This article appears in the March 2012 issue of HealthLeaders magazine.
With a nationwide physician shortage juxtaposed against the need for organizational growth to bolster the bottom line, hospitals and health systems are constantly, and feverishly, trying to fill physician vacancies. However, the "fervor to fill" can create a reactive recruiting cycle that can cloud the strategic nature of the hiring process and ultimately result in ill-fated personnel choices. With millions to be gained or lost with each decision, creating a comprehensive recruitment strategy can help you hire and keep Dr. Right and sidestep Dr. Right Now.
Six years ago, J. Gregory Stovall, MD, senior vice president of medical affairs and organization development at Trinity Mother Frances Hospitals and Clinics in Tyler, TX, brought to light an employment issue: The 400-plus-bed organization was losing far too many physicians. His organization had a physician turnover rate of 14%, more than double the industry average, according to the 6th annual Physician Retention Survey from the American Medical Group Association and Cejka Search.
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The stats caused Trinity Mother Frances, which employs more than 250 of its nearly 500 physicians, to reevaluate how it approached the whole process. The organization estimated $50,000–$75,000 was spent per physician on recruitment. Then there was the additional $200,000–$300,000 spent to train, credential, market, and onboard the physician. Total cost per new recruit came to roughly $250,000–$350,000.
Stovall's initial estimate of the financial loss due to turnover was conservative. After calculating the recruiting and onboarding costs, the organization looked at benchmark data and also calculated the downstream revenue lost when a physician left the organization. The result: An estimated $1 million per physician was lost with each doctor's departure, Stovall says.
The retention numbers made it clear that the organization needed to keep the physicians it hired and to be certain it was hiring candidates that fit the organization. To do that, it needed to get ahead of recruitment and slow turnover. Stovall says to accomplish these goals the hospital created an annual $100,000 retention budget. The money was used for outings, training programs, and other events to appeal to physicians and bring them into the fold.