Short-Staffed: The Cost of Practice Vacancies
The challenge for medical practice managers facing a vacancy of physicians or advanced practitioners right now is arguably more difficult than the same battle faced by their counterparts with ties to larger healthcare delivery systems.
Major hospitals, regional medical facilities, networks comprised of multiple clinics, and practices employed by the like have more resources at their disposal when approaching this issue. Corporate healthcare hiring managers have more provider bandwidth in the event of turnover, more time to react, deeper pockets for prolonged searches, in-house recruiters at their disposal, and access to a number of other resources that are more applicable to an organization of their size.
In this two-part blog series we'll first discuss the causes and effects associated with being short-staffed from a purely financial standpoint, as well as share some resources available to help you combat this issue. Two weeks from now, we'll return to discuss the non-financial factors you should also keep in mind.
Turnover is Inevitable
Turnover is an inevitable occurrence in the healthcare industry. At some point, all practices will lose a provider, affecting many aspects of the business including the patient base that your remaining staff is left to care for.
Why would a physician or advanced practitioner leave your practice?
The opportunity for increased income is rising fast among reasons for movement. According to U.S. News & World Report's annual Best Jobs rankings (2017), the top 5 best-paying jobs out of our entire workforce are in healthcare. Healthcare jobs across the board not only take up the top spots on the list, they're everywhere – 52 of the 100 jobs listed are in the medical industry.
Rising debt is giving younger physicians and advanced practitioners more confidence in entertaining the higher salaries offered through a mindset of mobility.
In addition to the increased stress on practice retention caused by the realization of higher income opportunities by providers, other financial factors leading to turnover include declining reimbursements and the rising cost of medical liability insurance.
What costs are incurred by medical practices that suffer turnover?
Unfortunately only one in four medical groups actually quantify the cost of turnover. This could be a result of the fact that most resources available to healthcare administrators are usually geared towards larger employers and not smaller private practices. However, despite the difficult task, it's imperative for practices to develop cost metrics that are specific to their operation.
The first step is to calculate a practice's loss in revenue while short-staffed, because the data required to build this Key Performance Indicator (KPI) is already available internally.
The next step would be knowing your benchmarks of retention to aid you in avoiding high turnover to begin with, and recruiting metrics to help you rebound from a vacancy when the situation does occur. The longer a vacancy stays open, the more costly to your practice it will become.
It's been previously reported that prolonged vacancies beyond six months have an impact over a million dollars to the average practice.
Individual staffing and recruiting companies also regularly publish free information in the form of surveys, blogs, white papers, and even digital tools on their websites to help you calculate costs unique to your practice.
In addition, practices should consider offsetting the aforementioned financial impact by offering guaranteed income, loan repayment, and bonuses in order to stay competitive.
In two weeks we'll be back to approach practice turnover from the non-monetary perspective. There's an array of other factors that lead to being understaffed, including those causing provider burnout. These are arguably more difficult to track, but have just as much impact on a practice's ability to fully meet the needs of its patients.
Mike Gianas (Redemption Creative LLC) is a Dallas, Texas-based healthcare marketing consultant for the National Association of Locum Tenens Organizations® (NALTO®), the official governing body of locum tenens staffing whose purpose is to provide industry standards, ethical guidelines, continuing education and a collective forum focused on meeting the needs for care at medical facilities nationwide.