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6 Physician Retention Strategies

 |  By kminich-pourshadi@healthleadersmedia.com  
   June 06, 2011

If the greatest asset of a healthcare organization is its physicians, why then are so few resources put into retention and so many put into recruitment? It's a costly imbalance, explains J. Gregory Stovall, MD, senior vice president of medical affairs for Trinity Mother Frances Hospitals and Clinics in Tyler, TX and Lori Schutte, president of the healthcare recruiting firm Cejka Search.

Schutte and Stovall spoke on techniques for hiring and retaining star physicians during the April American Medical Group Association annual conference in Washington, DC. I caught up with them to learn more about quick, low-cost strategies that hospitals or health systems can use to decrease their turnover.

"We know from surveys that the critical time period after a physician is hired is the first one to three years," says Schutte. "Somewhere in there they start to get unsettled."

Just 5 years ago, Stovall explains, his organization had a physician turnover rate of 14%, more than double the current industry average, which hovers around 6.1%, according to a Cejka Search survey. The 400-plus-bed system, which employs more than 250 of their nearly 500 physicians, took a step back and decided to evaluate retention's true cost.

"We realized we'd been resting on our laurels. Retaining our outstanding physician has to be a high priority," says Stovall. "Every organization recognizes the value of hiring a superstar physician, yet very few invest the time and energy to create intentional strategies that contribute to retention."

Stovall says when Trinity Mother Frances Hospitals analyzed the numbers, the need to get a retention strategy in place became clear. The organization estimated $50,000–$75,000 was spent per physician just 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 went to the CFO to get a better understanding of how much the organization was budgeting for turnover, "Because it's never zero. There are always people leaving or retiring. But we weren't budgeting for it."

A quick show of the math and Stovall had their attention, "I explained that if we lower[ed] our turnover rate by just one percent, we [would] save nearly a half a million dollars."

Stovall's initial estimate of the losses due to turnover ended up being a conservative one. After calculating the recruiting and on boarding 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.

"It just made sense to budget for and invest in retention in order to reduce our turnover," says Stovall. So they set aside approximately $100,000 for a retention program—or approximately $300 per physician. Since doing so, they've seen their turnover rate drop to just 4% and hold steady for several years.

Six strategies that both Stovall and Schutte agree help keep turnover low include:

  1. Mentoring: The cost of adding a mentoring program for an organization is generally low, as most organizations don't compensate their staff for this duty. The return on investment in terms of retention, however, can be great.

    According to a Cejka Search survey, organizations that use this retention strategy see their turnover drop approximately 1%. "That may sound small, until you do the math," notes Stovall. His organization added a mentoring program, and it cost them nothing to do so.

  1. Leadership Development: "We began to recognize that when physicians are engaged in leadership, they develop a loyalty and a sense of ownership that contributes to retention," says Stovall.

    To that end, Trinity Mother Frances Hospital created a leadership development program, investing approximately $65,000. The money is used to send their physicians to large national conventions as well as for their own, onsite, bi-annual leadership development courses.
  1. Family and Future: Just as physicians need to treat the whole patient and not just the individual ailment, retention needs to consider the whole employee—including their career goals and the physician's family, says Schutte. Moreover the process of retention, both Schutte and Stovall agree, actually begins with your recruitment process.

    "Sometimes a physician moves and adjusts, but the family never makes the adjustment to the community. It can be very hard to move to a new neighborhood and school," adds Schutte. "When you have a whole family involved, everyone needs to make the adjustment. Essentially, you're not just recruiting the person but the whole unit."

    Schutte says organizations should always recommend that the family come to the interview with the candidate so everyone can decide if this is a good fit. "What do you know about this physician other than where he trained and worked? What are his or her life goals and what does his or her family look like?" she adds.

    To that end, Stovall says his organization set aside $25,000 to host networking events and an awards dinner as well as family events.
  1. Employee Satisfaction Surveys: Ten years ago Trinity Mother Frances Hospital began using the AMGA employee satisfaction survey to get a pulse on how their employees felt about the organization. However, the results were not always acted on. Now, Stovall explains, when the results come back from the survey they are prioritized and addressed.

For instance, in their most recent employee satisfaction survey the majority of physicians were pleased with their compensation level. They felt, however, that communication between the administration and themselves was lacking. "Our people and culture committee will now develop a strategy to address this area," he says.

  1. Compensation: "The laws of economics hold true," says Schutte. "If you're in a popular location, your compensation structure will be lower. If you're not, such as in a rural location, it will be higher."

    Compensation structures should be clear and easy to explain, she says, and they should always be realistic based on the market. She adds that non-monetary benefits can also be factored in, such as flexible schedules that encourage better work/life balance.
  1. Primary Interviews: A well-planned interview process is an essential ingredient of retention, says Schutte. "The best indicator of future behavior is past behavior so know your candidate," she notes. "Having a structured, formal interview in which everyone knows what's going to be covered and what questions will be asked is also a great way to get an accurate assessment of the candidate's skills."

    Trinity Mother Frances Hospital uses a standard interview and a behavioral interview to screen candidates for their leadership potential and to get a sense for the direction these physicians might like to go with their careers, Stovall says.

Though millions may await you by reducing the turnover rates at your hospital or health system, there's one other benefit that may interest healthcare leaders.

"Like all health systems, in order to meet our strategic goals we need to maintain a predictable, reliable margin. …  It would be exceedingly disruptive and put our strategic plans in jeopardy if we returned to having high turnover," says Stovall. "We can't ever take for granted how important this is to maintain." 

 

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Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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