The Financial Cost of Burnout

Doctor walking with head down

The job of physician has always been challenging. “You are dealing with life and death and an ever-changing body of knowledge,” says Heidi Schwarz, MD, a neurologist and co-chair of the American Academy of Neurology’s Burnout Work Group. “That’s been the same for years and years. What’s been added is the frustration of another layer of bureaucracy and documentation that distracts us from what led us to medicine in the first place.”
Headshot of Heidi Schwarz, MD
photo courtesy of Heidi Schwarz, MD

The result is a record number of neurologists who are burned out.

Burnout is more than just a touchy-feely problem tied to the shoulders of those who struggle with it. It is “becoming a national health crisis,” says this group of ten leading healthcare CEOs. “The result is that many previously well­-adjusted and engaged physicians have been stressed to the point of burnout, prompting them to retire early, reduce the time they devote to clinical work, or leave the profession altogether.” And for many practices, this comes with a big financial cost.

Understanding this cost may help you (or your employer) see the seriousness of the problem in a new way and start to implement the changes that are needed.

The cost of leaving or early retirement

According to the physician authors of this article published in Mayo Clinic Proceedings, the costs of replacing a physician who has chosen to leave or retire can be two to three times a physician’s annual salary. Similarly, an analysis done by Atrius Health estimates the cost is between $500,000 and $1 million.

Replacing a physician “involves the costs to recruit somebody, or hiring a firm to do it. It also involves the cost of training them in your system: how to use your EMR and how the call system works. Also scaling up their efficiency so there is no lost productivity and patient access, as compared with someone who has been doing the job for a while,” says Schwarz. There is almost always lost revenue because the incoming doctor’s caseload won’t be the same, at least initially, as the outgoing one.

The cost of staying and doing nothing

What about the neurologist who doesn’t leave: who is burned out but just tries to muscle through? Their productivity goes down, say Schwarz and others. Researchers at the Mayo Clinic found a clear correlation between burnout and lowered productivity in the payroll records of a group of 2,000 physicians. They showed that every one-point increase in burnout (on a seven-point scale) was associated with a 40 percent increase in the likelihood that a physician will reduce their clinical efforts in the following 24 months.

Doctor walking with head down

“In trying to deal with burnout, you can become sort of a drone,” says Schwarz. “As on an assembly line, you have no engagement with your patients, and you actually end up even worse.” The result is “poor quality of care, lower patient-satisfaction scores, medication and other errors, unnecessary testing and referrals, greater malpractice risk, and the possibility of higher hospital admissions and readmissions. Those are all very significant costs that add up pretty quickly.”

The cost/benefit of cutting back on hours

An alternative is to cut back. Of course, this is not financially tenable for everyone, but can be offset by finding other sources of income. This option still comes with financial costs to the practice, but they are certainly mitigated. Another cost that Schwarz says is important to talk about and overcome is the guilt and “shame” of cutting back.

But, maybe it’s not the worst thing. Some of us are much happier not having to pull a full-time load and being able to actually engage when we’re there. We’re actually better at what we do. I’m cutting back just a little bit more on my practice. And you know, I have a little guilt about it, but on the other hand, I know that my patients value the fact that I’m still hanging in there. Just knowing that I’m still there is such a relief to them, and yet I can find a balance of some sort.”

Organizational solutions

Going part time is not the only solution, and the onus isn’t only on the burned-out clinician. Increasingly, leaders in healthcare recognize the effectiveness of changes at the organizational level.

The group of healthcare CEOs mentioned at the top of the article found that every one-point increase (on a five-point scale) “in the leadership score of a physician’s immediate supervisor decreases the odds of burnout by 3.3 percent and increases the likelihood of satisfaction by 9 percent.” They provide a long list of strategies they are using to lower the rates of burnout at their institutions.

The authors of Executive Leadership and Physician Well-being offer a nice summary of organizational strategies successfully used to combat burnout at the Mayo Clinic. Stanford Medicine’s WellMD Center has developed a three-part professional fulfillment model, and The American Medical Association and The National Academy of Medicine also have proposed organizational solutions to get at the root causes of burnout.

Burnout can’t be viewed as a personal problem anymore, organizations have to step in. If you are in an organization (even a small private practice) but don’t feel you have enough authority to make the change, you can take this argument to someone who does. Dollars often speak louder than words.

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