Welcome to the Healthcare CEO podcast. Join us as Daniel Fernandez, healthcare leader and patient experience advocate leads dynamic one-on-one discussions with healthcare executives, consultants, and other industry experts. Listen in as they share actionable insights and unique perspectives into the day in the life of a healthcare CEO.
*The following has been adapted from our full-length interview, which can be found here.
Meet Tony Stajduhar
Tony is the President of Jackson Physician Search, a company that, since 1978, has helped recruit and place thousands of physicians nationwide. Today, we’ll discuss the results of a recent study they conducted on the physician turnover epidemic.
The Costs of Recruiting New Physicians
DF: Welcome to the show, Tony! Let’s talk about this study. What prompted it?
TS: As we meet with clients and hear from them daily about their needs and what they’re looking for in the future, it’s always the acute needs that they have, but in most cases, it’s to replace somebody. It could be a physician who’s been there short-term, or it could be someone who’s retiring. So we started questioning, what is the concept around this? What could we do to help people in hospitals and medical groups understand so they can cut down on their number of recruits? If we can cut down on attrition, maybe it would make sense for them.
We decided to talk with physicians, to people on the other side, hear what they’re both saying; see if we can come up with some solutions — or identify some problems.
DF: In the study, you noted that the average recruitment cost can add up to about $250,000 — with lost revenue potentially exceeding over a million dollars. Not to mention all the time and effort involved in the recruitment process. With that in mind, do you believe that there should be more of an emphasis placed around retention programs?
TS: Absolutely. We have seen over the years some practices that do these things very well. And those that do typically have physicians stay longer, better productivity, better patient satisfaction, and so on. All of these things add up to a tremendous loss in revenue if they don’t have these things in place.
It also helps give a voice to physicians. In their mind, they think that if there’s a retention program and they’re brought into that, that they have a voice in how the practice might be run, or how the distribution of care might come across. These are things that are really important. And physicians want to feel like they are part of an organization — they don’t want to feel like just a provider.
Addressing Physician Turnover Rates
DF: Since we’re on the topic of recruitment and retention, what is the average annual physician turnover rate?
TS: Over the last 30 years, it’s been like clockwork. It’s usually somewhere between 6% and 7%. It’s usually closer to six, but every once in a while it will creep up to seven. It’s pretty consistent. That means it’s over 50,000 physicians a year are relocating.
DF: The last year has been a trying time for all of us. Do you think that number will potentially increase or decrease because of this COVID pandemic?
TS: That’s a great question. I don’t think you’ll see those things move as much as you might think. You would think that under the circumstances, it would; but it would take a lot of physicians to really move that dial up to eight percent. And what you’re seeing right now is a little bit unusual. Probably in about the last six months or so, it’s one of the first times I’ve ever noticed that there have been more physicians than positions to be filled. So everything kind of shut down on the hospital side, and on the practice side, in terms of recruitment — just because there are no elective surgeries going on, money was tight — so physicians and hospitals were cutting back. There were physicians left saying, I need a position. I need to make a move, but there weren’t enough positions.
So I told people about six months ago, enjoy this because this has never happened in history and it will probably never happen again. Now we’re already seeing at the beginning of the year that things are opening up again, people are getting back on their medical staff planning, and so forth. Things that they had to set aside for a little bit during the pandemic.
It remains to be seen how things go between now and the end of the year, but there’s that optimism that people are starting to recruit again and get back on their plans.
Combining Skill With a Cultural Fit
DF: One of the things I love about the study you conducted is that there are tons and tons of data. For organizations looking to recruit, should they hire for clinical acumen or for a cultural fit, or maybe a combination of both?
TS: Yes, a combination of both. You gotta remember, physicians — for the most part — are scientists. They’re very good with that part of their brain, and they’re also very good about wanting to help people. So being able to find those people is not as big of a deal as a cultural fit. Sometimes there are certain specialties where your personality and your style, and the culture you fit into really don’t matter that much. If you’re sitting behind a screen and reading tests, it’s not such a big deal. But every time you’re patient-facing, you need to have some bedside manner.
You need to be able to make the patient feel comfortable — that they’re getting good care and working with somebody who actually cares about them. So those things are all important. And also, try to find people who can fit into — if you’ve built a good culture — you want to bring in people who can fit into that. Because the last thing you need, no matter how good a physician, is to find someone who will be disruptive of that culture. It’s hard to build a good culture and you don’t want to mess it up just because you need a physician.
It’s a good mix. But that’s why you do interviews. You can do initial interviews over the internet and then follow up face-to-face and see how it feels; how they feel about you and vice versa. So yes, it has to be a good culture fit, but you still also have to find a good physician.
The Harm of Sink or Swim Cultures
DF: This is one of the stats that stood out to me. 32% of respondents noted that there was no form of orientation program in place. Does that mean that organizations are essentially failing from the start?
TS: I would say — without trying to make it too dramatic — the answer to that on some level is yes. Let me give you an example of a group we do a ton of work with in Georgia. We recently talked about things, and even though we’ve been working with them for a while, we hadn’t talked this in-depth about some of the things they do when a physician starts. This is a doctor (not even a PA), who’s coming in, and it takes about two weeks to get them up to speed on EMR, getting them up to speed on culture, and things like that. Then they start shadowing some other physicians to see how they work with patients and how their relationship is with their PAs, etc. And then another two weeks of telling them what they’ll be doing next, then going over it with a physician who will be monitoring the new doctor. So they’re taking about six to eight weeks with a doctor to whom they’re paying a lot of money, where it’s bringing them almost nothing. But they believe that by doing that, it will get them up to speed much quicker. It also makes them feel like they care enough to put that much time and investment into them to be able to ultimately produce.
That really opened my eyes to say: They have this figured out. They’re doing a good job. And I have to say, their retention of physicians is outstanding. It’s really, really good. But then you hear comments in the study that we did, where a physician will say “They said, here are the keys, good luck, God bless you, and let’s go get ‘em!” So that doesn’t give you a lot of sense of security coming into a company.
Even with us, I can’t imagine bringing employees in and doing no orientation. Yet it happens all the time.
DF: When you really think about it, the $250,000 recruitment cost, and to do it properly (in six to eight weeks), it seems like there really should be an emphasis on retention. What are some of the ways that organizations can further engage with their physicians?
TS: In the study, you probably read that there are a lot of practices that have a retention program. Yet, when you speak with physicians on the other side, many of them don’t realize that there’s a retention program. So one of the things you have to do if you really want to have one that makes sense, is to build a program and ask yourself, what’s my goal, my end game? And go backwards and build what you’re trying to accomplish. When you’re doing that, you have to really make it public. You have to get physicians involved. Ideally, you bring physicians in and make them part of that planning. And then you have meetings to follow up about these things and make people aware of what’s in place to show them that you care about them and about them staying, and their livelihood, and how they’re feeling, and how they’re doing. These are all things that are really important. And the saddest part to me is that as many programs as there really are in place, if your physicians don’t know, it’s useless.
So how do you fix that? Do you trash it and try to do it again from scratch? There are probably 10 different ways you could go about doing it. But at the end of the day, if you don’t get your physicians involved, it’s not going to do you a lot of good.
Adding the COVID-19 Pandemic to the Mix
DF: And then you add to that that over the last year, we’ve had to deal with this global pandemic — which can ultimately lead to physician burnout. Do you think the pandemic will cause a mind shift in the physician community?
TS: Yes. It’s definitely caused a tremendous amount of angst. It’s caused it in the general population. I look at our own organization, and we have 1,200 to 1,400 people on our campus, and we’re running with maybe a 30% crew and trying to be safe. So it’s in front of mind right now. It’s affecting all of us. We love having this beautiful campus and enjoy the things that have made us all successful, but you do what you have to do. That’s just coming to work and dealing with your coworkers every day. We don’t have to come to work and deal with people on ventilators, people dying, and seeing people carted out every day on gurneys to go to a makeshift morgue. So these are things that, if you think about what they’ve been doing over the last 12 months now, many of them are in a position where every day they see deathly sick people, the hospital’s full, and a lot of them are dying. Then they go home at the end of their shift — in many cases, they go to empty homes because they don’t want to stay with their families and take the chances of passing COVID on to them. So they’re lonely. They sit there and they think about their crappy day that they had, then they go back to start it all over again the next day. And just a couple of days like that would be one thing, but when you go months like that, even when things start getting better, the angst and the things put upon you all the time leave you flinching, thinking, can I get through another day of doing this? So yes. Burnout, PTSD, — whatever you want to call it — it’s real right now.
However, I say all that, but I don’t know that it’s going to dramatically change physician movement. I think you’ve seen things over the years — 9/11, recessions, the ACA — all the things that have happened, it always emits an emotion from people and from physicians, and they have comments and feelings, but it usually ends up at some point in time subsiding. And they think, I’m still a doctor. I threatened that I’m going to leave the practice of medicine, but in reality, what am I going to do? I trained 30 years to do this and now I’ve been doing it most of my life. What am I going to do next?
Usually, they will come back around. But, I will say, the effect will have a mental impact on them. Maybe not so much to change the patterns of relocation to a great extent, but this is something you can put into a retention program — mental health, and how you help physicians through this when they need it. Give them an outlet to go to and seek help.
Prioritizing Physicians’ Mental Health
DF: You just keyed in on something that I think is very important, especially with the number just surpassing 500,000 deaths nationwide. It’s an alarming statistic. And mental health is a big aspect of that. They’re frontline workers having to deal with death.
TS: Yes. And I don’t know if you got the opportunity to look at the interviews we did on our website with physicians of different specialties in different parts of the country. From the epicenter in Georgia to the Chief Medical Officer and CEO of Cedars Sinai Medical Group, who at the time wasn’t really too nervous because things were under control back then. But things then sparked up. And they were still worried even then that what happened could happen. And then, from a place in Idaho, where a doctor said they had virtually no COVID cases at the time, and then Idaho becomes a hotspot. So even those physicians who weren’t hot at the time, you listen to them and what they were dealing with, and their fear and trepidation stood out. It was very noticeable how they felt.
The Realities of a Nationwide Physician Shortage
DF: What does the demand for physicians look like today? Will the supply keep up with the demand?
TS: The supply and demand — since ‘86 — has just continued to get out of whack. If you think about it, it’s really simple. The population growth has continued to get bigger and bigger. Even with the pandemic, it’s still growing, and populations will continue to grow. So you think about that, and until the last month or so, there really hasn’t been an increase in residency programs. Even when medical schools were added, there really wasn’t an increase in residency programs per se. A residency program here and there in some specialties isn’t going to really make that big of a difference. There needs to be a significant change. And that’s not gonna happen overnight. And while those things are in place to try and build those programs, the population’s going to keep getting bigger and the doctor pool is not gonna get any much bigger.
And then you still have physicians who are retiring at a bigger rate all the time. So the pool keeps going down and the population keeps growing. So, literally, I think that in the next 10 to 15 years, statistically, there’s going to be a shortage of well over 100,000 physicians. I don’t know how you ever make that up.
I don’t see you will ever catch up. I think it’s mathematically impossible to ever catch up. So there will always be a bigger need than there are physicians. And then you deal with the subsets of that. For example, 20% of the country is rural, yet only 10% of physicians work in rural areas. So it’s kind of counterintuitive. So there are a lot of things going on there.
DF: And you’ve got Boomers retiring at an average of 10,000 per day, so that’s obviously not helping either. It’s an increasingly aging population.
TS: Absolutely.
DF: In terms of the impending deficit, are there programs in place to keep the older physicians from retiring — keep them practicing longer?
TS: Yes. Trying to give them some incentive to stay longer. And one of the things the pandemic brought up is that people who were near to retiring or had already retired, they started coming back to help. That’s what doctors do. They’re there to help people. When you reach out to doctors, sometimes we’re reaching out to say, hey, can you help us? Do you know anyone who might be a good fit? And when they see there’s a shortage, you see them jumping back in. Doctors, nurses. You hear incredible stories of nurses doing the same thing. So the pandemic has really brought some of that into play.
Our last study that we did on attrition and on physician retirement, that was another thing where there was a big disconnect between what administrators felt and what doctors felt. We talked to physicians, and one thing that was clear was that when you as a physician: “Hey, when you retire, what are you looking forward to doing?” And it was not playing golf every day or going for hikes. It was more like, “Well, I don’t know. Maybe I’ll still want to practice medicine. Maybe I’ll do some temporary staffing work,” or things like that. And when I talk to administrators, I ask them for ways to embrace that, ‘cause you’re going to have needs within your own community. So let’s build something with those physicians who are still perfectly capable of working, they just don’t want to do it full-time anymore. They want to slow down a little bit. I think there could be great plans around that. But there is clearly a disconnect. That paper’s on our website as well.
Fostering Long-Term Relationships in the Workplace
DF: From your study, what do you think is the biggest takeaway that our listeners should key in on?
TS: There’s an old saying. In life in general, keeping a good client or keeping good employees is much less expensive than having to go out and replace them. It’s cheaper to keep them. That’s kind of the mindset to get in. Once you get somebody involved in your organization, your goal ultimately should be for every single person to stay with you until they’re ready to retire. That’s the end game. You should look at it like a marriage. People don’t generally get married with the idea that they’ll end up divorced in 10 or 15 years. How do you find those physicians who have a real need to stay in your practice, where it’s a good fit, and the physician can practice great medicine and feel a part of the practice.
If you can accomplish those things, your odds of retaining those people is so much better, and you don’t run the risk of losing all that revenue. It doesn’t just hurt from a revenue standpoint. As a hospital administrator, as a group administrator, you’re very concerned about your patients as well. Your patients come first. Physicians second. Maybe 1A and 1B. But at the end of the day, physicians leaving doesn’t only affect your top line or your bottom line. It also affects your patients, who are what you’re all about.
There are plenty of reasons to have a retention program. But you gotta start by making it known. Letting physicians come in and know what the plan is going to be, and letting them know if there’s ever any problem, what they can do and where they can go to try to remedy those problems. This will make your practice much more lucrative, profitable, and great for your patients.
Words of Wisdom
DF: Tony, I want to genuinely thank you for those valuable insights. In closing, I’ve got a few questions I ask all of our guests. What’s your favorite book that you would recommend?
TS: That is a really good question. Especially because of this topic, Shane Jackson’s Fostering Culture. It’s extremely insightful. It’s not a tremendously long read, but it really helps put in perspective things he and his father have put into practice in the decades they’ve been in the industry. That’s a really good read for people who are interested in this topic.
DF: Jackson has won so many culture awards. Do you have a favorite quote?
TS: “If you take care of your people, your clients will always be happy.” I had the opportunity to meet Richard Branson, and I think he was ahead of his time, and that’s probably his favorite quote.
DF: What has the last year taught you, personally?
TS: Just to, more than anything, live life that’s in front of you. Take care of the things that are important. For me, first is family, then there’s my extended family — my employees. We’ve tried to build this in a way that we want everyone to feel like this is one big family at Jackson Physician Search, and I think overall, we do a good job of it. And when you do something that maybe isn’t right, let people know how much you care about them, every day. And don’t let little things get in the way of your relationships. Take every moment and try to make it the best you can. In reality, what we’ve seen — half a million deaths — it really brings into perspective that you could really be gone tomorrow. How do you want to leave those relationships? How do you want to be remembered?
DF: Final closing thought. What would you like our listeners to know? Any advice you’d like to share?
TS: It’s important to continue recruiting. I would probably try to urge people — when you’re doing medical staff plans — to say this is what we need now based on the community and physician mix that we have. However, they almost always forget about attrition. And when you think about physician’s retiring or leaving for one reason or another, those things always come along. So build in plans to recruit for the future as well, not just what you need today or what you needed yesterday. Think a little bit further ahead. Take advantage of this knowledge and this information to prepare yourself to say, “I won’t have to long-term recruit so many people, because I’m gonna get people to get here and want to stay here.” And set some type of goals. That’s the attitude medical groups and hospitals should have. And if they do, they’re going to eliminate the need for a lot of recruitment in the future.
Learn More about How Tony Stajduhar and Other Healthcare Leaders Are Shaping the Future of Healthcare
Watch the full interview with Tony Stajduhar, and be sure to subscribe so that you don’t miss future shows where we interview other industry-leading healthcare CEOs and executives as they look to shape the future of healthcare.