Investing Cash in Physician Well-Being: Return on Investment

Physician well-being is an issue that needs to be discussed, promoted, studied and funded.  Physicians need to be at the front of the discussions and leaders in the field of well-being.  As boots on the ground, we are force multipliers for change in this arena.  We are the grassroots.  Even the best grassroots efforts fail without money.  In this age of limited healthcare resources, how do we convince our organizations to pay more than lip service to our well-being needs?

Over a decade ago I began  to hear a lot of strange words and word combinations being thrown around in medical school that I had never heard before.  Gastrulation of the blastula, intensity modulated radiation therapy, disseminated intravascular coagulation, menigomyleocoele, myelophthisic anemia, on and on and on to this day.  These days, it seems like a few new words have entered the lexicon of medicine: physician well-being, physician burnout, physician wellness, work-life balance, chief wellness officer.

Burnout stories posted by physicians and guest physicians are common thanks to the epidemic of burnout. White Coat Investor has a few guest posts by Dike Drummond, MD, a physician leader in the area of burnout. The Happy Philosopher can experienced burnout himself and has good posts on the topic.

These stories only go so far, effort needs to be made a the institutional level to effect change.  Physicians need to educated ourselves on the subject of well-being as we would anatomy, oncology, etc.

A leader in the field of physician well-being and Oncologist, Dr. Tait Shanafelt, has published an article on this topic titled: The Business Case for Investing in Physician Well-Being JAMA Inter Med 2017.  The authors propose a continuum model of well-being and also a formula to calculate return on investment (ROI) from money invested in physician well-being.   This information can be used in discussing funding with your organization.

Healthcare organization response to the physician burnout epidemic has been lackluster.  There are 2 main reasons:

  1. Lack of awareness of the economic cost of burnout
  2. Uncertainty about whether anything can be done, ie, “We can only allocate x dollars to the issue, that doesn’t seem like enough to make a difference. “

Cost Associated with Turnover

Burnout is the one of the leading causes of physician turnover, with the 2 year turnover rate double among burnt out physicians.  Turnover is expensive due to cost of recruitment, on-boarding and time for new physicians to reach optimum efficiency.   

How expensive?  Studies show the cost of physician replacement in 2-3 times the physician salary.  Two studies have shown similar numbers at $990,000 and between $500,000 – $1,000,000.  Subspecialtes will be higher and cost will rise as physician shortages in some fields manifest.

Turnover also affects patient care due to disruptions, can cause other members of the team to turnover (it’s contagious) and adversely affects the organization’s reputation.

Academic centers may think they are immune due to a pool of residents/fellows for employment.  This assumes a newly trained physician can replace a mid-career faculty.  This fails to recognize the mid-career physician excels in clinical productivity, grants, trial design, publications and influence.  The mean age at first R01 grant is 44 years old indicating that this milestone of an independent investigator is reached in mid-career.  Academics centers are not immune to the cost of turnover.

Costs Associated with Decreased Productivity

In a Mayo clinic study of 2,500 physicians, each 1-point increase in burnout on a 7-point scale or 1-point decrease in a professional satisfaction scale was associated with a 30-50% likelihood that physicians would reduce their work effort over the next 24 months as assessed by payroll records.

Due to the high fixed cost of many organization, a small change in physician productivity can have a large impact on the bottom line.  Thus, only a small percent of physicians would need to have decreased productivity to affect the finances.  For example, if 20% of physicians we burnt out (studies show it might be up to 50%) and those physicians cut back 30%, that translates into a 6% decreased in productivity.   Assuming colleagues would pick up 50% of the workload, that is still a 3% productivity bottom line cut.

Effects of Well-Being on Quality, Safety and Patient Satisfaction

  • There seems to be a dose-response relationship to burnout and quality with a 1-point increase in a 54-point emotional exhaustion or 30-point depersoould nalization scale correlating with a 3-10% increased likelihood  of the physician reporting a medical error in the previous 3 months.
  • Studying 54 ICUs in Switzerland, investigators that the aggregate mortality rate was associated with burnout level among physicians and nurses.
  • There is a relationship between burnout and failure to discuss treatment options and answer patient questions.
  • Post-discharge recovery time is longer among burnout physician patients and patients adhered less to physician recommendations.

A Suggestion on the Organization Approach to the Problem

Historically, organizations have invested in interventions shown to improve patient safety and care quality.  There are moral, ethical and organizational viability reasons for these, often large, investments.  The argument has been made to invest similarly in physician well-being.

Interventions to enhance well-being:

  • Prioritization by leadership
  • Organizational learning
  • Metrics
  • Staffing
  • Open Communication
  • Promoting a culture of wellness

A model is proposed spanning the organizational stages of novice, beginner, competent, proficient and expert.   Here are metrics of the novice level:

  • Aware of the issue
  • Wellness committee
  • Individual level interventions – mindfulness training, resources for exercise/nutrition

Here is the Expert level:

  • Physician well-being influences key operations decisions such as strategy, priorities, resource allocation, new initiatives
  • Shared accountability for well-being among leaders
  • Chief well-being officer on executive leadership
  • Endowed program generates knowledge applicable to other organizations
  • Strategic investment to promote physician well-being
  • Culture of wellness

There is an ocean of difference between these stages.  Years of work and funding.  I’ve worked at several organizations and have yet to see one move past the novice stage.

Where do we start?

Commitment from executive leadership is the prerequisite, assessment the first step…

Assessment: Organizations should understand the factors that govern physician well-being.  These factors can be organized into driver dimensions:

  1. workload
  2. efficency
  3. flexibility/control
  4. culture and values
  5. work-life integration
  6. work community
  7. meaning at work

Limited investment can be made with great change in flexibility/control, efficiency, community and meaning.  However, even limited investments cost money.  What kind of money are we talking about?

Determining The Appropriate Initial Level of Investment

You need a dollar amount to ask to promote well-being.  Getting to this number starts with determining the cost of physician burnout.  There is a nice simple formula in Figure 2 of the paper, but you can look it up if needed.  Chances are if you’re reading this, you’re not meeting with leadership tomorrow but painting with broad strokes so an example will suffice.

Input data:

  • Number of physicians at center
  • Rate of burnout at center.  National mean 54%
  • Turnover rate per year. National mean 7-7.5%.
  • Cost of turnover per physician.  Mean cost $500,000-$1,000,000.

Example: 450 physicians, 50% burnout, 7.5% turnover, $500,000 cost per physician = $5,625,000 cost of physician turnover annually.

Ok, so now you have a number to start with.  This isn’t the amount needed to combat the problem.   However, lets say the organization (with your help) identified an intervention costing $1,000,000 that would lower the burnout from 50% to 40%.  That’s a relative reduction of 20% and is consistent with or greater than that of multiple interventions shown to reduce burnout.

With 50% burnout rates turnover is 7.5%.  Data shows that burnout physicians are twice as likely to turnover.  Therefore, 50% (the burnout half) of physicians have a turnover rate of 10% and the other 50% have a 5% turnover rate for a final 7.5% turnover for a total of 2.5% attributable to burnout.  If your intervention lowers the burnout rate by 20% as mentioned above, that is a 0.5% reduction in turnover.  Taking the cost of burnout above of 5.625 million and cutting 20% due to the intervention saves 1.125 million.

Return on investment (ROI) = (Savings – Cost) / Cost = 12.5% ROI.  That is a tremendous ROI, and should get the door open to at least start the awareness part of the novice continuum.  A worksheet for ROI is available in the paper.

This is probably conservation because it doesn’t account for lost productivity of burnout physicians who don’t turnover, cost of reduced patient satisfaction, quality, safety, reputation and litigation costs.

Coffee beans in Kauai, HI. Invest in well-being and it will bear fruit.


Physician well-being is not a problem that will disappear without intervention.  Awareness of the problem and that change can be made are first steps.    Meaningful progress requires organizational monetary investment.  As with interventions aimed at improving patient safety and quality of care, providing these funds is not only the ethical responsibility of the organization but interventions have a positive return on investment.  Thus, it is also fiscally responsible for organizations to invest in physician well-being.

What is your experience with the business side of physician well-being?  Is your organization invested?

7 Replies to “Investing Cash in Physician Well-Being: Return on Investment”

  1. Physicians are burnt out because the job has become intolerable. I started out as a fee for service private practitioner in what was essentially a cottage industry. I learned my chops, committed to my job, and earned my living. I had considerable control. I ended as an employed physician for a monster “provider” playing a corporate game. Medicine is all about the mumbo jumbo in the middle part of your article. The mumbo jumbo is caused by the fact you are like Gulliver being staked to the ground by the Lilliputians. You spend your time learning your chops and some nurse at some corporate desk decides what you WILL do and how much she’s going to pay you to do that despite how much that may entail. When I started the physician made 10 cents of the medical dollar. I’m quite sure it’s well under a nickle today. There is no solution as long as the Lilliputians are in charge and Lilliputians are only interested in their well being not yours.

    1. Gasem,
      The analogy of Gulliver seems appropriate. It is frustrating that we have lost much control and that those in control are almost invisible like Lilliputians.
      Who is “they”? Is what I ask my staff when staff says “they told us” when we are doing something new that takes resources or requires change. Rarely do so get a satisfactory answer.
      Unfortunately, I have a long career ahead (maybe) so need to figure it out for myself and also feel a responsibly to help solve the problem.
      My plan is to read and post about it and learn from readers comments. At a minimum I’ll learn how to keep my own well-being high and avoid another burnout and at maximum perhaps affect change at some level.
      We shall see…
      Are you saying that lack of control was a major reason you retired? If so what another reasons? I’m curious.

  2. To some extent my retirement was due to corporatization. Let’s say you do 100 cases that go great. Then somebody complains because they got nausea, or a nurse complains because Dr so and so over at the other surgery center she works for “does it this way” or you cancel a case because someone isn’t NPO. All of a sudden everything is a national incident. Do you compromise the quality of care because you don’t want to catch the strafing. You have a standard of care to worry about but suddenly CMS cuts the reimbursement 50% yet the surgical staff wants the service to continue to be performed, for example epidural steroid injections. Your malpractice goes up $10K for no apparent reason. The surgery center decides “we need to work on Saturday” There is a general deterioration in staff happiness and increase in tension due to over-production. Some disgruntled employee who is leaving throws out your policies 3 months prior to Joint commission etc etc. Suddenly corporate has you filling out form after form and taking class after class designed to capture compliance dollars for them. Oh did I mention the EMR and the 3 other paper backup forms you have to fill out?

    Your physician investment model relies on a non pathological platform from which to start. I see medicine just becoming more and more political and pathological. With regard to physicians, we are now “providers” we will be replaced by cheaper substitute “providers”, like PA’s and NP’s as the dollar continues to be squeezed even though care quality will suffer considerably. Like the commercial says “parts is parts”. Some physician jobs will entirely be replaced by AI. Hope I’m wrong. Every time a new VP MBA is minted they need to justify their existence by implementing some silly sure fire BS. Not to be cynical but now it’s just business.

    1. So you’ve clearly experienced more negative aspects than I have. I’m sure this is partly because you’re older and partly you own your own group. I’m a W2 employee so somewhat shielded from these paperwork things.
      I see your point and probably every doc has these stories. It is a pathological system. I get that. However, I have a motivated mindset right now do dive into that system and figure it out. Call it hubris of youth, perhaps it is.
      I think wise experienced docs like you who have a solid financial understanding can get the conversation started by helping explain to these new minted MBAs that they are losing money but not addressing the issue. Sure, parts is parts and maybe that is the new model. The point of the post wasn’t to propose a solution but to get a foot in the door. My reasoning is that if these admin types smell money to be made or better yet, experience the pain of loss aversion from all that they have lost by not addressing the issue sooner, at least that’s a foot in the door. It’ll take tenacity but hey, I don’t see a lack of that in you and I find it pleasantly contagious : )

  3. I would never nay-say your position. Your position is rational. It doesn’t mean Lilliputians are rational, nor interested in making the “money” you propose they will make. Sometimes there are things happening in the background the financial consequence of which makes the physician’s well being irrelevant. I’ve been through that war also. In the mean time make yourself as FI as you can.

  4. The medical pharmaceutical megacomplex is in control of modern day western medicine and the implosion is imminent. No one has any real interest in keeping physicians mentally or physically healthy. It’s not sustainable. Physician burnout is just the “canary in the coal mine. “ I tried unsuccessfully to improve the working conditions of the providers I supervised (as an MD myself) and quickly became the enemy of administrators. I too was burned out and eventually quit six years ago after a relatively short 20 year career. The fall out was appalling. Many of the doctors I had hired also jumped ship. Many others took my bravery as a spark to change their lives as well and restructure their careers for the better – easentially getting out of clinic. The financial fallout must have been huge but the organization NEVER did exit interviews and subsequently has just hired mostly lower paid PAs to replace these highly trained MDs. I have followed up and no real change has happened. I have yet to fully recover from the hell that is modern western medicine.
    Bottom line- you can talk about this all you want and NO ONE in power to make change will do anything!!

    1. Sue,
      Thanks for sharing. Your story is too common from the perspective of the burnt out Physician and less commonly from the physician who tried to initiate change and failed.
      I see future myself in your situation so I’m trying to learn about the issues. I can see you are angry at the outcome. What advice do you have for someone like me who is relatively young and wants to make change at the institutional level?

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