Insights on Reducing Physician Turnover

Improve Physician Retention and Boost Your Bottom Line
In Their Words: The Real Story on Physician Turnover

Table of Contents:


Physician Dissatisfaction Growing

As the shortage of healthcare professionals worsens across this country, residents and physicians are changing jobs more often in search of better opportunities. Industry research pegged average annual U.S. physician turnover at 20% by the end of 2004.

Survey results released in late 2006 by the American College of Physician Executives (ACPE) indicate that low physician morale could prompt even higher attrition rates.

Almost 60% of the 1,250 physicians responding to the ACPE survey said they had considered leaving medical practice over discouragement with the state of U.S. healthcare. Nearly 70% of survey respondents said they knew at least one physician who had done so already. The top five contributing factors to physician turnover cited by survey respondents were:

  1. Low reimbursement
  2. Loss of autonomy
  3. Bureaucratic red tape
  4. Patient overload
  5. Loss of respect

Reimbursement issues - 22%

Administrative/business agendas interfering with clinical decisions - 22%

Lifestyle issues: Too much time at work - 18%

Medical liability issues - 17%

Federal regulations, policies, procedures - 6%

The ACPE survey results validate findings from a physician survey conducted by physician recruiting firm LocumTenens.com earlier this year.6 Among more than 2,800 respondents across 18 specialties, only 6% said they weren't frustrated with medical practice.

  • However, regardless of their frustration, more than two-thirds of respondents (69%) said they would choose medicine as a career path if they had it to do over again. Why? Because most physicians go into medicine for altruistic reasons.
  • However, the majority of them still have medical school debt to repay and families to support-and the costs of running a practice continue to escalate.
  • Meanwhile, physician salaries haven't kept pace in many specialties.

LocumTenens.com's 2006 compensation survey across 18 specialties indicates the average physician salary increased only slightly (less than 1%) from $231,128 in the physician recruiting firm's 2005 survey to $232,934 in 2006. Physicians remain among the most highly compensated U.S. professionals, so why should healthcare organizations pay attention? Because frustrated physicians usually create dissatisfaction among nurses and other healthcare employees, and dissatisfied employees often provide less-than-stellar patient care. This leads to poor efficiency, lower quality scores and, ultimately, fewer referrals to a given facility.

Based on several studies of its national data on patient, employee and physician satisfaction, consultants at Press Ganey have identified strong correlations among the three: "Successful health care organizations measure and improve upon the things that matter. In health care, nothing matters more than the experiences of patients and the physicians and employees who serve them. Focus in these areas is proving increasingly to bring results to the bottom line."

Frustrated physicians usually stick around for a while trying to make good on their professional commitments and work toward positive change, but they eventually leave one way or another - and they can poison a work environment during their decision- making process.

Physician Turnover = Loss in Revenue

When LocumTenens.com asked 2,800 physician-respondents (more than 80% of them employed full-time) whether or when they envisioned changing jobs, 44% said they had no plans to do so at that time. However, 35% percent of respondents said they planned to change jobs in the next year and, including those, 53% expect to change jobs within 3 years.

Physicians are most vulnerable in the early years. A 2005 survey by the American Medical Group Association (AMGA) and Cejka Search found that, among the physicians leaving a group, 47% left in the first three years and 60% left in the first five years.

Replacement and recruiting costs vary by geographic region and specialty. However, based on 2004 data, Press Ganey estimated the total cost for replacing one physician in family practice, internal medicine or pediatrics to be approximately $250,000 - a quarter of a million dollars for replacing one lost physician.

This does not include the "soft" costs incurred due to physician turnover, including disrupted work processes, lower morale among employees left behind, and gaps in patient care. The estimate also fails to include the potential damage to the organization's reputation; the lost referrals from that physician to friends, family and patients; and the effect the physician's departure might have on recruiting other physicians to work at the facility.

Physician Supply Decreasing, Making Physician Turnover an Even Greater Concern

What makes all of these findings even more significant - and a root cause of physician frustration-is that we're not producing enough physicians to meet growing demand across the country. While the U.S. population grew by 30% over the last quarter - century, the number of physicians produced by U.S. medical schools remained flat at approximately 16,000 physicians per year.

Several trends are causing this shortage, primarily:

  • The aging of the U.S. population: Life expectancy for Americans increased by almost 60% during the 20th century, to 77.6 years as of 2003
  • Medical advances that are allowing us to diagnose and treat an ever-expanding number of illnesses, advances that extended life expectancy by almost 60% during the 20th century
  • Double-digit increases in medical liability insurance premiums in recent years
  • Physician frustration with increasing bureaucracy and overhead costs, long work hours and declining reimbursement for services rendered

Experts predict we could reach a shortage of 50,000 physicians by 2010 and 200,000 by 2020.

And the race is on. With a physician shortage and considerable physician frustration as a backdrop, U.S. healthcare organizations are looking for more physicians than they were a year ago and starting to focus more on physician retention.

Findings from a recent LocumTenens.com survey of nonagency physician recruiters included the following:

  • Almost half (45%) of responding physician recruiters recruited more than 20 physicians in the past year, compared to 27% of respondents who reported that volume of physician-recruiting activity in summer 2005.
  • About a third of respondents (32%) recruited more than 30 physicians in the past year, while 60% recruited more than 10 in the same time frame (up from 48% in the physician recruiting firm's 2005 survey).

Use of locum tenens physicians is on the rise:

  • The number of organizations using no locum tenens physicians decreased by 12%, from 32% in 2005 to 20% in 2006.
  • The number of organizations reporting they had used up to 10 locum tenens physicians in the past year increased by 10% (from 50% in 2005 to 60% in 2006)
  • The percentage reporting their organizations used more than 10 locum tenens physicians in the past year increased by 5% (from 20% in 2005 to 25% in 2006).
  • Among that quarter of respondents, 14% reported using more than 20 locum tenens physicians in the past year - double the 20+usage rate last year.

As demand for physicians increases and competition to recruit them heats up, it becomes even more critical that healthcare organizations sharpen their focus on avoiding physician turnover and improving physician retention at their facilities.

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