Physician burnout has become a major problem in the U.S. healthcare industry. New stories about doctors’ crushing workloads and emotional struggles are covered frequently in the media, illustrating the urgent need for workplace change. Most of the coverage focuses on the emotional impact of burnout on doctors and their patients. However, I would like to cast a light on the hidden and significant financial repercussions of physician unhappiness and the opportunity that investors have to turn the tide. Engagement matters in medicine, as much as it would in any other field; healthcare businesses can only achieve their full potential and financially thrive when management teams and their boards take the time to ensure that clinical providers are happy and supported in their daily work.
The Turnover Problem
When it comes to finding a job in medicine, the market weighs decidedly in physicians’ favor. According to one 2017 survey from Merritt Hawkins, a full 70% of surveyed medical residents said that they received 51 or more job offers during their training. Of that group, 50% mentioned that they had received well over a hundred solicitations during the same period; primary care specialists, in particular, fell into high demand.
Despite — or perhaps contributing to — this high demand, few doctors seem to remain at one practice for very long. An estimated 54% of physicians move on from their group within five years of settling down. For some specialties, expected tenure is even direr: dentists, for example, typically remain in one location for a mere three years.
With the high rate of turnover and intensely competitive market, the cost of obtaining and retaining talented staff members has become a critically expensive endeavor. Analysts from the New England Journal of Medicine’s Careers division estimate that after accounting for all expenses from recruitment efforts, start-up work, and lost revenue, the turnover cost can come to as much as $1 million per physician. The hiring cost is exorbitant, even for organizations within massive medical networks, and has made retention an urgent strategic priority for clinical businesses.
The Disengagement Drain
The issue of financial cost does not begin and end with turnover rates. Even those employees who remain with one practice for years may not be bringing their full potential to the exam room. Morale is at an ebb; one Jackson Healthcare study found 42% of physicians to be dissatisfied with their jobs, while another survey reported that 54% of surveyed physicians “described their morale as a somewhat or very negative.” Even more startling, nearly a third of those included in the second study mentioned that they would opt into a field other than medicine if they had a chance to redo their careers.
There’s no mistaking these statistics: engagement is at an ebb. However, this low morale does more than sour the day-to-day working environment — it also severely undercuts potential business outcomes and patient experience.
In 2015, Gallup conducted an engagement survey on a hospital system and found that “fully engaged and engaged physicians gave the hospital an average of 3% more outpatient referrals and 51% more inpatient referrals than physicians who were not engaged or who were actively disengaged.” Even more significant, researchers found that engaged physicians were 26% more productive than their disengaged peers — a boost which equates to an average addition of $460,000 inpatient revenue per physician per year.
Engagement Demands a Multifaceted Approach
The problem health-centered organizations face today is threefold. To avoid accruing the immense recruiting expenses and opportunity costs that result when doctors disengage from their work, businesses need to focus on obtaining, retaining, and engaging talented staff members in equal measure.
If health-centered organizations truly want to stop their recruiting efforts from hemorrhaging losses, they need to focus on improving the physician experience. For the most part, doctors who leave their positions do so because of issues with the practice; they feel as though they have insufficient support from their administrators and overloaded schedules. This anxiety around overwork starts early; medical residents report that a lack of free time is one of the foremost concerns when they enter the job market.
Improving working conditions for doctors is a moral imperative — and a financial must. The math is simple and the logic straightforward: ventures that attend to their doctor’s concerns by improving access to resources and support, prioritizing physician well-being, and increasing communication and the level of control doctors have over their schedules will boost engagement and establish a foundation for both a happier workforce and a successful business.