Keith A . Herl , MHA , MBA | Matthew Mingenback

In today ’ s ultra-competitive market , smart healthcare delivery organizations have sought to improve their margins by capitalizing on strategic advantages and maximizing efficiencies . However , most organizations have yet to adequately address one inefficiency that costs millions of dollars annually – provider turnover .

In fact , less than one-quarter of healthcare organizations measure the cost of provider turnover and / or have a plan in place to promote retention of their providers , despite the impact turnover has on the Triple Aim : cost , quality and access .

Effect of Physician Turnover on Healthcare ’ s Triple Aim

The Institute for Healthcare Improvement ’ s Triple Aim seeks to decrease cost while increasing quality and access to medical care . Physician / provider turnover has a negative and widespread impact on all three areas of the Triple Aim and beyond .

Swollen Costs

Turnover carries a significant price tag . It ’ s been estimated that clinician turnover may result in losses of up to 6 percent of an organization ’ s annual operating budget 1 , as many indirect costs often aren ’ t accounted for by organizations . Between the loss of clinic , inpatient , specialist referrals and ancillary services , the opportunity cost of losing a provider can add up to more than $ 1 million dollars . Add the direct costs of recruiting and onboarding a new physician , and the total cost of losing just one physician can equal nearly $ 1.3 million dollars 2 .

The Cost of Losing a Physician 2

Average annual start-up cost / FTE $ 211,063 Total Turnover Cost / FTE $ 1,262 , 296

The average annual physician turnover rate is estimated to be somewhere near 7 percent ( but could be even higher in today ’ s market ). Operating under this assumption , an organization with 200 physicians that is able to reduce their turnover by just 1 percent could save over $ 2.5 million in one year alone .

Consequences for Quality

In addition to the costs , provider turnover invariably can reduce quality of care . One study3 found that turnover in healthcare organizations may result in :

Decreased organization morale and employee engagement and satisfaction

Decreased efficiency and precision of care Increased provider illness and absenteeism Increased feeling of provider “ burnout ” Increased workload on other providers and employees

TODAY ’ S PRACTICE : CHANGING THE BUSINESS OF MEDICINE 24