26-1-7--vpm sim article

Teaching Healthcare Management via Interactive Simulation 63

Leigh Cellucci, PhD, Chuck Moses, MBA, MSHA, FACMPE, & Bill Probeck

Teaching Healthcare Management via Interactive Simulation: The MGMA VPM

Please address correspondence to Leigh W. Cellucci, Department of Health Care Adminis-tration, 921 South 8th Ave., Stop 8002, Idaho State University, Pocatello, ID 83209. E-mail: [email protected].

AbstractUndergraduate students in Healthcare Administration programs may ben-efit from learning strategies such as participation in interactive simulation. Collaborating with other students in the capstone healthcare management class allows for the students to experience a team approach in planning, organizing, leading and controlling in the Medical Group Management Association’s Virtual Practice Manager (MGMA VPM)–a simulated group management practice. This purpose of this paper is to briefly describe one interactive venture taken by undergraduates in the Strategic Management in Healthcare class. The students implemented strategic decisions and re-sponded to the outcomes of these decisions for a virtual three year period. Student evaluations were positive, and they indicated that using material from their other healthcare administration courses was essential for opera-tional success. Further, they noted that the degree of effective teamwork was positively related to success of the group practice.

IntroductionIncreasing challenges in the management field have highlighted the im-portance of simulations in student coursework (Rollag & Parise, 2005; Schumann, Scott & Anderson, 2006; Thompson, Purdy & Fandt, 1997). Such experience allows students to participate in situations that would not be possible to create in real life. Other healthcare courses have found that such

64 The Journal of Health Administration Education Winter 2009

a technique to enhance student learning. Jenkins and Lemak (2007) illustrate how a simulation developed students’ abilities regarding healthcare law and practice. Additionally, information gleaned from student involvement can help guide curriculum decision-making. McKone and Bozewicz (2003) report that simulation experiences provide students a way to learn about an integrated approach to management, including their making decisions about human resources, marketing, and finance.

Pfeffer and Sutton (2000) purport that work experiences allow for em-ployees to fail, learn from their failures, and try again. Simulations provide a safe environment as students gain experience while there exists no real risk regarding patient outcomes or lost revenue. Also, Washburn and Gosen (2001) find that simulations let students learn by doing. Stephen, Parente, and Brown (2002) report that simulations allow students to integrate what they have learned from individual college courses. As Davis (2001) states in a pedagogical text, such technology may be used to strengthen instruction.

In designing the strategic management course, one goal identified was to involve students in a simulation so that they might understand the importance of strategic management. The Medical Group Management Association’s Virtual Practice Manager (MGMA VPM) allowed for students to participate in healthcare management decisions that would not be pos-sible to create in real life. The Medical Group Management Association (MGMA) is a professional association committed to the improvement of medical practices and professionals in the United States. MGMA offers its members (21,500) information and education to continually improve health care related to practice management. The students learned that manage-ment matters regarding planning, organizing, leading, and controlling. Further, they learned firsthand the benefits of effective teamwork, and, in some cases, the disadvantages of ineffective teamwork.

Project DescriptionStrategic Management for Healthcare Organizations is a 16-week under-graduate capstone course at Idaho State University designed for students to integrate and apply knowledge learned from other classes in a simulated environment. This class was the first class in the healthcare administra-tion program to adopt the VPM. During the first half of the course, we discussed the meaning and role of strategic thinking, reviewed strategic functions—the specific activities that help create and maintain an effective strategy (Griffith & White 2007), and examined basic techniques that help guide strategic thinking [i.e., the value chain adapted by Swayne, Duncan, & Ginter (2006)]. During the latter half of the course, students managed an


Internet-based virtual group medical practice, designed for them to apply knowledge to a variety of practice situations, from expanding services and managing costs to assessing readiness for EMR implementation. Critical to the success of the course was the recognition that students’ understanding strategic management concepts–that they had read about in the first half of the course–mattered during their work with the VPM.

To offer feedback, the VPM presented scores as Success Performance Indicators (SPI) that reported outcomes resulting from student decisions. The SPI is an aggregated, composite performance score, generated by VPM’s logic. It represents an overall assessment of the team’s overall performance of the tasks associated with the round. The VPM simulation is constructed such that decisions made in one area of the practice have direct and indi-rect impacts on other areas of the practice. For example, a reduction in the number of employees may improve the expense ratio of the practice, but may have a detrimental effect on physician productivity or on the ability of the practice to collect on past due accounts. The SPI is a numerical value and, as a team’s performance improves, the SPI increases. As students com-plete tasks through the various rounds, the SPI scores reflect their relative performance compared to others at the same point in the simulation.

The students were placed into three teams of four members per team during the fourth week of class. An introduction to VPM was discussed and team members logged on to the Internet site to view their practices. The practices were the same regarding specialties, number of physicians, patient base, payer mix, etc. Each team had access to laptop computers and the Internet. Team members decided which of its team members were in charge of human relations management, direct finance and accounting reporting, and research. Each team then made decisions regarding hiring and firing, contracts with providers, and other changes as needed to man-age the practice. Each team kept a journal that recorded meetings, deci-sions, rationale for the decisions and time spent. The teams met in person and virtually throughout the rest of the semester, and business decisions made for their individual practices were made independently. On average, student team members spent about eight hours per round (for a total of about 32 hours outside of class for the VPM experience). See Appendix A for a detailed description of the VPM tasks for each Round.

Management FunctionsThe MGMA VPM is part of the students’ experience in the capstone course. The program does not have a track in physician practice management. Stu-dents need not have prior knowledge of practice management particulars


to participate in the VPM. Rather, their performance was affected by their knowledge gleaned from prerequisite classes. In their lower level health administration/business courses, students have studied the functions of management, based upon the work of Fayol (1916). These functions are to plan, organize, lead, and control. In each round, team members made decisions that required an integrated approach to management, utilizing these functions that they have been exposed to in other classes.

Managers are the ones who plan—they coordinate the staffing, for example. How well they plan influences how effective they are in their position. With reference to the VPM, team members were introduced to planning during the first round of the first level as they became familiar with the simulation. To illustrate, they reviewed staffing levels and made decisions regarding hiring and firing. Further, each round was an exercise in strategic planning as they made and implemented decisions, and evalu-ated the clinic’s performance based upon what they decided. At the end of each round, the VPM produced feedback on the team’s performance via the SPI that showed financial reports, employee morale indicators, and an overall performance score. For example, if the team members decided to terminate employment positions, the positive and/or negative effects of this decision was shown by reports on employee morale, medical revenue generated, and accounts receivable.

Managers are the ones who organize–they make the schedule and de-cide whether or not to increase or decrease the length of days to schedule patients. Additionally, managers are the ones who lead–they exhibit com-petency and integrity, and they motivate others. The students dealt with HR issues of alleged sexual harassment; they responded to a physician’s resignation; and they determined if an EMR should be implemented. Again, the SPI indicates positive and/or negative outcomes regarding their deci-sions implemented.

Lastly, managers are the ones who control—they monitor and evaluate how the strategic plan is unfolding and determine how to get the efforts back on track if needed. The performance of team members who were responsible for finance and accounting reporting was important to team success measures regarding control, and the SPI results generated gave the students a score that demonstrated its importance.

Teamwork The importance of teamwork for effective healthcare delivery is well docu-mented (Buchbinder & Thompson, 2007; Heinemann & Zeiss, 2002; Leg-gat, 2007). Strategies for teaching effective teamwork are as well (Cellucci,


2005; Heinemann & Zeiss, 2002; Leggat, 2007; Weitzel, 2002). To elaborate, Leggat (2007) surveyed health service managers in Australia to identify individual competencies that positively affected healthcare team endeav-ors. The VPM experience also offered students opportunities to develop identified competencies from Leggat’s (2007) research. These competencies included verbal communication, leadership, knowledge of organizational goals and strategies, commitment to working collaboratively and toward quality, demonstrating respect for others, and working with a cooperative attitude.

Students earned higher SPI scores after each round if they demonstrated knowledge of organizational goals and strategies about human resource management issues, payer contracts, EMR implementation, and financial planning. Also, the VPM experience offered opportunities for team mem-bers to communicate positively with one another—they had fun discussing what should be included for the next round’s strategy, evaluating their progress, and committing to a ‘redo’ if necessary. The team members also met regularly in person and virtually, and they worked collaboratively in the decision-making process. It should be noted, however, that there was external motivation regarding their commitment to quality. The VPM was worth 20 percent of the students’ overall course grade, measured by clinic performance (the SPI results) and individual participation. The clinic per-formance was measured by the SPI reports for each round submitted and the information included in the students’ journal. Individual participation was measured by confidential evaluations submitted by students regarding their work experiences with other team members.

Evaluation of the ProjectOverall, the MGMA VPM was deemed a positive learning experience by the students. They were able to see the relevance of planning, organizing, leading and controlling in an interesting simulation, and they learned the importance of effective teamwork. End of the semester student course evalu-ations included the following comments: “I appreciated the opportunity to ‘run’ a clinic. Operations management is important.” “I enjoyed working with other students. Dividing up decision-making responsibilities helped our team perform better.” “I didn’t enjoy my accounting classes when I took them, I now know that it was a good idea for me to have taken two accounting classes.” “HR is important to help create a profitable center. If your staff members’ morale is low, you need to respond.” Course evaluations also included negative comments that referred to the extra time involved with the project. “I work, have a family, and take classes. This project took


too much time; my team suffered because of my absence.” These comments confirm that while a class lecture tells the students about the importance of effectively performing management functions, this simulation taught them this point.

The MGMA VPM experience also affected course curriculum. A require-ment in the undergraduate healthcare management program at Idaho State University is that students minor in Business. Faculty members, students, and practitioners on the program advisory board have debated the value of the minor. Student evaluation comments offered support as they noted that skills learned from their business courses were positively associated with successful performance.

A noteworthy feature of this project is that it involved a collaborative effort between the university and the MGMA staff. The project began with ongoing dialog between the instructor and the MGMA representatives. Throughout the course, MGMA representatives served as a resource for technical support for the instructor as well as an individual team that ex-perienced difficulties accessing data. The positive communication between MGMA and the users of the VPM allowed for productive use of time spent by students on their team. If they had a question, there was support from the instructor and MGMA staff to help address the issue. Such projects fol-low Prybil’s (2003) call for more active engagement between the academic community and our colleagues in the practice community.

One caution that should be addressed regarding the project concerns the commitment of time. It was imperative that the students own the project, given the effort needed to complete the project. Potential problems were avoided because the students were exemplary. For example, student “no-shows” for teamwork were a concern for only one of the teams. Students committed the time needed to analyze reports appropriately and critically examine their decisions. Further, before the simulation was adopted as a class project, the instructor introduced the teaching technique to the Department’s Student Advisory Committee. The Committee members’ endorsement probably contributed to the class members’ willingness to adopt the project as one that deserved commitment. They were willing to give extra effort beyond the class for an experience in group practice management. In turn, the MGMA VPM project made the class more relevant to them.

AcknowledgementsRecognition is expressed to the following students: Liz Belliston, E’leesha Benson, Kasey Call, Ryan Dupuy, Michelle Graefe, Jennifer Harris, Cynthia Jensen, Logan Kinghorn, Amos Kington, Jesse Mehojah, Ben Murray, and Sean Powell.


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Appendix A

Teaching Healthcare Management via Interactive Simulation: The MGMA VPM

Design of the Virtual Practice Manager

Round 1 Goal: Become familiar with the VPM and the practice:

Student tasks include:

• A review historical financial statements;• Forecast capitation revenue based on current trends;• Develop a fee-for-service revenue forecast for each payer; • Estimate practice services and general expenses for the next two

years; • Forecast other income for the next two years; • Estimate changes in accounts receivable; • Estimate other operating cash flows; • Evaluate scheduling performance and consider actions required; • Review staffing levels and make HR decisions; and • Evaluate payers.

Round 2 Goals: Evaluate performance from Round 1, choose an EHR system, and respond to the resignation of a doctor:


• A review and comparison of financial results with forecast; • Review and forecast capitation revenue; • Review and forecast fee-for-service revenue per payer; • Estimate services and general expenses for the next two years; • Forecast other income for the next two years;• Estimate other operating cash flows; • Select electronic health records system to implement; • Review coding reports and make recommendations to improve

future practices. • Evaluate scheduling performance and consider actions required;


• Review staffing levels and make HR decisions (including salary and benefit increases); and

• Review payer decisions.

Round 3 Goals: Evaluate performance from Round 2, prepare for EHR system implementation, and respond to HR issues.


• A review and comparison of financial results with forecast; • Review and forecast capitation revenue; • Review and forecast fee-for-service revenue per payer; • Complete planning for electronic health records system implemen-

tation; • Estimate services and general expenses for the next two years; • Forecast other income for the next two years; • Estimate changes in accounts receivable; • Estimate other operating cash flows; • Special Challenge: Evaluate screening room process; • Special Challenge: Evaluate insurance card collection process; • Review results of coding investigations;• Evaluate scheduling performance and consider actions required; • Review staffing levels; Make HR decisions (including salary and

benefit increases); and • Review payer decisions.

Round 4 Goals: Evaluate overall performance, evaluate payer agreements, respond to a harassment charge, and review if practice should add OB/GYN services.


• A review and comparison of financial results with forecast; • Review and forecast capitation revenue; • Review and forecast fee-for-service revenue per payer; • Estimate services and general expenses for the next two years;• Forecast other income for the next two years;• Estimate changes in accounts receivable; • Estimate other operating cash flows; • Review results of coding investigations;


• Special Challenge: Attracting New Patients and Growing the Prac-tice;

• Special Challenge: Physician Compensation;• Special Challenge: Address a harassment change against one of the

physicians; • Special Challenge: Determine how to best use extra space; • Evaluate scheduling performance and consider actions required; • Special Challenge: Evaluate a proposal to add an OB-GYN specialty

to the practice;• Review staffing levels and make HR decisions (including salary

and benefits increases); • Special Challenge: Assess and make recommendations regarding

current governance program; and• Review payer decisions.


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