There
are many costs involved with recruiting and retaining medical staff. HR experts
project a cost factor of 16% to 20% of the physician’s annual salary purely as
replacement costs, notes Dr. William Matzner in his analysis.
Just like in any business, it is prudent for a medical
clinic to retain physicians over long periods of time. Uncontrolled turnover is
costly not just in real dollars, but also in staff morale, patient retention
and patient satisfaction. Although medicine may be practiced universally, each
clinic and office has its own way of seeing patients, documenting findings,
doing and reporting labs and x-rays and after-hours coverage. Those factors are
always affected negatively when a “replacement” physician is interjected into
the mix.
Dr. William Matzner, MD, based in California, provides his
insights in a review article. Dr. Matzner is a recognized expert in Healthcare
and Neuro Economics. He has conducted extensive research in and taught Cost
Effectiveness Analysis, a methodology he utilizes to evaluate and recommend
corporate health and wellness programming predicated on achieving targeted and
desired programming and outcomes for organizations.
There are many costs involved with recruiting and retaining
medical staff. But focusing just on productivity, it takes time to train the
physician in the specific logistics of the practice, and decreases in
productivity while the new physician is familiarizing themselves with how the
clinic is operated. Generally speaking, HR experts project a cost factor of 16%
to 20% of the physician’s annual salary purely as replacement costs. Add to
that number recruiter and interviewing costs, and a $200,000 internist can
easily cost $65,000 to replace and onboard.
But this is just what you might consider the direct costs.
The indirect costs include, for example, staff upheaval (physicians often
create close bonds with staff.) Also, a physician departure, depending on the
reasons, may cause other staff to depart as well. Further, depending on the
clinic patient structure, you may actually lose patients or at best, have to
deal with disgruntled patients. What is the value, the cost, of these issues? More
importantly, are you building them in to the cost of replacing a physician?
Moreover, and this is the elephant in the room, do you
build them into the cost of retaining a physician? Recruitment and retention
run hand-in-hand, but too often cost is based simply on the known directs:
recruiter and relocation fees. The perspective I’ve seen too often is that
other doctors will take over seeing the departing physician’s patients, so
we’re not losing anything, right? Wrong.
When you build a model that measures and values ancillary
staff turnover attributable to a physician departure or recruitment, that
measures and values lost or unhappy patients, and then add in the recruitment
and productivity costs, you will arrive at a very important number – the value
of keeping physicians, of reducing turnover and possibly the understanding of
the value of adding monies to your retention budget.
In order to retain physicians a clinic may need to offer
more time off, less after-hours coverage and shorter hours. A critical analysis
may prove these and other retention initiatives are less costly than turnover.
Cost effectiveness analysis (CEA) is a unique and clever method for analyzing
this problem. Using decision tree models, and assigning not only cost but
effectiveness data to the model, it will be possible to make a more informed
decision as to how to recruit physicians and what economic and non-economic
incentives to offer them in order to create an actual recruitment and retention
program rather than just a recruitment program.
If your objective is to provide the best decision-making
for your organization and take a global view of your business, expanding your
sights beyond ROI, and educating other decision-makers, Cost Effectiveness
Analysis can make your organization more competitive and more profitable.
*** William Lee Matzner, MD., is a recognized expert in
Healthcare and Neuro Economics. With a Ph.D. in Economics, MBA and Medical
Doctor degree, Dr. William L. Matzner will provide you with expert analysis on
health and wellness programming, populations health management, disease
management, new program development, facility development, equipment
acquisitions, and other healthcare programs, acquisitions and initiatives. For
more information about cost effectiveness analysis and improved financial
accountability for your organization, visit Dr. Matzner at
http://healthcareanalytics.biz. Dr. Matzner is also available for speaking
engagements, retreat presentations and topic specific addresses.
Consulting Website: https://healthcareanalytics.biz
Website: https://drwilliammatzner.com William Matzner, MD (Simi Valley, California), has been practicing medicine since 1989, Internal Medicine and Reproductive Immunology. M.D. with Honors from Baylor College of Medicine.
