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Ninety percent of medical groups that participated in the Cejka Search and AMGA 2005 Physician Retention Survey reported having programs to track physician turnover. That number is up from the 73% that reported doing so in 2004. Additionally, 58% of groups have designated retention-improvement initiatives, up from 48% the previous year.

It is unclear whether the increase in retention initiatives has had an effect on turnover. Although turnover was reported as 6.4% in 2005 and 9% in 2004, the calculation method was different, so a year-to-year comparison isn't conclusive. What is clear is that high turnover has many practices worried.

When asked to rank their level of concern about physician turnover in their practices, nearly half (47%) of groups participating in the survey reported a 4 or 5 rating, indicating a high level of concern about turnover, and 36% of all respondents said turnover was one of the top three critical issues facing the group.

As the demand for healthcare begins to outpace the supply of practicing physicians, in part due to the aging population in the United States, experts predict that the looming physician shortage will not only affect the quality of healthcare, but in many high-demand specialties will likely have more job opportunities, leading to retention becoming a top priority for most medical groups.

"Awareness [about turnover] has been heightened over the last couple of years because of a constriction in supply of candidates," explains Carol Westfall, president of Cejka Search. "People are realizing the cost of turnover, and we will probably see more focus [on retention] in the future."

Compensation isn't everything

Retaining your physicians may be more complicated than simply offering better compensation, if the survey results are any indication. Voluntary separation accounted for 70% of turnover—termination (16%), retirement (13%), and death (1%) accounted for the rest. Of those physicians who left voluntarily, compensation was cited as the reason for resignation 21% of the time, tying with practice location as the second most commonly cited reason for physician departure.

However, location as a reason for physician departure grew from 13% in 2004 to 21% in 2005, compared to an increase of only 1% for compensation. Both complaints fell far behind "practice issues" (e.g., pressure for high patient volume), the cause for voluntary departure 44% of the time.

Although still not as important as practice issues, compensation tends to play a progressively important role in turnover for smaller practices. Groups with 3-50 physicians cited pay as the reason for turnover 27% of the time, compared to only 13% for groups with more than 500 physicians.

This may be because smaller practices tend to be single-specialty high-earners and more focused on productivity, says Martin Osinski, MBA, president of American Medical Consultants in Miami and secretary-treasurer and past president of the National Association of Physician Recruiters.

Physicians seek balance

Despite not being the number-one reason that physicians leave practices, compensation is certainly relevant when it comes to turnover and retention, according to the survey. Although the amount of compensation was a secondary factor driving turnover, some of the practice issues that groups frequently cited directly or indirectly tie to physician compensation. For example, respondents asked to elaborate on the practice issues that lead to turnover most often cited poor cultural fit (19%), but the next most common reasons cited were work hours that didn't fit the physician's desired lifestyle (18%) and pressure for high patient volume (11%).

This may be due in part to generational and cultural differences that lead certain physician cohorts to reject the demanding workloads that typified the profession—and compensation methods—for years, says Mary Barber, vice president of marketing for Cejka Search. Instead of working grueling hours to maximize compensation, physicians today increasingly prioritize flexible hours and a stress-free work environment (for more about this topic, see "Quality of life top concern for doctors, study says" on p. 7).

"There's going to be an increasing percentage of physicians [for whom] lifestyle, schedule, flexibility, and reasonable call and less work hours are all going to play a role," adds Osinski. And this trend is likely to continue as the demographic makeup of physicians continues to change.

For example, female physicians are more likely to work part time, and less likely to leave a part-time position (for more information, see "Retiring baby boomers set stage for gender parity in healthcare during next few years" on p. 1 of the April 2006 PCR). Although female turnover was higher than male turnover for full-time physicians, turnover was 6.9% for part-time females compared to 9% for part-time males. Part-time positions may become even more common as nearly equal male/female medical school graduation rates set the stage for gender parity among younger physicians.

Female physicians are not the only physician group interested in balancing work and personal life. Generation X and Y physicians (i.e., physicians less than 40 years old), both male and female, tend to have less interest in compensation and more in finding a work-life balance, as do physicians who are approaching retirement, Westfall says.

Practices are changing their structures to retain physicians with these interests, often referred to as "lifestyle" physicians, according to Barber. For example, 44% of groups that responded to the survey allow part-time physicians to become partners, and 51% allow part-time physicians to job-share a full-time patient load. The majority of groups (58%) reported an increase in part-time physicians at their practice in the past year (see related story on p. 11).

Appealing to lifestyle physicians may be easier for larger groups, which more commonly have the infrastructure and support team to do so, Osinski says. Smaller groups had more trouble retaining female physicians than larger ones. Male and female turnover was 5.3% and 5.1% respectively in groups with more than 500 physicians.

However, in groups with 3-50 physicians, female turnover was 11.3%, compared to only 4.7% for male physicians.

Retention begins with leadership

High turnover can cut into your bottom line, particularly if your physicians work in a highly competitive environment and receive productivity-based compensation. Respondents to the survey said turnover increased stress on remaining physicians, placed a burden on leadership to replace the departing physician, and decreased morale and productivity throughout the group.

To avoid getting caught in a cycle of turnover, senior leadership should make retention a critical focus area by addressing it as part of the management agenda and having quarterly or monthly discussions and reports, Westfall suggests.

Efforts to retain a physician should begin early on in the physician's career—nearly half of all physician turnover in the survey occurred in the first three years, and 60% of physicians left in the first five years—particularly for younger physicians who may view a new position as a stepping stone rather than a lifelong career.

"Younger physicians are more loyal to people than to organizations," Westfall says. "So the connection physicians [have] to their boss, to their department, and to the senior leadership becomes even more important so they feel a sense of belonging."

Conducting orientation programs, assigning senior mentors, and interacting with a physician's family are effective ways to establish a connection with a new physician immediately after hiring, Osinski says.

Educating the physician in his or her first 90 days about how the practice operates is crucial because turnover often results when a physician's expectations are different from reality.

The most common compensation-related reason for voluntary turnover was lower compensation than the physician expected.

However, it is also crucial to continue to focus on retention after physicians have been at the practice for a while. Surveyed practices reported that they employ the following retention-improvement tools for physicians who have been at a practice longer than 90 days:

• Continuing medical education reimbursement (76%)

• Regular feedback and performance review (71%)

• Opportunities for professional development (56%)

• Partnership or ownership opportunities (49%)

• Profit-sharing opportunities (36%)

Retention efforts are constantly evolving, and an initiative that works well for one physician may not work for others, Westfall says. Therefore, base your retention efforts on the strengths of your practice, as well as the desires of the individual physicians.

Reproduced from Physician Compensation Report © 2006 HCPro, Inc. 200 Hoods Lane, Marblehead, MA 01945. 781/639-1872. www.hcpro.com. Used with permission.