There have been plenty of blogs and articles written in the last few years regarding burnout among physical therapists. With onerous documentation requirements and the high level of stress that accompanies a heavy patient volume being among the chief complaints, it is a well established problem in the industry. 

However, what hasn’t been particularly well established is... What is the actual dollar amount tied to having a therapist walk out the door, and the cost to replace that therapist?

When considering the true cost incurred by a practice owner due to a physical therapist leaving, let's think sequentially about the chain of expenses and disruptions beyond just filling the vacancy. This evaluation incorporates key insights based on real feedback from those who know the situation best - practice leaders themselves, representing groups from 10 therapists to 1,000 therapists. 

(Calculations given below are determined by either the hard cost as explained, the value of time taken away from revenue producing activities, or through a simple multiplication of estimated employees’ time in hours by their hourly wages.)

 

The Layers of Turnover Costs

  1. Separation Costs
    • Exit Interviews and Administrative Tasks: Conducting exit interviews help to understand the reasons behind a departure and involves administrative tasks and paperwork processing, which incurs certain costs in terms of time and resources. Estimated impact = $250.
  1. Immediate Loss of Productivity
    • Endure the Vacancy, or backfill with PRNs / Travelers?
      • Endure the Vacancy Period
        • The period of time when the position remains unfilled leads to lost productivity and lost revenue. This is one of the more “direct” costs associated with PT burnout. From the practice leaders respondent to the survey, 8 weeks is the average gap between someone walking out the door and a new therapist starting. Thinking about the financial implication, Bob Bacci of Kinetic Care Group explains, “If a PT sees 60 visits per week at $100 reimbursement that’s $6k per week. So for each week you are short 1 PT FTE you are losing 6k… if it takes 8 weeks to hire that is $48k lost revenue.” Estimated impact = $48,000.
      • PRNs / Travelers
        • Should you choose to quickly engage PRNs or Travelers to fill the gap until a full-time therapist can fill the position, it’ll cost you. Leveraging a PRN or Traveler will run you roughly $50 per hour for a PRN and $90 per hour for a Traveler. Estimating a $35 per hour mark for a typical staff therapist, this represents a $35 per hour delta versus the average of PRN+Travelers at $70, or a $11,200 difference over an 8 week period. Estimated impact = $11,200.
  1. Recruitment Costs
    • Advertising and Recruiter Fees: Advertising the open position across multiple platforms and possibly hiring a recruiter can significantly add to the expenses. Derek Halladay of Back in Action Therapy states how a recruiter “can cost up to 25% of the clinicians first year salary, so that’s $15k-25k depending on the PT pay by region.“ Estimated impact = $20,000.
    • Staff Time: The time that staff members spend on sorting resumes, interviewing candidates, and engaging in phone screenings translates into costs. Estimated impact = $1,000.
  1. Hiring Costs
    • Background Checks and Licensing Verification: Essential for ensuring the credibility and qualifications of potential hires, these checks are another necessary expense. Estimated impact = $500.
    • Credentialing Admin Work: The resource within an organization responsible for credentialing the therapists, spends time gathering diplomas, CVs, and other paperwork. Estimated impact = $500.
  1. Training and Onboarding
    • Training: All the training and skills invested in that previous therapist have now walked out the door. Integrating a new therapist involves not only initial training but also the resources spent on helping them to fully integrate into the existing team. Practice leadership and/or senior therapists take time away from their typical duties to work alongside the new therapist, reducing their own productivity. Estimating 2 hours per day for a month, then 1 hour per day for a second month of leadership & senior staff time, you’re looking at roughly 60 hours of lost productivity time.  Estimated impact = $6,000.
    • Learning Curve and Credentialing Delay: A new therapist may take at least a couple months to reach the productivity levels of their predecessor, further adding to the indirect costs. Dan Johnson of Total Balance Physical Therapy & Fitness explains, “During this introductory period, the new therapist is not fully productive. Estimating a loss of $10,000 (50% productive) in the first month and $5,000 (75% productive) in the second month, it gives a combined loss of $15,000 for the first two months.” He continues, “And the subsequent months might still not even be fully productive, but at a diminishing rate.” Another headache to potentially contend with is limitations in a therapist’s ability to treat due to credentialing being held up longer than desired, a process that can at times drag out for months. Estimated impact = $15,000.
  1. Impact on Existing Team 
    • Increased Workload on Remaining Staff; Impact on Morale: The additional stress and workload can lead to reduced productivity, higher error rates, and even affect the overall service quality. If morale becomes low enough, you could even have further burnout and corresponding therapist departures on your hands. “The departure of a therapist can negatively impact the morale of remaining staff,” said Dan Johnson. “This can lead to reduced productivity, increased turnover, and additional costs related to managing team dynamics and maintaining morale.” Estimated impact = Difficult to say exactly... but should these factors contribute to another therapist wanting to leave, then you can apply the full total cost represented in the title of this article!
  1. Impact on the Patients 
    • Decreased Quality of Patient Care, and Erosion of Trust: With turnover, patients potentially will be treated by multiple therapists until a full-time replacement is found. This disruption can compromise the continuity of care, potentially leading to less effective treatment and inappropriate pacing of patient progress (too slow or too quick). All of this can lead to a decrease in client retention and satisfaction. For illustration purposes, let’s assume that of a departed therapist’s existing patients, 5 of them choose to cut their 12-visit Plan of Care in half, resulting in 30 overall lost visits. Estimated impact = $3,000

Calculating the Total Cost

Assuming an 8 week timeframe to replace a therapist, and incorporating all the potential costs (some averaged where multiple pathways are listed) as mentioned above, this total potential cost to a practice’s bottom line comes to $65,350. A staggering number - especially given the current climate in therapy of declining reimbursement and the perceived extreme shortage of qualified therapists to fill vacant positions.

Strategies for Mitigation

Understanding these costs not only highlights the importance of effective recruitment and onboarding processes but also amplifies the critical value of staff retention. Practices can mitigate these costs by:

  • Enhancing Employee Satisfaction and Focus on their “Why”: Regularly soliciting and acting on feedback is crucial for retaining talented therapists. Therapists want to feel heard - so listen! Additionally, helping them to focus on their “Why” of what they do is critical. “Every therapist has a purpose,” said Austin Afshar of SPEAR Physical Therapy. “If you can help them to be mindful of their “Why” they got into being a therapist, it goes a long way. They need to remember their work truly matters. For instance, their intervention might enable a patient to dance at their child’s wedding!”
  • Leveraging technology: Be a step ahead of your competition by offering the latest cutting-edge technology.
    • PredictionHealth’s Sidekick offers therapists AI-powered scribing technology to cut down their documentation time by up to 75%. Removing 75% of the single biggest pain point for therapists is a winning formula for encouraging retention.
    • PredictionHealth’s Practice Intel analytics platform offers Time to Sign Off analysis to uncover therapists completing notes on the weekends and late at night, and Over Documentation analysis uncovers which therapists are overburdening themselves due to unrealistic standards in documentation length. Get ahead of the burnout with this analysis and intervene before they’re walking away from you.    
  • Investing in Training: “Investing in Clinic Director leadership development is extremely important,” said Jeff Hay of Highbar. “How to coach, how to have direct conversations, lead a busy team, provide appreciation are all things that can dramatically impact staff therapist retention.” Ongoing training and support for all employees can improve productivity and satisfaction, reducing the likelihood of turnover.
  • Streamlining the Hiring Process: Efficient processes reduce the vacancy period and help in quicker integration of new hires. Practice leaders must optimize their systems in this regard in every way possible. Having a strong digital presence through an engaging website and social media is particularly advantageous. 

In conclusion, the costs associated with replacing a physical therapist involve a myriad of direct and indirect expenses. Physical therapy practices can benefit significantly by understanding these costs in depth and implementing strategies aimed at reducing turnover and promoting an empowered and engaged workforce.

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Topics: Company Culture, Technology, Physical Therapists, Artificial Intelligence, Providers

Andrew Schaffer

Andrew Schaffer

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