Press Release

The Business Case for Workforce Resiliency and Well-Being

March 30, 2022

ACHE’s annual survey of issues confronting hospitals recently reported that personnel shortages ranked No. 1 on the list of hospital CEOs’ top concerns in 2021. It’s the first time since the survey began in 2004 that financial challenges were listed second.

When I think about why we, as senior executives, must focus much more of our time and resources on our workforce, it’s not a complicated discussion. We must do so because it’s the right thing to do for our people and it’s the right thing to do for our organizations.

The argument about why a focus on well-being and resiliency benefits our physicians and staff is an easy one. Regardless of which survey or dataset you review, the collective impact of the Great Resignation (or mass retirement), high rates of burnout being experienced by existing healthcare professionals and the number of people in the healthcare field thinking about leaving their profession is stark. If we don’t do better by our people, they will struggle with exhaustion and job dissatisfaction, either within our organization or as they move on to others.

The argument about why dedicating resources to well-being and resiliency is the right thing to do for our organizations has been less visible in the headlines, and for good reason. Attending to the mental and physical health needs of our healthcare professionals during a global pandemic shouldn’t be muddied by business considerations. But now, as we’re seeing some light at the end of the tunnel, is the right time to talk about how resources devoted to workforce well-being impact our bottom line.

Research from the United Kingdom places the cost of a nurse leaving an organization at $11,000 to $90,000. The cost to replace an employed physician is two to three times their annual salary, according to the American Medical Association. However, the largest financial hit associated with replacing a physician is the opportunity cost organizations realize in lost patient care revenue, which can run into millions of dollars.

Beyond lost opportunity costs, we know physician burnout is associated with low-quality, unsafe patient care. Research out of the Vanderbilt Center for Patient and Professional Advocacy shows that physicians who model unprofessional behaviors may help to undermine a culture of safety, threaten teamwork and increase the risk for medical errors. Vanderbilt research also indicates that patients whose surgeons fail to communicate clearly or model respect are more likely to file a malpractice claim in the face of an adverse outcome.

The good news is emerging research also shows that intervention and wellness programs are working. According to the Vanderbilt Center for Patient and Professional Advocacy, a study of 80 high-risk physicians indicated that malpractice claims dropped an average of 83% following one intervention from a peer. While national data measuring the impact of well-being and resiliency programs created or enhanced during the pandemic are still being gathered, data out of my organization, Keck Medicine of USC, show encouraging signs. Our initiatives to mitigate employee burnout and improve our culture of wellness are making a difference from a business perspective.

A survey conducted by Safe and Reliable Healthcare shows that improvement in our local leadership scores in 2021 was associated with the reduction in risk of individual employee burnout by about 33%. Our performance on a SCORE survey, an instrument that identifies challenges and barriers to delivering high-reliability patient care, shows that our “intentions to leave” score dropped 11% in 2021 and our work-life balance score improved to place us in the 90th percentile nationally.

Tangible benefits are also being seen with our insurance premiums, which dropped more than $400,000 in 2022 due to our professionalism and Care for the Caregiver programs and our ability to be a transparent and highly communicative organization.

While many healthcare organizations have ramped up or modified workforce health and well-being programs because of the COVID-19 pandemic, it’s important that we not view them as discrete, crisis response programs that periodically get attention and resources. Well-being and resiliency programs need to be embedded in our strategic priorities, in our culture and in our operating budgets—now, post-pandemic and as a long-term investment in our people and organizations.

Rod Hanners is CEO, Keck Medicine of USC, Los Angeles. He will be a co-presenter of the session “Backing Up Words With Actions: Creating a Culture of Resiliency and Professionalism in a Post-Pandemic World,” at the Congress on Healthcare Leadership, March 28–31. Register today.