September 05 2019

The Sprawling Costs of Physician Vacancies

The Sprawling Costs of Physician Vacancies

The effects of physician vacancies reach much further than the facility's bottom line. Vacancies have significant impacts from economic development in local communities to medical staff morale.

Economic Loss: Most patients who cannot be treated by a facility due to a physician vacancy will try to be seen somewhere else. This can mean an increase in outward patient migration to receive care in other communities, especially in rural areas. When this happens, another community’s local economy prospers not only from direct health care service revenues, but also from money spent on restaurants, groceries, gas, and shopping by patients visiting the community. When fewer dollars are captured in a community, local businesses have less to pay their employees, and local governments receive less in taxes. According to a report on The National Economic Impact of Physicians by IQVIA & AMA, each physician supports an average of 17.07 jobs in their communities and yields an average of $1,417,958 in wages and benefits paid to local workers. Each physician also generates an average of $126,129 in state and local taxes. The economic loss will continue to grow in the community with the vacancy as more patients must seek care elsewhere.

Poor Patient Experience: Outward patient migration can also occur when a physician vacancy causes longer wait times in a facility. In a study by Vitals, nearly 1 in 5 patients have switched health providers because of the amount of time they had to wait. Up to 30% of patients have decided to leave a facility without being seen because of long wait times. As wait times get longer, patients are less likely to recommend a medical facility to others. In addition to losing patient population, there’s also a direct correlation to lower patient satisfaction scores with longer wait times. 

Burnout: Asking other physicians to work overtime to handle the overflow of patients caused by the vacancy can lead to overworked physicians creating burnout and low morale. In some cases, burnout causes more vacancies as those physicians look for other opportunities with a better work/life balance. Physician burnout costs the healthcare industry $4.6 billion annually with turnover and reduced clinical hours as reported in the Annals of Internal Medicine. Low morale can also lead to increased patient complaints, staff conflicts, and higher error rates.

Bad Hires: As a result of pressures from a vacancy, a facility may feel they need to rush their hiring decisions to lessen these impacts. However, hiring a physician that does not fit with the facility’s culture can add to the low morale. If the new physician does not share the same values with the facility, productivity, quality, and staff motivation can drop. Also, physicians who are not a good fit with the facility’s culture are likely to leave after a short time, meaning the search to fill a vacancy must begin again.

Temporary Coverage Strains: Locum tenens can be a temporary solution to minimize the impacts of a physician vacancy, but facilities must be cautious. Continual contract labor use could reduce overall clinical productivity, as medical staff is needed to help with the orientation of each new locum provider. This loss in productivity can further harm employee morale by escalating the existing conflicts and complaints brought on by the vacancy. According to MedPage Today, rates for some locum tenens specialties can be 50% more than an employed physician. There are also additional fees involved with hiring locum tenens including travel and lodging costs. Employers will need to consider all these factors when deciding if hiring locums is the best option for vacancy coverage. 

Gain Insight: Health care is a national topic with a local market focus, and innovative solutions can happen outside of your network of knowledge. There are many strategies facilities implement to help manage the impact of physician vacancies on their communities. Let The Medicus Firm expand your network of knowledge and share some of the ways other facilities are controlling the sprawling costs of physician vacancies.



(1) The Cost of Long Wait Times, Athena Health

(2) 9th Annual Physician Wait Time Report, Vitals

(3) The National Economic Impact of Physicians, IQVIA & AMA

(4) Estimating the Attributable Cost of Physician Burnout in the United States, Annals of Internal Medicine

(5) A Comprehensive Locum Tenens Guide, MedPage Today

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