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The True Cost of Physician Vacancies

Jackson Physician Search
December 4, 2018

This article is the first in a series of content that reflects upon the findings in a recent white paper published by Tony Stajduhar, President, of Jackson Physician Search, titled Physician Recruitment: The Costs to Hire and Return on Investment.

According to a 2018 Association of Physician Recruiters’ (ASPR) survey, 40% of physician vacancies in 2017 went unfilled.  The largest number of hiring searches were for family medicine, hospital medicine, internal medicine, neurology, and urgent care.  With these shortages in mind, it is even more concerning when you realize that by 2020, almost 33% of active physicians will be 65 years of age and older.  If you are struggling with filling physician vacancies, check out our Guide to Physician Recruitment.  But first, let’s examine the true cost of physician vacancies.

Loss of Revenue 

The first and most obvious cost of a physician vacancy is the loss of revenue. For example, a Gastroenterologist generates almost $2 million in gross charges, while an Orthopedic Surgeon can generate almost $1.8 million in charges. Annualizing these numbers show that a hospital or medical group can lose between $150,000 and $170,000 per month for specialist vacancies.

Patient Migration 

Not as clearly defined, but just as critical are the numbers of patients that are lost while there is a vacancy. If a physician leaves, there is the danger of losing all of the patients that were already loyal to that doctor, especially if there is not a viable alternative already on staff. Hospitals and groups also lose out on referrals and the peripheral losses of not having a flow of patient to doctor and doctor to doctor referrals.

Market Share 

When vacancies are unfilled, that doesn’t mean that patients needing services halt until the position is filled. Anytime patients are forced to seek specific services elsewhere, your competitor is reaping the benefit. Once a competitor has an opportunity to develop a relationship with someone who was once loyal to your facility, the opportunity to recover them as a client diminishes exponentially.

Longer Time to Fill = More Costs

Different specialties have a wide variation in the typical time to fill. Bearing in mind the monetary losses and the ancillary losses the length of time your vacancy goes unfilled is critical. The ASPR reports that a family medicine vacancy is typically open 4.3 months, while a surgical vacancy can be open for 10 months or more based on the specialty and the location.


It is clear that the demand for physicians, coupled with a dwindling supply is not going away anytime soon. As physician vacancies continue to go unfilled and healthcare organizations struggle to manage the costs, the industry as a whole will be in a perpetual state of “all hands on deck” until the physician pipeline is stable once again.

If your organization is all too familiar with the costs associated with lingering physician vacancies, check out our report on How to Create Growth and ROI through Recruitment and Retention.

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