Lower Mortality, Higher Patient Satisfaction Starts with Turnover

Philip Betbeze, for HealthLeaders Media , July 9, 2010

"What they tell you (in an exit interview) is not necessarily why they leave," he says. "They really leave because of their boss. Either they don't have a good relationship with their boss or they're not developed. All of this stuff, a CEO can control."

That suggests that organizations with high turnover in the ranks need to work on leader skills and most importantly, hold managers accountable for unacceptably high turnover rates. CEOs lacking motivation to address this issue in an urgent manner, he says, should develop a financial impact statement. Though it encompasses a wide variety of organizations, Studer Group's data suggest that every 1% reduction in turnover saves direct costs of $250,000 and $500,000 in indirect costs.

Pat Jordan, chief operating officer at Newton-Wellesley Hospital in Newton, MA, part of Partners Healthcare System, helped derive some of the data for those cost estimates, and says his CFO validated it.

"For us, the fundamental understanding is that [turnover] costs money and hurts quality and patient and employee satisfaction," Jordan said. Jill Fuller, CEO of Prairie Lakes Health System in Watertown, SD, says high turnover might be the CEO's highest priority, because of all the important facets of the organization that it touches.

"We had high turnover at one time and we had to change our work environment. HR doesn't do that by themselves. You make your organization a place where people want to work."

Prairie Lakes, a relatively short distance from Sioux Falls, a much larger city, had an unacceptably high 22% annual turnover rate in 2002. "We just compared ourselves to our peer group in South Dakota. Our turnover was 5.8% in 2008 vs. 18% for our peer group," Fuller said. "So that tells us that our good results are not just a result from the poor economy."

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