The Real Cost of Physician Recruitment and Poor Ramp Up Execution
The easy part is adding up the direct costs related to hiring a new physician. This will most likely include recruitment advertising, marketing, exhibiting, search firm fees, travel, entertainment etc. By most accounts, the average direct cost of recruiting a new physician is somewhere in the ballpark of $35,000 per hire. Sounds reasonable, right?
Now let’s dig a little deeper into the costs incurred after the candidate accepts your offer and the contract is signed. These would include in-house counsel time, relocation fees, signing bonuses, student loan forgiveness, a one or two year income guarantee, and maybe even a position for a spouse or partner. We are talking about $100,000 - $200,000 or more just to get them in the door.
But wait, it gets better. What about the time it took to backfill the position? MGMA pegs the lost revenue from the time a physician resigns to when the position is filled to be in the neighborhood of $1.4 million. Yep. That’s per physician.
The staggering number comes next. It can take an average of 18 to 24 months for the new provider to ramp up to their productivity goals. That means it is taking up to two years for the new hire to start producing at the rate of the departed physician. Um, carry the one…let’s say for the purpose of this article, it’s a lot of money.
More often, there is a loose collection of tactics in place for onboarding a physician. This likely includes lots of hand-offs, spotty communication, little oversight and a less than ideal welcome to your new organization and culture. Further, this process is usually exactly the same for the seasoned high-end specialist and the young primary care recruit. For something as important as each new hire to the health system, the lack of focus after day one is head scratching.
Take back the process. Bring some organization and accountability to your system.
Start by creating a business plan for each new hire’s next 24 months. It should include financial or productivity goals, a structured onboarding plan, operational intelligence, competitive analysis, marketing (consumer and physician-to-physician), data mining, referral targeting and monthly reporting at all levels. At this point, you now have consistent “red carpet” process for each new hire. The physician will certainly be thrilled that their new employer is committed to building their business. This process may even help the new physician meet their incentive bonus. The lasting benefits include an engaged physician hire, a single playbook for 24 months, a tracking mechanism, increased retention and, most importantly, a way to accelerate revenue and ease the financial burden of a slow ramp up.
About SystemCare Health
< Go Back
SystemCare Health is leading the way in physician productivity strategies offering strategic ramp up services, effective onboarding planning, business building, strategic physician relations, referral development and ROI measurement. Clients include: Geisinger, Valley Health (VA), Hackensack Meridian Health, UHS, Vanderbilt Health, Guthrie Health and MedStar Health.