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From Turnover to Retention: Navigating the Complexities of Medical Group Staffing

Key Takeaways:

  • New Premier data shows the total cost to a health system of a single departing provider averages $750,000 to $1.8M, depending on the specialty.
  • Clinical and patient access support staff wages have increased as much as 25 percent since 2021. Registered nurses (RNs) now average more than $40 per hour across the country.
  • By leveraging innovative data and benchmarking capabilities as well as following best practices for retention, medical groups can develop solutions that reduce turnover, control costs and cultivate a resilient workforce that can meet patient needs.

In our previous post, Provider Turnover Trends Across Medical Groups, we explored the high turnover rates among physicians and advanced practice providers (APPs) based on insights from Premier’s Provider Practice Benchmarking data. The findings were stark: one in every five providers across U.S. medical groups has been newly hired over the past two years. The data also uncovered notable differences between specialties, with turnover rates and divestment trends varying widely.

Building on these insights, below we delve further into the financial ramifications of turnover, examine non-clinical staffing trends and discuss practical strategies for recruitment and retention that can help medical groups navigate these ongoing challenges.

The True Cost of Provider Turnover

While turnover rates remain a significant operational challenge for medical groups, the financial impact is equally daunting. For medical group leaders, understanding the full cost of provider turnover is essential. Beyond recruiting and onboarding, turnover costs can cast ripple effects on practices and the broader health system.

For example, a Premier data analysis from June 2024 shows that the cost of losing a single physician in high-demand specialties like orthopedics can reach on average approximately $1.8 million.1

This cost includes not only recruitment expenses, but also lost revenue, decreased productivity and a negative impact on the health system's referrals and ancillary services. Even in less costly specialties, such as pediatrics, the turnover cost is still on average a substantial $750,000 per provider.

These numbers highlight the importance of making retention a priority across the board, as it is often less costly to keep existing providers than to replace them.

Non-Clinical Staffing: A Growing Concern

Physicians and APPs aren't the only staffing challenges facing medical groups. Clinical support staff, such as registered nurses (RNs), licensed practical nurses (LPNs) and medical assistants (MAs), as well as patient access staff like receptionists and schedulers, are also essential to ensuring a smooth workflow and high-quality patient care.

Premier's data reveals that staffing levels for clinical support roles have been increasing relative to provider full-time equivalents (FTEs), though they have remained relatively flat when measured by volume (work RVUs).2 This suggests that providers are handling higher workloads post-COVID-19, and medical groups need to closely monitor staffing needs based on volume, not just the number of FTEs.

Notably, patient access staff levels have decreased, pointing to a potential trend toward efficiency in scheduling and intake processes. However, this requires further study to confirm if this trend reflects true efficiency gains or a growing need for more support.

Labor Cost and Skill Mix: Understanding the Trends

Another pressing concern for medical groups is the rising labor cost for support staff. Since 2021, wages for clinical and patient access staff have increased by as much as 25 percent, with RNs now averaging over $40 per hour, LPNs around $27 and MAs at $22.2 These wage increases, driven by inflation and market demands, are adding pressure to medical groups’ operational budgets.

Despite these cost increases, Premier data indicates that medical groups are not shifting their skill mix toward lower-cost roles. In fact, the trend seems to lean toward employing more higher-cost RNs, further elevating expenses. Understanding why this shift is happening requires additional research, but it shows the importance of carefully managing staffing decisions to control costs without sacrificing care quality.

Leveraging Benchmarking and Data to Develop Strong Retention and Recruitment Programs

Given the steep costs associated with turnover, the best defense for medical groups is a well-rounded retention and recruitment strategy. It's critical to develop programs that not only focus on recruiting new talent but also emphasize retention to prevent costly turnover.

Medical groups can start by addressing key areas such as burnout, which remains one of the leading causes of provider and staff attrition. Creating a culture where burnout is proactively addressed and offering professional development opportunities can go a long way to improving staff satisfaction.

A strong retention and recruiting program should also include regular evaluation of compensation levels to ensure they remain competitive. Additionally, fostering a culture of open communication and feedback and involving front-line staff in decision-making processes can help create an environment where providers and staff feel valued and heard.

To make retention and recruitment efforts truly effective, data is essential. Premier’s Provider Practice Benchmarking solution, which collects and processes data from over 60,000 physicians and APPs working in over 8,000 practices nationwide, provides medical groups with the insights they need. By analyzing billing, scheduling, payroll and financial data, Premier’s platform helps organizations to identify gaps, inefficiencies and opportunities in real time.

Premier’s consulting team takes this a step further by working hand-in-hand with healthcare organizations to interpret the data and turn it into actionable strategies. With access to dashboards and analytics, healthcare leaders can collaborate with Premier’s experts to design customized retention and recruitment solutions that align with their organization’s specific needs. Whether it’s developing compensation models, optimizing workforce productivity or enhancing employee engagement, Premier’s consulting team brings a wealth of expertise to help ensure that the data is fully leveraged to create meaningful impact.

Here’s a quick checklist of indicators that your retention and recruitment program is on the right track:

  • Does your medical group actively address burnout?
  • Are there clear professional development paths for staff?
  • Is compensation reviewed regularly to keep up with market trends?
  • Do staff members feel they can give feedback and engage in open conversations with leadership?
  • Is your health system actively involved in retention strategies?

Final Thoughts

Medical group staffing challenges go far beyond physician and APP turnover. The costs of replacing providers, the wage pressures on support staff and the evolving dynamics of recruitment and retention all require a strategic approach. By leveraging data from Premier's Provider Practice Benchmarking solution and following best practices for retention, medical groups can develop solutions designed to reduce turnover, control costs and cultivate a resilient workforce that can meet patient needs.

Learn More:

  • For more information about Premier and our practice benchmarking solutions, contact solutioncenter@premierinc.com.

Footnotes

1. Data collected from Provider Practice Benchmarking, Merritt Hawkins, Association for Advancing Physician and Provider Recruitment, and Becker’s Hospital Review

2. Data collected from Provider Practice Benchmarking


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