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What’s the Average Cost Per Hire for Physicians?

The costs of hiring encompass more than just a physician’s salary. Several factors add to the overall cost of finding good talent. This is particularly true for knowledge workers in the healthcare field. The competition is intense, particularly for doctors, and it remains a candidate’s market, where healthcare organizations work hard to sweeten their compensation packages to find and land top talent. Given all this competition and the difficulties inherent in finding skilled physicians, you may wonder what the real cost of hiring doctors is today. In this blog, we’ll examine the current market and try to quantify the true costs of physician recruiting.

What Makes Up the Cost of Physician Hiring?

Physicians are obviously revenue generators, so the impact of even one physician vacancy can reverberate across a healthcare facility. The cost of recruiting these revenue generators includes many factors such as:

  • The cost of the recruiter’s time, assuming you have a dedicated team. This includes salary and benefits.
  • The cost of advertising, whether on an online job board or at a physician hiring event.
  • Fees for locum tenens during the hiring process. This expense increases, of course, the longer your time to hire.
  • Staffing agency fees if you outsource. (Note these fees typically including advertising for the role along with many other services)
  • Candidate interview expenses.
  • The time spent on candidate interviewing by subject matter experts.
  • Time spent onboarding and credentialing.
  • Candidate relocation expenses (which may fall under salary and benefit overhead).
  • And more.

You will note that none of the preceding bullets mentioned the actual costs associated with actually hiring the doctor. There are a few resources available that seek to define these costs. One example spells out the potential costs associated with hiring one family medicine doctor:

  • Primary care physician salary $ 241,000
  • Benefits or perks $   50,000
  • Agency or in-house recruiter $   25,000
  • Candidate sourcing $   10,000
  • Candidate/spouse interview $     3,000
  • Relocation expenses $   10,000
  • Marketing and incidentals $     3,000

TOTAL                $ 342,000

This example does not include hiring bonuses. For example, the American Academy of Family Physicians (AAFP) reports signing bonuses for primary care doctors average $25,100. The example also doesn’t include volume-based production bonuses. It may or may not include the cost of continuing education. It also doesn’t mention malpractice insurance but given that it’s so high—it’s worth mentioning. Other areas not included in the costs of hiring doctors include:

  • Office space.
  • Office supplies, software, and medical supplies.

Salary remains the biggest chunk of the hiring overhead pie, of course. Location and experience are relevant factors in determining competitive salaries. How busy the doctor will be and the level of trauma at the hospital will determine the competitive fair market rate. But competitors will drive up the negotiation process. That’s why you need a skilled negotiator on your side.

UHC Solutions understands the competitive nature of the market. We help FQHCs source clinical and administrative talent. Then we help you remain competitive during the negotiation process to help you land the best talent. Contact our expert team today.


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