The High Cost of Physician Burnout in Healthcare Organizations

Updated on November 5, 2019
Liz Ferron Web copy

By Liz Ferron, MSW, LICSW

In the United States, physician burnout has become prevalent, with many surveys showing rates above 50 percent. This often leads to more turnover, less productivity and lower quality care, with a ripple effect to support staff and recruitment and retention costs. All of it costs healthcare organizations millions of dollars each year. 

It’s a significant problem, but it also represents an opportunity for healthcare organizations. According to the AMA’s STEPS Forward initiative “Creating the Organizational Foundation for Joy in Medicine™ from September 2017, “Executive leadership teams have an opportunity to improve the health and well-being of patients, and their organization’s financial bottom line, by improving the health and well-being of physicians and their practices.”

The first step for healthcare organizations is to understand forces contributing to physician stress and burnout.

Contributing Forces 

Dan Allen, MD, has seen the problem up close. He’s practiced medicine in Des Moines, Iowa for over 30 years and currently serves as Chief Medical Officer at UnityPoint Clinic, which serves Iowa, Wisconsin and Illinois and employs 1,100 providers and 30,000 support staff.

According to Dr. Allen, UnityPoint Clinic deals with both external and internal forces on physician burnout. Internal forces include changes in healthcare workflow and the increased impact of the electronic health record. External forces include, as he says, “the changing healthcare climate such as value-based healthcare and regulations associated with it, insurance changes related to Medicaid as well as the move toward value-based insurance products with decreasing rates offered for episodic care. This translates to changing compensation models, which balance both performance and productivity in our clinicians.” 

Effects of Physician Burnout

An April 2009 article published by JAMA Surgery, “Stress and Burnout Among Surgeons,” showed physician burnout can lead to disruptive behavior, increased medical errors, lower patient satisfaction scores and increased risk of malpractice—hence posing substantial risk to the economic well being of healthcare organizations. In addition, physician stress and burnout have a significant effect on support staff, resulting in higher turnover rates and added expenses for recruitment, training and retention.

UnityPoint has examined ways to mitigate these consequences. “We’re pulling things like referrals, prescription refills out of the office so we decrease the noise and we’re trying to do that from a cost-neutral standpoint,” Dr. Allen explains. “As a system, we are often caught with what is the value of trying [a malpractice case] versus settling it. It’s certainly a time commitment as well as money drain.” 

Turnover Costs

Maryam S. Hamidi, PhD, associate director of scholarship and health promotion at Stanford Medicine WellMD Center, and fellow researchers conducted a longitudinal study of physicians at Stanford Health Care and Stanford Children’s Health. The study was recapped in the October 2017 Medscape article “Burnout May Be Costing Your Institution Millions Each Year.” Hamidi and the team estimated the organization would lose 58 physicians in a two-year period, and the cost to recruit a new physician ran between $268,000 and $957,000. So replacing burned out physicians “costs the institution between $15,544,000 and $55,506,000 in a two-year period.” 

Tools Aid Physician Well Being

To mitigate losses like these, healthcare organizations must proactively create strategies to improve physician health and well being.

At UnityPoint, investments were made to develop the entire workforce. “It’s a cultural values connection that people need to make with why they’re here and what they bring to the organization,” says Dr. Allen. “Why are people in the healthcare profession in the first place? Once you identify that, you build your investment around that. We tend to believe it’s based on managing workflow, improving trust and communication in the organization and providing opportunities for the people who do the work to be part of the decision.

“There’s a dimension of physician well being that involves providing services for physicians, be it coaching or infrastructure,” adds Dr. Allen. “It also includes training, engaging and elevating physician leaders, so they actually feel like they can impact the larger organization for the betterment of patient care and their own well being.” 

Profound and effective changes can be made for physicians in need, even with a limited investment in resources. With so much at stake, healthcare organizations should make these efforts a top focus in the future.

Liz Ferron, MSW, LICSW is the Physician Practice Lead and a Senior Consultant at VITAL WorkLife a national behavioral health consulting practice supporting all dimensions of well being in the workplace. For over 35 years, their proven solutions have helped to reduce workplace conflict, facilitate culture change, strengthen interpersonal communication and build well being. For more information on physician burnout and solutions, visit or call 877.731.3949.

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.