happening, that’s the really opportunity to create value and we’ve never been in a time of such rapid change as we are right now. I mean, in my field, in ophthalmology, the digital transformation of ophthalmology is breathtaking. 

I mean, what’s happening in ophthalmology today is just unbelievable to the point where we’re going to be able to reach the entire global population with remote diagnostic imaging, workstations, and whatnot, that we can just put all over the world and not have to be worried about the fact that doctors like to live in cities and most of the people don’t. So we can reach everyone remotely through telemedicine and these other innovations. It’s very exciting. What, you know, what does that take? That takes someone who has an open mind and wants to innovate and wants to understand how things work, but you have to understand value creation. So in medicine, you know, every, not every, but most of the dollars in medicine are generated either at the tip of the pen or the tip of the knife of a doctor, and yet almost all that value, over 95% of it, is captured by other people. They want then the doctors to think, you know, money’s bad, profit’s bad. You shouldn’t worry about that doctor. You should just be a doctor. 

We’ll take care of the money. Hah, and they’ve done that all day long and they’ve led to a bloated system with all kinds of middle people involved, ridiculous pricing on things. I mean, when you see, I don’t know how many people in this audience actually look at some of the EOBs that patients will receive, ask your patients to bring in some EOBs and look at them. And the EOBs talk about things like $3,000 cat scans. I mean, that’s absurd when you can go in and pay cash price for 150 or $200. And yet they’ll charge the insurance company 20 times that, and then they’ll say things like your doctor tried to charge you this but we only paid him that, aren’t we great? We’re on your side. Well, you know what? This concept of profit being bad is only bad for doctors it turns out. 

The stark laws and everything else, these are all against doctors. It’s not about protecting patients in my mind. It’s about, it’s about going, grabbing the money. It’s about as money grab. And so what doctors have to do and it’s one of the transformations that we talked about a lot in the program is to understand the difference between profit and greed, because profit is essential. You have to have profit. You have to be able to be sustainable, to have the ability to create value, to be able to capture that value so that you can do more of your mission. For other people, profit may be the goal, but for doctors, profit is the resource that allows us to do more of the mission. So I think it’s important for doctors to get comfortable with the concept that it’s okay to make a profit. It’s okay to look at the money. And in fact, it’s not okay not to because when you don’t, then the system becomes corrupted by people who would be in it only for the money and they would cause things to happen that are consistent with your mission.


Cheng-Huai Ruan, M.D.

Right, well, the difference between profit and greed, I think that’s a very valuable tick there. I’m going to use that as a sound bite for sure. And so, you know, for, so from a young person, like looking, looking in, outside looking in, here’s the thing. So, you know, my sister’s in medical school and I get a lot of the mentality of the medical students. So they’re looking at the medical system. They’re like, wow, this medical student, this medical system is completely f’d right. And so, and it’s reverberating the language with the learning from the attendings and the school and stuff like that but what you just said is like, hey, this is we’re about to enter the golden age in medicine, which is a very different dynamic than what I’m hearing from a lot of the academic institutions and my colleagues as well. 

And so, and I guess that lens in which you look through, came from the MBA training and the business side, right, because it allows you to be in opportunist in a lot of these different things like ophthalmology, like you said. And so, and that’s the thing I want to get to young doctors like myself go into a career in medicine, it’s that there’s opportunities. You know, I tell my sister, there’s always opportunities, but you can’t get stuck within a mentality of doing the standard of care. This is like what I tell my sister. And, and I think that we’re entering time where coronavirus has really accelerated the adaptation of technology within the elderly population, the rural population. And so it is a time to take advantage of the fact that we can practice medicine and do what’s right for the patients and possibly even scale it. And I think that that mentality is something that I think people feel really guilty about just because the way that we’re trained right. And so do you think that the, is there like optimal time for doctors to say, hey, I’m going to get more knowledge about business? Is it like during medical school, during residency, four years out to training 10 years down the training? Is there optimal time to do this?


Guy Kezirian, MD, MBA

Yeah, you know, it’s a great question. I think that that business training is really life training. Everything you learn in business school has practical applications everywhere, you know. You learn accounting, you can balance your checkbook. You understand what you’re doing with your expenses. You can budget. You learn marketing, you understand how to convey value and how to explain things to people. You learn operations you’re just more efficient. You learn strategy you become aware of the fact that competition isn’t necessarily beating the other guy. Maybe it’s about making the other guy do better because you do better. You know, there’s all kinds of things about business frameworks that are valuable throughout life. So I think there’s a role for business training. 

I think we should start teaching business in high school, but you know, when we come to, when we come to being doctors, I’m working right now to create a program for medical students, very different than Physicians CEO, because they’re not CEOs. They would be more about management, but they should understand contracts. They should understand the law. They should understand operations, strategy, negotiations in particular. That’s a very important part of their life right now. They should understand those things. The Physician CEO program, we deliberately withhold from younger doctors. So you have to be at least beyond your residency program, a board eligible or board certified. 

So you have to be a fellow or you know, out, in practice to be in a Physician CEO program, because being a CEO implies that you’ve got people to lead and that’s, you know, that’s the goal of the program. But I think the business training, you know, it’s transformative and it changes the way you look at everything and having gone through it, I mean, I look at my life and I think how differently I approach pretty much everything that I do since business school from what I did before I’d gone to business school and just much more efficient, much more effective. I can see through things. I can identify opportunities like, you know, keep creating businesses, which is interesting, but it’s been, you know, it’s been a very, very big difference. I wish I had done it when I first finished my training. I did it much later. I had a good career. 

I’ve had a good career. I still do, but, but it would have been a very different career and I think one where I would have created a lot more value if I had done it earlier. To answer your question about the program, now we have people who are in fellowship doing the program, but we also have people who are at the very end of their career, looking at succession planning. We have people who are about to be acquired by private equity. We have people who then turned around and created their own private equity companies. We have department heads. We have people who have startups. We have people who are just in a practice and want to make it scale. So there’s all kinds of different people in the room. 

And we have multiple specialties, which is very cool because, you know, in medicine, it’s amazing how siloed we are. So for me, I had not hung around with anesthesia and plastics and derm and pain and orthopedics, and, you know, GI, cardiology. I hadn’t been, I’ve been in ophthalmology world. And, you know, we live in like a worlds only this big. So it was a pretty small world. Seeing it, getting exposed to those ideas is also very valuable. So, but to answer your question, there’s appropriate business training at every level of a doctor’s career. My mark of success for the Physician CEO program is when you spend as much continuing education time, doing business, as you do doing medicine, then I believe that we’ve successfully transformed you to be a physician CEO.


Cheng-Huai Ruan, M.D.

You’re using some powerful words here, like transformation, empowerment, right. And so, you know, ’cause I don’t really hear that about business schools in particular, but I assume you’re using those transformative terms because it perhaps transformed you.


Guy Kezirian, MD, MBA

Oh, no question about it. And you know, there’s one thing that isn’t apparent to people, which is why I’m so happy I’m working with Kellogg at Northwestern, is that business schools are different. They’re still bound by somewhat of a loose network of the same curriculum. You’re going to learn accounting, finance, negotiations, marketing, operations, you’re going to learn those everywhere, but the approach they take is always very different. So some business schools will be about, you know, being so competitive and just beating the other guy, right. Some of them are going to be about finance. Let’s just, let’s run Wall Street. Let’s do Goldman Sachs. Let’s work on financial, you know, in engineering. 

Some of them are going to be about tech. You know, I’m going to go to MIT or Stanford or something. I’m going to work in a tech environment. So it’s about technology. The business schools all have their own flavors. And Kellogg is about, as I mentioned before, marketing and team building, and that’s so consistent, so appropriate, so well aligned with what we do in medicine, that it works out really well. So I think that, I think that the transformation that I underwent was this idea that there really are secrets. There really are things that are available in business school that you just aren’t exposed to otherwise. And it’s not like they’re coveted secrets, but you just don’t have time to look at them. We just, you know, we’re so busy doing other thing, but to be walked through them all, and then when you get to the CEO level is very deliberate. 

You know, very definite approaches, that you just aren’t going to be apparent to you. You can muscle your way through it. We’re smart people. We all went to medical school. We’re all got this work ethic that just won’t quit. You know, we’ll kill ourselves before we’ll give up. But, but you know, that’s not effective. There are definitely technical technique ways to do things right and that’s what business school is all about. And when you start to understand those, when you start to understand about value creation, about value capture, about the appropriate way to look at a problem and being able to identify and articulate what problem are we trying to solve here and not focus on the mechanics of it but focused on the end point. 

To look at where are we going to go and how are we going to make this happen. Ignore what went before. Say are there more innovative and more efficient ways because there’s so much more innovative around us today, tools that didn’t exist 10 years ago, we’re going to approach almost every problem we face today differently than we would 10 years ago because of the tools we have. When you look at it that way, that’s transformative, that changes the way you look at the world, changes the way you look at yourself and the idea of becoming, you know, empowered to become a leader and to take ownership of your profession. That’s certainly transformative.


Cheng-Huai Ruan, M.D.

So, so let me ask you this then. Do you think a physician should be owning their practice or should they be in the, in a part of a larger group or is that less of a business decision or more of a personal decision? What do you think about that?


Guy Kezirian, MD, MBA

Well, that’s a great question. It’s part of a bigger question, which is, you know, where is medicine going to go? I believe that, I believe that private practice is critical. I think private practice is, you know, counterintuitively where much of the innovation occurs. I think that the hamstrings that bind and tie university departments with layers of bureaucracy, sometimes stifle innovation. They see a lot of innovation coming out of the private sector. I think that the patient care, the quality of care is higher in general in private practice, you know, especially in clinical medicine. Maybe not in hospital medicine, of course that’s in a different setting, but there’s a lot to value in private practice which is why I’m fighting so hard to preserve it. But when you, when you get to your question about, you know, should you own your practice? I think that there for a certain personality type, the answer is absolutely, yes, because it’s only when you own your practice, that you can really decide those questions I asked before about leadership about, you know, what is our culture? What is our purpose? What do we do? What don’t we do? 

Those things are only being able to decided by generally one person and that’s the person who owns a practice. Now, there are ways to own practices that aren’t apparent to people which are different, right. So there are group practices and people buy in, they own a little equity and they have committee meetings and maybe they share some profits. That’s one form of it, but there’s a whole nother thing that’s happened in the last couple of years. Again, it’s like third time in my career that this has happened. It seems to be maybe better this time, but I’m not convinced yet, and that’s the invasion of private equity. And so private equity now is just gobbling up practices all over the country. It came on the heels of the ACO with Obamacare that formed, you know, ACO, Accountable Care Organizations around hospitals and encourage hospitals to buy a private practices and absorb them into a larger system. 

And, you know, the people that organized Obamacare have now admitted that that was a, not a good idea. It has not made medicine better, but in the meantime, a lot of practices disappeared. The way that it’s happening with private equity is another way for private practices to disappear. They’re coming in and buying it and you sell your practice and now you work as an employee. That’s ruined a lot of really wonderful practices. It’s made some practices better, but it’s taken a lot of wonderful practices and taken all the life out of them. And people are people, you know, you talk about burnout. That’s where a lot of it comes from. It comes from not being able to self-determine. It comes from not being able to really care for your patients. 

You’ve got a patient would need you to be there for extra time and you want to spend 15 minutes or 30 minutes with them and they’re telling you, you have to rotate on a six minute schedule and if you don’t, you get docked. I mean, that’s not good. That’s not what doctors want to be. So I think that private practice ownership is important, but there are ways to do it. There’s a whole nother wave of ownership models that are coming along which we go into a lot in the program, which is basically these 10 different names, but, you know, private physician associations, private practice associations, basically co-ops where physicians will come together. They’ll keep their private practices, but they’ll form a common management company that works for them instead of them working for the company and they’ll own the practices. 

They’ll do purchasing, marketing, contracting, and other things through this larger organization and they’re able to maintain their independence but still gets scaled that they couldn’t get otherwise. That’s one model. There’s other models where people were actually forming private equity groups. I’ve done this. We were forming our own private equity group. We call it something else. We call it physician equity, the other PE. So we have physician equity where we we’re coming in, and it’s value-based leadership. It’s not leadership based on purely looking for investors to be happy and come back with a return for bringing joy to physicians where they can practice and own their destiny. So there’s different models out there. But that ownership question is a big one, but there’s different models to be able to own a practice successfully and still maintain your purpose. But I think that whether it’s you that own your practice or your colleagues that own your practice, or you join it, you own it jointly with them, I think physician ownership of medicine is critical.


Cheng-Huai Ruan, M.D.

And that comes and that critical ownership portion has to come with a leadership style and leadership tenacity to really drive change in healthcare. But yeah, I’m actually not aware of a lot of these structures that you talk about and which kind of peaks my interest a bit is that I think you’re right. I’ve seen a lot of practices get bought up by private equity and then you just see their online reviews just drop by a star within a month. And I’ve witnessed it during the pandemic. There was a big mop-up of private practices that got bought out by larger some of the largest systems here in the private equity, as well as in hospital systems. And then, but a lot of them are buying them up just to close them down too right. 

And so, and it’s really hard to watch. And whenever I, whenever I see something like that, I never really know what’s really behind that force, but you kind of, you know, described it just now. And so I think, I think that the, if I’m getting this right, you’re saying that the future of private practice should be practice ownership by the physician of some kind or some entity, right, that co-op style you talked about or solo ownership. So what do you think is going to be the unicorn, if you will, of private practices, what does that look like when it comes to private practice, independent practice? So what are the attributes of that unicorn practice that’s able to scale, that’s able to do well for the patients, that’s able keep the physicians happy? What does that look like?


Guy Kezirian, MD, MBA

Well, that’s a great question. I could go on for a long time about that. And we have, we actually have entire programs parallel to Physician CEO just on things like private equity and whatnot up at Kellogg that we put together. And it’s important to just mention, I forgot to mention it before Cheng, is that the programs are exclusive to physicians. So in our, in the classroom, there will only be physicians. And we define that pretty narrowly. We don’t, they have separate programs for dentists. There’s no chiropractors, optometrists, podiatrists. It’s for MDs and DOs in the room. And the reason for that is that same thing about physicians going quiet when they don’t know something. We’re used to teaching each other. We used to admitting when we don’t know something in front of each other, but as soon as you put some other person in the room, some administrator or whatnot, people go quiet. 

So it’s just one little feature of the program to mention is that it’s really important that we’re doing this together and not with outsiders in the room, except for the professors of course. I think that unicorn already exists. And you know, there’s a couple of us, there’s a couple of them out there. I’ve created one. We’re scaling pretty rapidly. It addressed a few, a few issues. One is that it has to be appealing to physicians at all levels of their career. So that model needs to be attractive to the new physician who would want to come and work in that environment. It has to be attractive for the person is in that environment to want to bring the new physician in and to thrive and to help them thrive. It’s gotta be attractive for the person who wants to exit and is looking to retire and get out. You know one of the reasons why private equity has been so successful in taking over practices, aside from the COVID and the financial distress that people went through with that, but in general has been that, you know, and I’ve written about this, but the group practice structure came about in the seventies when Medicare was approved and medicine started to corporatize. 

So the first thing we had was something called HMO’s. They still exist, but the HMO’s were the first run at corporate medicine in America and there was a big antagonism between people in private practice and people in HMO’s and the people in private practice said, you know, we need to figure out how to fight against this corporate medicine. So they created a group. Before that most people just practiced on their own. And so the group came together and then they formed a bigger group, and they grew, and they scaled, and they were able to defend their market in their practice against the big corporate medicine. 

But they didn’t think about an exit strategy. So when the senior people now are retiring and they want to retire, and they say, well, I built this, you know, $50 million a year revenue practice. It’s worth a lot of money. I want to be bought out. The junior partners are saying, well, yeah, but you already did all your work and we’ve been working beside you. We helped build that with you. We can’t afford to give you a big check. And so they turned to private equity and private equity says, oh, we’ll give you a big check and those other people will work for us and that’s what’s been happening. Now, the doctors didn’t realize that that was necessary. The doctors could have done other things like a dividend recap or different financial structures to allow themselves to exit and let the junior partners basically take out a mortgage on the practice that they would have paid to the doc, and they could have just paid it over time and kept the practice but they didn’t know that. This concept of asymmetric information, private equity uses all the time. 

This financial engineering stuff was used all the time against doctors and it’s really kind of frustrating, but so you’ve got, we had to make it where it was appealing to people who were just coming in, who were there and you wanted to exit. So we’ve done that with this production that is called position equity. The second thing that had to happen is that it needed to have ways where you have the ability to scale. You know, we mentioned earlier, private practices is important and I agree with you, but I don’t think the solo private practitioner is going to stand much of a chance going forward. 

Maybe in certain fields like psychiatry, what’s very one-on-one and they spend a long time, maybe so, but in scalable fields, whether it’s cardiology or orthopedics or ophthalmology, or any field, pain, anesthesia, go on and on, all these fields that can scale will scale and unless you scale, you’re going to be stuffed out. So I think it’s necessary to have a structure that can scale and can scale infinitely. Scale for most physicians means working harder. That’s not scale. Scale is bringing more resources so that you can grow without limit, that’s scale. So structuring something that can grow without limit means you have to have a good business structures in place, good management in place. And then the other thing that is absolutely essential to this is to make it where physician values can prevail. 

Where it’s about values based leadership. It’s not just about financial leadership, but it’s values based leadership and that structure also has to be part of the system. So all of these things, I think it does exist. There’s a few different examples around the country \where I think you’ve got some durable enduring models that have come out in different fields. And I think that we’re going to see this coalescence of this new model of physician equity come through in the next 10 years, where physicians are going to be able to scale. And there will still be the Kaiser Permanentes, and they’re not bad people. 

They just are different, right. They’ll still be out there. Now the other different organizations will be out there. They do good medicine but this is not an environment where the physicians necessarily feel fulfilled. In fact, that’s why you’re having courses on burnout but to be able to have this scalable values-based organization, I think you’re gonna see those coalesced and I think you’re going to see both of them grow. And as a result, we’re going to be able to reach more people because you can look around the system in any specialty and recognize that we’re not reaching all the people and the mission for this next generation has to be, how do we actually fulfill the mission? And it’s going to go from, you know, what’s in it for me, to what would it take? And when we start to ask that question, it gets super exciting. What will it take?


Cheng-Huai Ruan, M.D.

Wow, I mean, that’s so powerful. And then it seems almost impossible to have that unicorn practice. But if you say exists, I believe you, you know, you know, my mother, for example, she’s an acupuncturist. She’s very successful in her private practice. She’s solo by herself. She doesn’t even have a receptionist to be honest with you, but she that’s what she’s doing. And, you know, my mother’s not getting any younger, going towards retirement. And then the problem is you put all this energy and working six days a week and 12 hour days into this practice, and you’re the solo engine of the practice, where does it go from here? And so she had, right now she’s kind of going through this sort of sense of loss, like what’s going to happen, you know, when I stop practicing, right. 

Does it, hasn’t been really systems that were developed to scale this in any fashion. And then, and it’s just been kind of that sole engine. So I feel like a lot of other practices that are like this too. So recently talk with an endocrinologist and he’s 72, and he finally, hey, I’m going to retire. And he sort of holds his guilt that, you know, and my practice not necessarily worth anything at this point, I don’t really want to stop right there, saying, hey, you want to go another two years so that my office manager can retire with me right. And so I see a lot of that stuff going around and it scares me and it scares me is because that I don’t, whenever people are at that stage of their career and they look back and there’s this sense of loss that they built all this stuff and it’s almost not like it’s going to waste. And so, and that’s the last thing that I want for me and my colleagues and my mom and this endocrinologist right. So what it sounds like you’re saying is that there’s a way that we can do this, correct.


Guy Kezirian, MD, MBA

Absolutely 100%. And you know, what you’re describing is the fact that when you create a practice you create an asset. That asset appreciates over time. And yet when you retire, you almost never can recover that asset appreciation that you created. And in the old, in the old, in the old models, but in the physician equity model you can, in the model where you’ve actually created a business which can survive without you, you can retire, continue to either get a payout or get dividends over time, because you have an equity structure around that practice. Then you can do what we’re talking about. 

You can get that capture that asset appreciation and you know, I would say that if your mom’s happy, she’s successful, but you know, there’s different definitions of success. And as we get older, there are different definitions of success. So, you know, you can, you know, a young surgeon will often define success based on I’m doing more cases and, you know, I’m doing more cases than my colleagues. Maybe I don’t know, depending on what their personality is. They get a little older, it might be well, I’m making more money or I’ve got a bigger practice. Maybe as they get a little older and it might be that they’re actually teaching, or putting other people in place to you know, have that succession plan. We have different stages in life where we’re going to define success differently and it’s important to anticipate those and they have the framework around you that let you grow into them. 

So I think that we have to first ask ourselves, what’s our current definition of success? What do we think it’s going to be in 10 years and make sure that we put a structure in place that’s going to accommodate that, but yes, it’s possible. It’s not only possible it’s happening. In fact, it’s necessary too, because if we don’t do it, then we’re going to continue on this downward spiral of commoditizing medicine. Commodity is something where the only difference is price. Like copper or, you know, anything else. It’s just a commodity. The only differentiating factor is price. When, when we, if we commoditize medicine, where we say the only thing that’s cheaper, it’s a race to the bottom and that’s what’s happening in medicine on the doctors side, they’re commoditizing doctors and they’re saying we can just plug any doctor into that situation and of course, that’s ridiculous. 

So we need to capture control. We need to capture leadership. We need to be able to stand toe to toe with any business person, know the jargon as well as they do, but have an extra dimension of understanding the medical aspect of it. So now we can trump them every time. And when that happens, we’ve got some amazing success stories from the program. We have one guy right now who’s actually on the board of directors of one of the largest company we have in ophthalmology. That company has never had a doctor on their board of directors. A big publicly traded company, $12 billion market cap, and they, or actually 40 million billion dollar market cap, $12 billion invest, and they are, have a doctor from the Physician CEO program on that board. We’ve had people who formed their own private equity companies. We had one just have $150 million exit last year. 

People who said, you know, I’m going to leave this big clinic I’m in and I’m going to go be a chairman of a department and redefined that department to become about global medicine and reaching out to the developing world and bringing ophthalmology around the world. We’ve had people who have gone on to start enterprises and new ventures. There’s been all kinds of wonderful transformations that have happened and this is because they saw that they could, and they saw that they could. And, you know, I would argue that I could take any 10 physicians watching this program and put them next to any 10 businessmen or business ladies that they’re working with and the weight of the scale is going to come way down on the physician side in terms of talent, energy, work ethic, insight, vision. The only thing that the business people have on us is training, we’ve got to get that training.


Cheng-Huai Ruan, M.D.

Wow, that’s such a powerful statement, but it’s absolutely true because right now we’re flying blind. You know, most physicians watching this well, we’re really flying blind and the worst part about it is I don’t think we know we’re flying blind right. And then, so you just let the turbulence take you and you don’t know why there’s turbulence, ’cause you can’t see outside the plane and that’s super scary and so right now, you’re right. I think it’s a very opportune time to redefine what we are as physicians. 

You know, if you look at, if you look at the pandemic, you let’s look at how the US and how the public kind of handled the pandemic when it comes to interactions with doctors and medical students and residents, right. And so you use this military term called frontline or frontline doctors right which I’m not necessarily comfortable with ’cause, and you use this military term, I’ve used the, the frontline doctors and you know, New York Presbyterian taking care of the patients with coronavirus, hey, we’re short on staff. Let’s bring in some of the medical students who are not trained in infectious disease at all. That’s a knock to COVID. And then, and then bring them in. And then you have this, this sort of this perception is that these doctors are like troops within the military and there’s different waves of attack right. And so, and I think that’s what the, what the perception is, but then who’s the general, right? 

Who’s really leading the troops, right? Is it governments? Is it large institutions which generally, yes, is a hospital systems right. And we’re starting to see this play out where there’s a lot of resentment within the physician community of what was portrayed in the last couple of years since the pandemic started right. And that resentment starts from how the physician community and the medical student community are really perceived. And that resentment also comes from the fact that our lives are being harder and we’re being censored and all this different things so there’s a lot of woe is me mentality that’s that’s going on right. And then here you are saying that it’s the best time ever in medicine. 

We’ve got to take advantage of it right. So it’s definitely a different philosophy. you look at through such a different lens and it’s very refreshing. And it’s really encouraging for me to know that there is a way and the other people have done it. And once you’re empowered and once you see the vision behind it, now you know where to go, you see outside of the airplane, you know. You can fly around the dark clouds and not have turbulence right. But you gotta be the pilot of that and you gotta be the CEO of that. And I think that’s a very powerful thing that I got from our talk, you know. So let’s talk about more, more direct things. So how can people find out more about the Physician CEO program?


Guy Kezirian, MD, MBA

So there’s a website it’s wwwphysician-CEO, physician-CEO.com. It has all kinds of information there. I’m always open for a phone call, if someone wants to talk about it and ask questions. I’m happy to talk to them. All the contact information is on that website and we will be. The program runs on an annual basis. So we run once a year and it will begin again in February of 2022. So we’ve had a COVID pause, it’s a live program. It’s not a virtual program. And the reason for that is that being there, being with each other, that networking aspects of it’s a very powerful aspect of it and so is the idea that you’re not home because when you’re home, you’re taking calls, you’re seeing a patient, you’re doing this, your running off and doing that. When you’re there, you’re isolated and you can focus. 

So that focus and that networking are really, really important parts of the program. So it’s all live. It’s all on campus. The beautiful facility, it’s basically first couple of floors are things like dining halls and reading rooms and then lecture halls. And then the top couple of floors are our hotel. So you’re staying right there in the facility and it’s right on campus at Northwestern. So, but physician-CEO people can apply. And, and I, of course, I’m available to answer any questions. You know, you brought up a point a second ago, Cheng. I just want to emphasize people don’t know what they don’t know. People don’t know what they don’t know. And you know, I kind of bluffed my way through business. 

So I had a business for 25 years and I figured it out. I muscled my way through it, but you know, when I finally went to business school I realized, oh my goodness, I missed so many opportunities because I didn’t know what I didn’t know. And so what we want to do is we want to strip that away, give people that knowledge, give them that empowerment, give them that ability to take control. It’s like Roger Bannister with the four minute mile, you know, before he ran that four minute mile in 1954, people thought it couldn’t be done, there were books written about why it couldn’t be done, but then he ran the four minute mile and a couple of years later, they were doing it in high school. People just need to know it’s possible. When you go to a place like Kellogg, you see the people in that room, you see what people were doing and you realize it’s possible and then you do it.


Cheng-Huai Ruan, M.D.

Yeah, that’s such a great analogy there. It’s the home run thing too, I think in baseball as well right. And so, you know, the, you guys want to know more, the link is actually in the description of this video. So go ahead and click on it. And so I’m going to close it up a little bit. And I asked a lot of the Summit members this, I want to ask you as well. So when did you get your MBA? About what, 10 years ago you said?


Guy Kezirian, MD, MBA

Yeah, 20, 2013 was when I finished, 2011 is when I started.


Cheng-Huai Ruan, M.D.

What do you know now that you wish you knew right after you finished your MBA?


Guy Kezirian, MD, MBA

Well, I wish I knew when I was younger that I needed to learn more. I wish I didn’t have the arrogance of a physician thinking that because I’d go into medical school, I knew everything. And in a way, business school is kind of like medical school, where you finish and then you start learning, but at least you know how to think. And that was the same way as well. But I wish I had known when I finished business school, that there was really, the possibility to scale was there that you can, that you can scale. You just have to think big. And if there’s anything that we try to encourage people to do whenever they come to us, everyone leaves the program with a business plan. 

That’s your deliverable. Your deliverable is your own personal business plan, not a theoretical one, and we worked with our mentors and people that work with every person in the program one-on-one, but everyone leaves with their business plan. The one question we always ask is how can you make it bigger and how can you do it faster? And when you get people into that mindset, it’s pretty powerful. It took me a while to figure that out, but that’s where I am. And now that we’re scaling on some pretty big projects, so it’s working.


Cheng-Huai Ruan, M.D.

It’s better than being on Shark Tank. That’s great, you coming out with a business plan, that’s really worth more than the price of admission, because you guys ever been in independent practice, and there’s a lot of business plans that actually don’t make sense and then you look at your own and well, this really didn’t make sense and didn’t really project what we want. And there’s, you know, you mentioned something is that you wish you knew that you could scale, right? And so, there’s a shortcut to understanding that knowledge, then I think Physician CEO would be it. So thanks for coming on. This is what a wonderful talk. And it’s really refreshing, and it’s really injected a lot of hope into me. So I truly appreciate your time today.


Guy Kezirian, MD, MBA

Well, we live in a wonderful time. Hope is justified and I know you’re going to make great things happen, Cheng. Thanks for doing this. Thanks for putting this series together and thanks for having me.


Cheng-Huai Ruan, M.D.

Yeah thank you. Once again, go ahead and click on the link in the description and check out Physician CEO, thank you.


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