Vetting future colleagues: A return on investment

Abstract Background Physician turnover is costly ranging from $150,000 to over $1,200,000 in costs per faculty transition. We created a recruitment process that sends a faculty surgeon and nurse to observe directly a candidate in their current practice setting. In this study, we analyze the recruitment and opportunity costs associated with physician recruitment; and use the physician business plans to develop methodology to estimate return on investment over a 5-, 10-, 20- and 30-year horizon. Methods We calculated the recruitment costs of sending a faculty surgeon and nurse to evaluate prospective surgeons throughout their entire continuum of work environments. Then, we analyzed the clinical productivity of a spine surgeon, hand surgeon and traumatologist. Subsequent annual payments collected from each surgeon's charges were reviewed, averaged and used to project the return on investment at 5-, 10-, 20-, and 30-year models; and compared against the opportunity costs of a physician's absence. Results Costs directly related to recruitment over two years totaled $113,061. The Spine surgeon was followed for three years; the hand surgeon and traumatologist were followed for two years. The ROI for a spine surgeon retained as faculty at 5 years in our institution is 11,601% and increases to 23,203%, 46,406% and 69,608% at 10, 20 and 30 years. Our ROI for retention of a hand surgeon ranged from 12,508% at 5 years to 75,047% at 30 years and our ROI for a retained traumatology faculty member ranged from 6,826% at 5 years to 40,959% at 30 years. Conclusions This study provides a financial framework that elucidates the recruiting costs of hiring a physician. Recruiting and mentoring clinical faculty members may facilitate faculty members' satisfaction and engagement, which, in turn, may help departments retain high-quality faculty staff committed to a multidimensional academic mission. Future studies should validate the ROI calculations.