Replacing a physician costs facilities two to three times the departing physician’s annual salary. When hospitals can’t fill vacancies quickly during peak demand periods, it results in lost patient revenue, physician burnout, and decreased continuity of care.
Why do physician vacancies cost hospitals money?
Physician vacancies lead facilities to spend more on recruitment while generating less patient revenue.
As the physician shortage continues to worsen and patient volumes increase, burnout rates increase among providers who are left to cover the gaps. Burnout and turnover not only have a huge impact on physician well-being—they can also affect the long-term fiscal health of a hospital.
Prolonged vacancies due to turnover can lead to over $1M in lost revenue for some facilities because recruiting and onboarding new physicians can end up costing more than expected. When hospitals see steady patient loads with fewer providers to take cases, it means that there are patients going unseen, and hospitals are losing that revenue.
A common misconception is that a facility will save money when a senior or mid-career physician leaves, because the salary of a junior provider will typically be lower.
However, it’s essential to recognize the experience and expertise that mid-career physicians bring. Early-career physicians may not be equipped to handle more complex cases like their senior physician counterparts. When hospitals lose mid-career physicians, they not only lose their expertise but also their ability to mentor junior staff on more complex procedures. The result is that patients must travel farther to find a physician, which means not just the inconvenience and loss of continuity of care for that patient, but ultimately a loss of patient revenue for the facility.
How much do hospitals lose from physician turnover annually due to burnout?
Physician turnover costs hospitals $4.6 billion a year. Physician burnout is a common precursor to physician turnover.
“Physicians who are experiencing burnout are more likely to leave their organization within two years,” said Maryam Hamidi, PhD, during a presentation at the American Conference on Physician Health Stanford reported that the cost of replacing a physician who left due to burnout was at least $250,000—which ended up costing Stanford over $7 million per year. The American Medical Association’s estimates are even higher, ranging from $500,000 to more than $1 million per doctor. This means that addressing physician burnout at your facility can help you retain valued team members and avoid the high costs of recruiting and onboarding replacements.
At Mayo Clinic, a study analyzing payroll records of 2,500 physicians reports that in the two years following a rise in burnout, there was a 30-50% greater chance that physicians would reduce their professional output—leading to fewer patients seen, fewer elective surgery cases performed, and a loss of patient revenue for the facility.
How can hospitals prevent physician turnover?
Hospitals can prevent physician turnover by implementing strategic staffing solutions—like locum tenens.
This is especially true in times of peak demand. It’s important to project when certain seasons might be and ensure that you have a trusted locums partner to call on when your staff needs extra support.
Locum tenens can help hospitals experiencing physician turnover by providing temporary relief until a permanent provider can be hired. This helps mitigate physician burnout by ensuring that your other providers don’t have to take on an additional burden of care as a result of one provider’s departure. Having locums providers ready to step in during staffing gaps not only eases the burden on your existing team—it ensures patients continue to receive timely, high-quality care.
The result? Hospitals can navigate turnover without the accompanying loss in patient revenue.
With physician shortages and rising patient volumes, providers and facilities are facing increasing pressure. That’s why hospitals need to stay attuned to how members of their staff are doing. Supporting their well-being can help prevent burnout, turnover, and the high costs that come with it, especially during peak seasons. A good locum tenens partner should be a trusted resource and someone you can rely on to help navigate staffing gaps whenever they arise.
