The ROI of Retention: Health Systems Create Customized Work Plans

Karen M. Cheung , June 4, 2010

Even though turnover has been slightly lower than it's been in the past four years—5.9% in 2009 compared to 6.4% in 2005—more and more institutions might consider adjusting their recruitment and retention plans if they aren't already.

Known as the "vulnerable years," there is a retention drop-off from the second to fifth years of physician employment in which doctors tend to leave their institutions. For example, the highest peak of turnover (11%) is during the second and third year that physicians work, according to the survey.

What's the risk? Money can be one great cost.

"Physician turnover is very expensive," said Stovall. In fact, losing one physician could cost up to $1 million, he said. At Trinity Mother Frances Hospitals and Clinics, a physician is responsible for $900,000 of potential downstream revenue. Combined with the $60,000 in basic recruiting costs when losing that physician and another $250,000 for startup costs for a new doctor, that can add up to a hefty chunk of change.

"In general, you're talking over a million dollars for every physician that you have to replace. Therefore, if you can lower your turnover rate, for example from 7% to 5%, you may be saving your organizations hundreds of thousands of dollars," said Stovall. "The obvious conclusion is that its makes sense to be intentional about strategies that enhance retention and invest resources, in your budget, that enhance retention; there's a tremendous return on that investment."


Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for MedicalStaffLeader.com. She can be contacted at kcheung@hcpro.com.

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