Managing Staff: You Got 'Em, Now Keep 'Em

As vice president of a leading Pennsylvania healthcare group, Marc Greenwald watched helplessly as the growing rate of physician turnover dealt a crippling blow to his practice’s bottom line.

By conservative estimates, each departure cost the practice several hundred thousand dollars in lost revenue and new recruiting fees - to say nothing of the toll on patient loyalty and staff morale.

“Through our exit interviews, I realized many physicians left for reasons the people on top may not have known,” Greenwald says. “They were unhappy, and there may have been things we could have done to prevent it.”

Now chief medical officer for Fallon Clinic in Worcester, Mass., a multi-specialty group practice with 240 physicians, Greenwald has drawn from the lessons learned at his former post to create one of the most proactive physician retention programs in the country.

Highlights include an in-depth orientation for new docs, shadowing programs, specialty coaches, and risk management workshops. With the full backing of the board, the practice is also now developing “enculturation” tools for the families of new recruits.

So far so good. Since the program was implemented in 2004, Fallon Clinic has lost just one physician to voluntary resignation - a doctor who pursued a fellowship.

“It’s been successful,” Greenwald says. “Our program has only been in place a short time, but our turnover rate is already much better than it used to be, and, more important, the feedback we’re getting from participants tells us that it’s been very valuable in terms of helping them become part of our clinic culture.”

Few of today’s practices have implemented retention strategies as comprehensive as those of Fallon Clinic. But evidence suggests that may be changing.

A just-released 2005 survey by physician recruiter Cejka Search of St. Louis and the American Medical Group Association (AMGA) found that 58 percent of medical groups have a designated physician retention initiative in place - up from 48 percent last year. Another 90 percent of practices use some sort of methodology to track turnover resulting from voluntary departure, involuntary departure, or retirement - a 23 percent increase over practices measuring this data in 2004.

“This is clearly a big issue because there aren’t enough physician candidates out there to meet the needs of practices,” says Cejka Search president Carol Westfall. “Practices that maybe historically would not have paid attention to retention are now recognizing that when a physician leaves a group it’s more difficult to replace them. There’s concern over how long it will take, how much they will spend on recruiting and their lost productivity from the staff doing the interviews.”

Indeed, retaining top talent in today’s competitive market ranks high among the leading concerns of small practices and larger medical groups alike.

The Cejka/AMGA 2005 Physician Retention Survey, which analyzed feedback from 95 AMGA-member medical groups nationwide, found that some 47 percent of medical groups reported “significant concern” about physician turnover. More than a third (36 percent) said turnover ranked within their top three critical issues.

Why they leave

For any practice looking to keep their best and brightest on board, it helps to explore the most common reasons for voluntary resignation.

Ken Hertz, senior consultant for the Medical Group Management Association who is authoring a book on retention strategies, notes that doctors often leave practices because of broken promises. Partnerships that never happen, bonus programs that fail to materialize, and lower-than-expected patient volume quickly fuel physician dissent.

“In the recruiting process, they are told the practice is working on a bonus program and it’s not in place yet, but they’re really going to like it,” Hertz says. “So they start under contract without anything in place and it never comes through. Eventually, they’re going to leave.”

Greenwald notes that a lack of shared vision is another common catalyst for turnover. “When it comes down to it, one of the biggest problems [in high-turnover practices] is a lack of shared mutual expectations,” he says. “You could interview a brilliant physician, one of the best in the field, and if that physician was academically oriented it is doomed to failure. There’s nothing wrong with that, of course, but if you need someone who is entrepreneurial in spirit and motivated to see patients effectively it’s not going to be a fit with your organization.”

Indeed, among all group sizes, “practice issues” were cited by physicians as the leading cause (44 percent) of resignations, according to the Physician Retention Survey. Those issues include doctors experiencing a poor cultural fit and work pressures not fitting with their lifestyles.

Compensation was the second most common reason practices cited for losing their top talent, and this is a bigger issue for smaller offices. Among small groups with fewer than 50 physicians, 27 percent of practices reported compensation as the biggest reason for turnover, compared with 13 percent of practices with 500 or more doctors.

Spouses, too, wield a mighty influence over workplace longevity. Doctors are frequently recruited from out of state, forcing their families to adopt a new hometown. Needless to say, those who feel alienated don’t stay long. Westfall says practices too often underestimate the importance of bringing the family into the fold.

“The physician could be very happy in [her] new job, but if [her] spouse or family hasn’t assimilated into the community or established a social life there they can get unhappy pretty fast,” she says.

Is the crisis now?

By many accounts, job dissatisfaction among physicians is at an all-time high.

Mike Carrigan, medical director for Premier Medical Group in Clarksville, Tenn., a physician-owned practice with 33 staff physicians, and the author of numerous articles on the subject, notes that doctors today are disillusioned by the influence of managed care, malpractice concerns, challenges to their professional status, and changes in the doctor-patient relationship. The ramifications, he notes, are equally troubling. They include burnout and depression, overt anger, decreased professional and life fulfillment, decreased clinical quality, and increased healthcare costs.

It’s no wonder the Physician Retention Survey reports an average annual turnover rate of 6.4 percent.

“Currently there is a burgeoning crisis of ebbing satisfaction in our profession with multiple causes and serious consequences,” Carrigan writes in a recent article. “Improving physician satisfaction must be viewed by leadership of healthcare organizations as a priority and managed in an integrated manner with other corporate assets.”

So how do you know if your physicians are happy? You ask.

A number of practices, including Premier Medical Group, conduct annual staff surveys to uncover morale problems early on and gather input on ways to improve relationships among physicians, support staff, and management.

“We decided not to take physician dissatisfaction for granted, but to proactively cultivate professional satisfaction,” Carrigan says, noting that feedback from the surveys not only helped his group spearhead new retention strategies, but also helped enhance job satisfaction among its physicians. New policies implemented as a result of survey feedback include regular dialogue between management and staff, open shareholder meetings, and a major shift in the group’s salary structure in which it moved to a formula based on individual income rather than production.

On a scale of one to 10, in which 10 indicates the “most satisfied,” professional satisfaction within the group jumped from 6.6 in 2001 (the first year the survey was conducted) to 8.4 in 2005. In addition, newly implemented exit interviews now provide the group’s management a rare opportunity to hear first-hand from doctors on the front lines of their practice. During these interviews, experts say to ask about morale concerns, pay scales, benefit packages, and opportunities for improvement. And expect candor. Those who are leaving have nothing to lose.

Plan for longevity

Beyond competitive pay - a given tool in today’s market - the most effective weapon in any group’s arsenal of retention tools are those that cultivate physician loyalty. Studies show it’s important to get doctors emotionally invested in their practices early on.

According to the 2005 Physician Retention Survey, the majority of physician departures (60 percent) occurred within the first five years of joining a medical group. Forty-seven percent occurred within the first three years.

Practices should always provide orientation programs to acquaint new physicians with office policies, key employees, and procedures. Throughout their tenure, physicians should also be paired with a mentor, ideally within their specialty, who can answer basic questions and act as a sounding board for their concerns.

At the same time, Hertz says all staff physicians should be encouraged to join committees within the practice and extracurricular groups around town. The same goes for spouses and kids. Providing opportunities to integrate the doctor’s family, through sports teams, school activities, volunteer organizations, and dinners hosted by other families in the practice, helps ensure longevity.

“In a clinical setting, a mentor is clearly necessary to help the physician understand the culture quickly,” Hertz says. “There has to be a plan laid out with some sense of longevity, and you have to make a special effort to bring the spouse and family into the community, too. It’s all about how helpful the hospital or practice is to the doctor and their families.”

Like most retention consultants, Hertz also supports the notion of physician compacts, a written document that spells out what the practice expects to give and receive - and what the doctor should expect in return.

“We’re not talking about contractual issues here. We’re talking about your vision,” says Hertz. “If your vision is to grow the practice, that has to be consistent with any new physicians you hire. If it’s not, the doctor is going to leave. Practices think this is not important, but when you get married, it’s fundamental to talk about whether you are going to have kids. Vision, value, and mission are those fundamentals for a medical practice.”

Communication breeds retention. That means getting doctors together with leadership on a regular basis to discuss major board decisions and actively seek input and ideas for future discussion.

Hertz says management must also communicate “eyeball-to-eyeball” with new recruits. “No e-mail and no memos,” he says. “Sit down with the doctor after the first month and ask him, ‘How is it for you? Are we meeting your expectations? How can we do that if we’re not?’”

After that, hold regular meetings to discuss professional goals and plans for the practice - quarterly at first, and then annually. For its part, Premier Medical Group arranges for physicians to meet one-on-one at least once a year with its president, chief executive, and medical director for open discussions.

Leadership also began providing more in-depth performance data at its quarterly meetings, including financial information. “I believe that has given our physicians a greater feeling of ownership in the group,” Carrigan says. “They really feel like they make a difference in the group and they feel like the group appreciates it. At the end of the day, that’s what’s going to help build loyalty.”

What to avoid

Generally speaking, retention strategies centered on compensation alone fail to deliver. Anecdotal evidence suggests that doctors who are paid less than their peers don’t stay long, but paying them the same or slightly more than their competitors doesn’t necessarily provide enough incentive to stay.

According to Westfall, more important are a practice’s intangible benefits. Workplace camaraderie, integration within the community, and a feeling of professional contribution rank high on the list, she says.

But for all their best intentions, mentoring programs can also be a double-edged sword. The 2005 Physician Retention Survey reveals that such programs are only effective when formal mentors are assigned and when those mentors follow through on their commitments.

Hertz says physicians often feel like they’ve fallen off a cliff once their mentoring program has ended after the first few months. For best results, practices should provide formal mentors for at least three to five years.

Fight for what’s yours

It’s no secret that doctors today are courted heavily by practices across the country, particularly in certain specialties. That goes double for the most highly valued physicians. So don’t be surprised if your competitors approach those doctors with better offers. But do be prepared.

Westfall says management should stay abreast of average salaries for each specialty within its practice. (The MGMA is one source for this data.) If your pay falls short of that of your competition, it’s time to revisit compensation.

Beyond that, when fighting to keep a physician from jumping ship, it’s all about playing up your assets.

“Talk about the long-term benefits of your organization, not only what your compensation looks like today, but what your plans are for the future and what your vision is for that employee’s role within the organization,” Westfall advises. “It’s important for leadership to be verbally expressing to staff physicians: ‘We don’t want you to leave.’”

At the end of the day, some turnover due to retirement and resignation is inevitable. Physicians are simply more mobile today than they were in the past. But effective mentoring, better communication, and basic retention tools, like physician compacts and annual surveys, can help keep the staff you have happy - and keep the revolving door under control.

“It is costly and disruptive when groups have to recruit new physicians,” Hertz affirms. “The better job we can do at retaining the doctors we have, the better off we’ll be.”

Shelly K. Schwartz, is a freelance writer in Maplewood, N.J., who has covered personal finance, technology, and healthcare for 12 years. Her work has appeared on CNN/Money.com, Bankrate.com, and Healthy Family magazine. She can be reached via editor@physicianspractice.com.

This article originally appeared in the May 2006 issue of Physicians Practice.