• The Business Case for Fighting Physician Burnout

    By Lola Butcher Apr 26, 2018

    Mitigating physician burnout may help to reduce turnover and the many costs—recruitment, training, and lost revenue during the transition—that come with it, and industry leaders are taking steps to quantify the ROI.

    In a Health Affairs blog post last year, the CEOs of 10 leading health systems called physician burnout a public health crisis. “The consequences of physician burnout are significant, and threaten our U.S. health care system, including patient safety, quality of care and health care costs,” the authors wrote.

    In the year since, physician burnout—defined as emotional exhaustion, depersonalization, and/or feelings of low achievement—has come to be seen as a problem that healthcare organizations must take responsibility for, rather than one to leave physicians to struggle with on their own. To date, more than 130 institutions, including Partners Healthcare System, Penn Medicine, and Aetna, have submitted “commitments” to the National Academy of Medicine’s (NAM’s) Action Collaborative on Clinician Well-Being and Resilience, summarizing how they intend to address burnout.

    The Collaborative is co-chaired by NAM President Victor Dzau; Darrell Kirch, MD, president and CEO of the Association of American Medical Colleges; and Thomas Masca, MD, CEO of the Accreditation Council for Graduate Medical Education. Its goal is to identify evidence-based solutions to America’s burnout crisis and monitor the implementation of the solutions across the industry. In a perspective article published in January, the three co-chairs signaled that fixing the burnout problem will not be quick and easy.

    “We already know that burnout is driven largely by external factors, rather than by personal characteristics,” they wrote. “These factors include work-process inefficiencies (such as cumbersome IT systems), excessive work hours and workloads, work-home conflicts, problems with the organizational culture (such as team dysfunction and management styles that neglect clinician input), and perceived loss of control and meaning at work.”

    The strategies listed in the organizational commitments vary widely—from formal assessments of burnout in an organization to workflow changes, from new compensation strategies to self-care training initiatives. All require investments both of hard dollars and of time and energy at the leadership and staff levels.

    Steven StrongwaterMaking those investments is not optional, says Steven Strongwater, MD (pictured at right), president and CEO of Atrius Health. He says reducing burnout is an essential step in addressing the shortage of healthcare providers.

    “When we fail to adequately address burnout, we are exacerbating that shortage because people tend to reduce their time, retire early, and leave the practice entirely,” he says. “It’s really a big problem, and I would argue that most people are not aware of it.”

    Costs of Physician Burnout

    Atrius Health is a not-for-profit outpatient provider organization with more than 900 physicians across some 50 specialties and 32 clinical locations in eastern Massachusetts. Its practices include Dedham Medical Associates, Granite Medical Group, Harvard Vanguard Medical Associates, and PMG Physician Associates.

    Based on Atrius Health’s experience, Strongwater estimates that replacing a physician who retires early or moves to another job can cost between $500,000 and $1 million, reflecting the expenses of recruitment, training, and lost revenue during the transition. The Health Affairs blog post makes the connection between physician burnout and those turnover costs. It reports that according to Mayo Clinic research, for every 1-point increase in a physician’s “burnout score,” as measured by a validated instrument, there is a 43 percent increase in likelihood that the physician will reduce clinical effort—defined as moving to part-time hours, quitting the job, or retiring early—within the next 24 months.

    Research presented at the first American Conference on Physician Health, held last fall in San Francisco, began fleshing out the costs of turnover by physicians who suffer from burnout.

    The annual cost attributable to physician burnout in the United States was estimated at $3.4 billion. Of that amount, 79 percent wasattributed to the cost that is generated when physicians leave the medical profession. (Han S., Shanafelt T., et al., “An Economic Evaluation of the Cost of Physician Burnout in the U.S.,” presentation at 2017 American Conference on Physician Health, San Francisco, Oct. 12-13, 2017.)

    At Stanford Health Care and Stanford Children’s Hospital, researchers considered two factors to project the financial toll: The institutional rate of physician burnout—26 percent in 2013—and the fact that 21 percent of physicians with burnout symptoms left Stanford in 2013, compared to 10 percent of those without burnout. Assuming those results can be generalized to Stanford’s 2,023 physician faculty members, the researchers calculated that the departure of 58 physicians over two years could be attributable to burnout. Estimated per-physician recruitment costs range from $268,000 to $957,000, depending on the specialty. Thus, the estimated two-year economic loss from physician departures attributable to burnout will be between $15.5 million and $55.5 million unless the burnout rate is mitigated. (Hamidi M., Boyman B., Sandborg C., et al., “The Economic Cost of Physician Turnout Attributable to Burnout,” presentation at 2017 American Conference on Physician Health, San Francisco, Oct. 12-13, 2017.)

    ROI of Reducing Burnout

    In recent years, research has shown that up to half of U.S. physicians exhibit at least one burnout symptom and that the rate of burnout among physicians increased by 9 percent between 2011 and 2014. 

    Despite those findings, most anti-burnout initiatives have focused on encouraging physicians to become more resilient through mindfulness, exercise, time management, or another self-improvement strategy, rather than on institution-level efforts to fundamentally change how physicians work.

    “Everyone agrees this is a problem, but not that much has been done structurally to deal with this issue of burnout,” says Joel Goh, PhD, visiting scholar at Harvard Business School and President’s Assistant Professor in the department of analytics and operations at National University of Singapore Business School.

    In a recent article, Tait Shanafelt, MD, director of Stanford Medicine’s WellMD Center, Christine Sinsky, MD, vice president-professional satisfaction for the American Medical Association, and Goh hypothesize that the approach reflects two problems:

    • Lack of awareness of the economic costs of physician burnout
    • Uncertainty about whether anything can be done about the problem or how much money should be invested in a solution

    The authors point out that investing in system-level interventions to address burnout makes good business sense and that “even modest investments can make a difference.”

    They offer an approach to projecting the annual cost of burnout-related physician turnover for an organization and a way to determine the ROI of investing in anti-burnout interventions that reduce turnover (click on the exhibits below).

    Worksheet 1: Project Organizational Cost of Physician Burnout

    Physician Burnout_Exhibit 1_Projecting Costs

    Worksheet 2: Determine ROI Resulting From Intervention to Reduce Physician Burnout

    Physician Burnout_Exhibit 2_Determining ROI of Intervention

    They demonstrate their formulas using the hypothetical example of an organization with 450 employed physicians, a physician burnout rate of 50 percent, an annual turnover rate of 7.5 percent, and typical replacement costs of $500,000 per physician, adding up to $16.9 million a year in turnover-associated costs. If the organization spent $1 million a year on an intervention that reduced the prevalence of burnout to 40 percent, turnover could be expected to decrease by 0.5 percent. The associated organizational cost savings: $1.125 million per year, for an ROI of 12.5 percent.

    The actual ROI would likely be greater, Goh says, because the ROI formula does not account for increased physician productivity or the financial consequences of the improved patient satisfaction and quality of care that are likely to come with reduced physician burnout. But he hopes the formula will help provider organizations recognize the benefits of addressing physician burnout as a financial improvement strategy.

    “We don’t expect this should be the total calculation, but I think it can get help get leadership on board,” he says.


    Lola Butcher writes about healthcare business and policy topics for several HFMA publications.

    Interviewed for this article:

    Joel Goh, PhD, assistant professor, NUS Business School, Singapore; Steven Strongwater, MD, president and CEO, Atrius Health, Newton, Mass.

ADVERTISEMENTS