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Re: The Cost of Physician Turnover

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Dear Colleagues:

Enclosed is a short document (authored by Laura Dydra) from Becker’s Hospital CFO Report which you may have missed. It is worth pausing for a moment to review this. Did you ever wonder what you were worth to your hospital? This document gives some insight into the cost of replacing a physician who leaves a mature practice. Of course, there are many reasons for an individual departing a mature practice and these might include burnout, retirement, or simply an alternative better opportunity. In my practice, I’ve seen many excellent surgeons depart for other opportunities and always wondered why it seemed my organization didn’t work hard to retain them. In fact, it seems to me that many for-profit organizations work very hard to recruit the best talent and then to keep these individuals. In my experience, this doesn’t seem to be the strategy at some large not-for-profit Academic Medical Centers (AMCs).

Given the tremendous financial stress now facing AMCs, this is hard to understand. If one considers, as stated in the enclosed article, that an orthopedic surgeon generates hospital revenue of $3.29 million/year (a number which I think is probably an underestimate for a busy orthopedic surgeon), then add to this the cost of funding a new physician before he/she becomes revenue neutral (perhaps 2 years), and then consider it may take 2 years after a busy practitioner leaves to find and replace the surgeon. The total cost of losing a productive surgeon and replacing him/her could be upwards of $9 million (based on two years revenue loss and assuming overall cost of new hire including benefits of 1.2 million/year for 2 years). While these numbers are only guesstimates, the cost is significant, and this does not include the impact to academic productivity if the individual departing is a productive researcher as well.

Perhaps I’m overstating this issue, but I think not. What do you think?

Best Regards,

Jon “JP” Warner MD

Founder, CSS


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