Employee Experience
Code Red: What If Doctors Aren’t The Problem?
The most expensive person in the room is not the physician. It's the one who replaces them after they leave.
March 23, 2026
There’s a real estate adage: the most expensive house on the block is best avoided. Physicians have taken on a similar reputation in health systems, seen as expensive to obtain, expensive to retain, expensive to credential, and—you guessed it—expensive to manage. Beyond the C-suite, they’re often the priciest staffers in the building.
But what’s even more expensive is replacing them. Holes in the physician workforce lead to lost revenue as a result of vacant roles; those holes are filled with locums, who are extraordinarily expensive, starting at around 150% of the price of full-time workers. When doctors leave, the effect ripples through the staff. “Nurses have to learn all the new ways of doing things for the new doctor,” says former registered nurse Kae Robertson, senior client partner in the healthcare practice at Korn Ferry. All of the doctors’ familiar short-hand mumbles and hand waves disappear, creating more opportunity for miscommunications, more work for support staff, and greater risk to patients.
The real estate analogy is instructive. Because do savvy real estate investors actually avoid the spendiest properties on a block? No. They ask, How do I generate the best return? They figure out how to best leverage that property. “Physicians really do need to be viewed as an asset and not a liability,” says Dan Stech, senior client partner in the healthcare consulting practice at Korn Ferry.
Physicians are, in fact, cash machines. A physician might cost $250,000—$500,000 in annual compensation, and bring in several times that in revenue alone—and that’s just the tip of the iceberg: physicians also generate scores of weekly orders for labs, imaging and prescriptions, plus referrals to specialists within the system, each of which generates its own revenue stream, in addition to hospital admissions, which can generate enormous facility charges, not to mention all the friends and family that satisfied patients bring into the system. “The cost of physicians should not be your biggest worry,” says Robertson.
The question, then, is how to invest in physicians to make them more valuable to the system, advises Li Ern Chen M.D., market leader in the physician workforce solutions practice at Korn Ferry. “That concept isn’t intuitive at first blush, but once you describe it, it fully makes sense.” Gallup figures suggest that a fully engaged physician workforce is 26% more productive than less engaged counterparts, which amounts to revenues of nearly half a million per physician per year, on average. “That’s compelling,” says Jim Vincoli, vice president for client solutions in the global healthcare practice at Korn Ferry. “A half-million dollars per physician annually isn’t a rounding error. It’s a mandate. We need to spend more time making sure this workforce is more engaged.”
Much of the solution comes in who is overseeing physician engagement. Organizations typically delegate these issues to HR, which is a mistake, says Mitul Modi, senior client partner for global healthcare services at Korn Ferry, because these are key bottom line issues, and should be handled in the offices of the CHRO, CMO and CEO. “It’s not exclusively a CHRO problem,” he says.
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