Health Care Costs

Clinician burnout has a major economic impact on our health care system. Organizations have a fiscal responsibility to invest in solutions that promote well-being.

Although clinician burnout is widely recognized, not enough has been done to systematically address this apparently growing problem. One reason for this is a lack of understanding and then awareness of the economic costs and consequences associated with clinician burnout and why investing in efforts to combat burnout could have a positive impact on the fiscal health of organizations.

Costs Associated with Clinician Turnover

Data suggest that the underlying causes of and resultant burnout is a major driver of clinician turnover. Over time, increased turnover adds up to substantial financial losses to organizations through direct costs associated with recruitment, revenue lost while finding a replacement, and the additional time it takes for new staff to get caught up in a new environment. Some studies suggest that costs to replace a physician are 2-3 times their annual salary. A 2012 report from the Association of Staff Physician Recruiters estimated that the actual lost revenue for one client was $990,000 for each full-time equivalent physician. Similarly, the cost of replacing a nurse is estimated at $37,700 to $58,400. The cost of replacing subspecialty clinicians is likely to be substantially higher, with estimates ranging from hundreds of thousands to more than $1 million. Stanford University estimates that if nothing were done to address burnout, almost 60 physicians would leave Stanford within two years. This economic loss could range from $15.5-55.5 million.

These numbers do not account for the disruptive impact turnover can have on other members of the care team, including an increased risk of burnout for both direct colleagues and other members of the care team. Burnout in individual clinicians can drain work teams and the prevalence of burnout-producing factors and individual manifestations can best be perceived as infective and painfully synergistic. These numbers also do not account for costs associated with patient safety and care. One study found that hospitals in which burnout among nurses was reduced by 30%, had a total of 6,239 fewer patient infections, for an annual cost saving of up to $68 million.

Costs Associated with Decreased Productivity

Although difficult to fully quantify, large costs associated with clinician burnout can stem from the loss of productivity in clinicians who are experiencing burnout. In a study of 2,500 physicians at the Mayo Clinic, every 1-point increase in burnout and 1-point decrease in professional satisfaction was associated with a 30-50% increased likelihood that physicians would reduce their professional work effort (e.g. the amount of time they spend in patient care activities) in the following 24 months. While reducing work effort as an adaptive coping mechanism may reduce medical errors and illnesses, small changes in productivity can have large effects on an organization’s bottom line. In academic medical centers, costs associated with productivity losses are even harder to quantify, but one estimate suggests that burnout can lead to a 15% decrease in productivity for faculty who are involved in academic work writing grants and authoring publications.

Resources on Health Care Costs

More Resources

A Journey to Construct an All-Encompassing Conceptual Model of Factors Affecting Clinician Well-Being and Resilience

Burnout Among Health Care Professionals: A Call to Explore and Address This Underrecognized Threat to Safe, High-Quality Care

At Stanford, Physician Burnout Costs at Least $7.75 Million a Year

What You Don’t Know Can Cost You: Building a Business Case for Recruitment and Retention Best Practices

Find more resources about Health Care Costs

Addressing clinician burnout is not only an ethical responsibility of health care organizations-it's a fiscal one as well. Health care leadership has a duty to patients and the public at large to act.

Medical Errors, Malpractice Suits, Presenteeism, and Absenteeism

Self-reported medical errors are also associated with burnout in both clinicians and trainees and may indirectly contribute to health care costs, although this research is still limited. Medical malpractice suits can also contribute to rising costs associated with burnout for physicians, nurses, trainees, and other health care professionals.

Additionally, risks and costs associated with those who work while sick should not be dismissed. Presenteeism, which refers to working while sick, has been implicated in the transmission of diseases from staff to patients in health care settings. Despite recognizing that working while sick might put patients at risk, a recent survey found that physicians, nurses, and physician assistants frequently work while sick. Working while sick is often viewed as a moral obligation and is driven by policies and logistical issues that do not support absenteeism. Many health care organizations have no mechanism for what to do when a clinician can’t come to work. Usually, co-workers must assume some of the sick clinician’s workload, adding to their already-strenuous schedule. Cultural norms and ambiguity around what constitutes “too sick to work” also contributes to the conflict health care professionals face in deciding whether to come to work while sick or to stay home completely. While presenteeism poses a safety risk to patients, it also contributes to enormous productivity losses. Mental health issues, like depression, can also contribute to worker presenteeism and may result in increased productivity losses and higher health care costs. A 2012 study among nurses found that depression was significantly associated with presenteeism and that presenteeism was significantly associated with a higher number of patient falls, a higher number of medication errors, and lower quality-of-care scores. Baseline estimates indicate that increased falls and medication errors caused by presenteeism are expected to cost the United States just under $2 billion annually. Similarly, a recent study found that an added cost of $1.2 million can be attributed to depression-related presenteeism in medical residents, suggesting that depression in trainees is a hidden source of higher health care costs nationwide.

Bottom Line

The business case for investing in solutions that promote clinician well-being is clear. Organizations cannot afford to ignore clinician burnout. Leadership not only has an ethical responsibility to reduce burnout, but a fiscal responsibility as well. Evidence suggests that investment to reduce clinician burnout is justified and return on investment is measurable.