The high cost of a bad physician hire
Hospital leaders know all too well that physician turnover rates are increasing, as are the costs of hiring replacements. Fewer have calculated the high cost of a bad hire, which – according to an article by Jackson Physician Search President Tony Stajduhar – can exceed seven figures.
There is significant pressure on hospitals to fill physician vacancies as quickly as possible given the impact on hospital revenues. On average, physicians generate $2.4 million for affiliated hospitals each year, according to Merritt Hawkins. But making a fast hire that doesn’t work out could be even more costly.
Consider that hospitals may invest $250,000 in a single candidate, including marketing, interview expenses, sign-on bonus, and relocation stipend. That doesn’t factor in the lost productivity time that current physicians, administrators, human resources and clinical staff devote to the selection and interview process. Next comes onboarding. One company that offers credentialing and analytics services placed “the cost to train, credential, market and onboard a physician” at $200,000 to $300,000, Stajduhar wrote.
That’s a lot to spend on a hire that doesn’t work out.
“All told, the cost of hiring a physician who doesn’t fit and then leaves can easily exceed $1 million when you consider the expense of recruiting, onboarding, and yet another vacancy and hiring situation,” he wrote in an article published in the New England Journal of Medicine’s Career Center.
Recruiting the right physician for long-term retention is a unique challenge, he wrote, given the time and expense involved, the current physician shortage, and the fact that one out of three doctors is now over age 65.
“To hire and retain the best fit for your position, remember that simply spending money to recruit and retain isn’t enough; you should make sure smart processes are in place, from interviewing to onboarding and filling a vacancy if it happens,” Stajduhar wrote.
That’s where Jackson Physician Search comes in. The company has four decades of experience in finding the ideal candidate for a physician opening and has identified the following effective, tested practices for long-lasting hires:
- Focus interviews on top candidates: Position your opportunity competitively to attract the right candidates for the right reasons, and carefully review them to remove “B” candidates. Do your homework to uncover and address issues in advance, and don’t interview candidates if a deal-breaker exists.
- Tailor the onsite visit: Make sure the visit creates a positive experience and that your leader and team sell the organization’s vision. Diligently uncover and address professional, educational, and personal interests of the candidate and his/her family so you can assess the cultural fit — for the physician, the organization, and the community.
- Go overboard with onboarding: Stay ready to quickly deploy multi-channel marketing using traditional methods and the latest digital and social media so you can attract active lookers and passive candidates. Make sure your compensation and benefits package stays competitive, and respond to candidates from first screening through signed contract.
- Accelerate filling vacancies: Don’t treat a physician vacancy as a one-off occurrence. Instead, adopt a continuous recruitment philosophy to keep the candidate pipeline full. Maintain relationships with candidates so that when you have a vacancy, you aren’t starting from scratch.
An investment in a tailored recruitment and retention process is the best way to avoid the high cost of hiring the wrong physician, Stajduhar said.
“Recruiting, hiring, and retaining a top-performing physician guarantees continuity of care, reimbursable revenue, patient satisfaction, and quality health care delivery,” he said. “By doing so, you earn the reputation as an effective organization with a healthy culture for both patients and their physicians.”
Jackson Physician Search, the nation’s fastest growing and most trusted physician firm recruitment, is an endorsed partner of Solvent Networks. To learn more about how they can help you anticipate and successfully fill physician vacancies, contact Liz Orjuela at lorjuela@jacksonphysiciansearch.com.
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