Organizations rarely report the cost of turnover in their financial statements, but they do talk about it.
The issue of employee turnover comes up more and more frequently in leadership meetings. More often than not the emphasis is on nurses, therapists, technologists, programmers and other key, hard-to-recruit categories. What they do not talk about with the same frequency or gusto is physician turnover, which would move employed physicians into the mainstream of the talent acquisition and retention discussion, and appropriately so.
Physician turnaround hovers between 6.8 and 11 percent nationally, depending on specialty and whether you incorporate nurse practitioners and physician assistants. This calculation is based on a survey of medical groups representing 19,500 physicians. Compare this with the turnover rate from hospital CEOs which is around 18 percent, with an average tenure of 3.5 years. The cost of physician turnover is the big differentiator here: between $500,000 and $1.2 million with the latter being closer to reality, several hospitals CEOs with whom I spoke said.
Clearly this is a problem that health systems and hospitals cannot afford, especially with the looming significant critical shortages of primary care physicians (PCPs). Here is the upshot: As Baby Boomer physicians retire — and a surprising number now say they are planning to retire sooner than they originally planned — the competition to recruit established physicians who are willing to entertain a move, as well as the demand for new PCP residents who complete their training every June is torrid, and it will only grow more intense.
Now consider this: One survey found that 54 percent of physicians who are recruited leave within the first five years. That is another reality and a cost that health systems, hospitals and free-standing group practices simply cannot afford.
The irony here is that hospitals spend more time and money screening candidates for lower level positions than those with a higher economic impact such as physicians. Moreover, they do not invest in onboarding programs or focus on retention because if they did, they would know what drives the turnover and then plot strategies to offset this costly phenomenon.
Here is what we recommend:
© 2021 John Gregory Self