Writing in the September 22 Becker’s Hospital Review, Laura Dyrda does a commendable job assembling estimates from various credible sources for different discrete costs associated with physician turnover. Differences by specialty and by duration of a vacancy can create a wide range in costs to a hospital. But it’s fair to say that using Ms. Dyrda’s sources (eg, Association for Advancing Physician and Provider Recruitment, Merritt Hawkins, New England Journal of Medicine, AMA) and her data points each physician turnover costs the hospital roughly a minimum of $3 million to $4.5 million. That’s per physician.
I submit that range also likely understates the “all-in” (direct and imputed) costs of each turnover. Here’s why.
Ms. Dyrda cites these 6 financial pain points in her analysis:
Lost hospital revenue from procedures, ancillary testing, admissions, and referrals when a physician departs
Interview expenses for replacement candidates
Relocation allowance for the physician’s replacement
Sign-on bonus
Student loan repayment
Malpractice insurance support
All true. All important.
Additional Costs Due to Physician and Clinician Turnover
There are additional costs she does not mention in her news brief.
For example, there can be these additional costs —
hiring a locum tenens physician until a replacement is on-boarded;
significant differences in clinical acumen and expected productivity between a newly minted physician and their predecessor that typically persist for months if not years (assuming the previous physician had several years of practice experience);
loss of formal and informal institutional knowledge (how to get stuff done quickly and effectively within the hospital);
diminished effectiveness and esprit among the care team previously associated with the now departed physician;
and potentially the most significant cost of all: the on-going impact of ”lost” patients and patient-related revenue if the physician moves to a competitor within or close to the same market.
My colleague, Paul DeChant, MD, MBA and I often hear hospital leaders say they are too busy to get personally involved in addressing clinician burnout. Or they lament that they don’t have the financial wherewithal to develop a comprehensive approach to making changes in workflow, work practices, and the work environment — in short, the very conditions that cause clinician burnout. We have to wonder: how closely are you tracking the complete financial impact of losing physicians, the most important determinant of your organization’s top-line results? Can you really afford not to invest in creating a more resilient, clinician-friendly organization?
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