Healthcare organizations are still reeling from the aftershocks of a pandemic that exacerbated existing margin and physician burnout challenges. Now, in light of an increasingly difficult physician labor market, compounded by ever-growing patient demand,1 organizations face a vicious cycle of physician burnout and turnover that makes achieving their financial and strategic objectives tougher. To break this cycle, organizations have been looking to evolve their strategies to attract and retain physicians by focusing on the factors that influence their decisions to join and stay. Given that physician burnout has been well studied and documented, we focused our seventh US physician survey on understanding the root causes of turnover and the tactical interventions to attract and retain top talent in a competitive labor market. Accordingly, we recommend four areas organizations can prioritize: compensation and incentive structures, lifestyle needs and well-being, involvement in decision making, and staffing and support systems (exhibit). Organizations that use a portfolio of strategies that address the mindsets and needs of physicians, as laid out in this article, could start to boost physician attraction and retention and address their workforce supply-and-demand mismatch.
Redesign compensation and incentive structures
Despite rising patient demand and competition, market pressures have decreased the funding available for compensation: health system margins are declining,2 and the US Centers for Medicare & Medicaid Services reduced physician reimbursement by 4.5 percent in 2023, 3.4 percent in 2024, and has proposed another 2.9 percent reduction for 2025.3 Sixty-nine percent of respondents to our physician survey cite a desire for higher remuneration as influencing their decision to leave, highlighting the need for organizations to prioritize thoughtful redesign of compensation and incentive structures.
Align physician compensation with organizational strategy
Many healthcare organizations find it untenable to increase physician salaries across the board. To avoid disrupting entire salary bands, targeted solutions can be beneficial. This includes revisiting compensation models to better reflect the organization’s strategy for delivering the best care possible. While performance incentives are not novel conceptually, many organizations have not reconsidered physician compensation even after their strategy has changed. Whether operating under a fee-for-service or value-based system, physicians can be rewarded for aligning with productivity or cost-of-care measures, respectively, in addition to quality measures, with incremental incentives provided to top performers. Better performance-based incentive alignment that also advances an organization’s main goal of serving its patients could help attract and retain more motivated physicians, thereby enhancing organizational performance—which in turn can fund higher physician compensation.
Provide compensation education and performance tracking tools
Physicians often don’t fully understand the complexities of their compensation and incentive structure; common challenges include overly complex metrics, overemphasis on measures outside a physician’s control, and infrequent or even a lack of progress reports. In our survey, only 23 percent of physician respondents participating in risk-based contracts report a “very good understanding” of what is required to achieve contract goals. Without this understanding, even the most strategically aligned compensation structure cannot achieve its desired outcome, and organizations should invest in making expectations and targets clear to physicians.
Walk the talk on lifestyle and well-being
While aligning compensation with strategy is important to organizations, our survey reveals that just as many physicians consider balancing family needs and well-being as important to their decisions to leave. Organizations stand to benefit from finding flexible solutions that can accommodate both.
Balance clinical hours and compensation
Standard physician schedules have rigid clinical time requirements that don’t necessarily take productivity or output into account. Fifty-one percent of respondents to our physician survey say schedule flexibility is a key retention factor, so payment models tied to factors beyond total hours worked better empower physicians to achieve their preferred work–life balance. For example, productivity-based models can allow physicians to achieve their desired compensation through a higher mix of dedicated procedure hours versus total hours worked, especially with advanced practice providers (APPs) supporting patient appointments.
Promote schedule flexibility and virtual-care options
While flexible schedules are important to physicians, only 59 percent report that their workplaces are actively pursuing such enhancements. Some examples of organizations taking steps to support their physicians with scheduling include Baptist Health South Florida and University of Illinois Hospital & Health Sciences System. They implemented programs where hospitalists pair up as “schedule partners” and coordinate shift arrangements to allow physicians to adjust their hours, while also ensuring full coverage based on the organization’s needs.4 Software can also be used to similarly incorporate individual physician preferences into a schedule that works for the organization too. Ochsner Health reported a 30 percent improvement in physician satisfaction after implementing this type of tech-enabled scheduling solution.5 Telehealth is another tool that can offer physicians flexibility, while also meeting patient expectations.
Build a culture that addresses burnout
While most healthcare organizations would say they want to create a culture that values physicians, cultural norms that undervalue self-care are still common, and holistically supporting physicians’ wellness remains rare. A strong organizational culture that fosters appreciation and a sense of belonging among staff is key to increasing employee engagement, productivity, and performance.
In healthcare, strategies employed by Novant Health, for example, include enhancing access to mental health support and utilizing peer coaches and wellness champions.6 Nonmonetary rewards can also support holistic well-being. Stanford University School of Medicine conducted a time-banking pilot to address burnout and work–life balance.7 Participants earned credits they could use toward personal expenses like meals and babysitting, as well as organizational priorities such as grant writing, resulting in an 8 percent increase in job satisfaction, a 13 percent improvement in work–life balance, and a 1.3-times increase in grant funding compared with nonparticipants.8
The American Medical Association’s Joy in Medicine Health System Recognition Program endorses six competencies that help organizations reduce burnout. The number of health systems that the program recognizes more than tripled since its inaugural year in 2019, with 72 organizations recognized in 2023,9 although this is still less than 5 percent of eligible organizations, according to McKinsey analysis.
Ensure physician involvement on the right decisions
In our physician survey, 58 percent of respondents cite feeling unheard or unsupported at work, while 62 percent mention feelings of uncertainty or lack of control, as factors influencing their decision to leave. While it’s not realistic to have physicians’ input on every major decision, incorporating their feedback on strategic goals such as those related to clinical resource utilization can help ensure tactics are cognizant of the day-to-day realities—and challenges—of patient care.
Set up two-way communications for feedback
Understanding physicians’ priorities for an organization’s strategic decisions starts with structured, two-way feedback mechanisms. Today, organizations use various channels to collect physician input, including workforce surveys, focus groups, and direct one-on-one meetings. And methods to engage physicians in ongoing dialogue include multidisciplinary committees, task forces, and forums. While these channels exist at most organizations, they are not always optimally and consistently used as vehicles to obtain physician feedback that might inform planned organizational decisions or to communicate the rationale and benefits of confirmed decisions. Additionally, using these channels after the fact to share how physician input was incorporated is another critical step to help organizations build trust.
Invest in physician leadership development
A common failure mode seen in physician leadership programs is simply creating physician figureheads—that is, giving select physicians leadership titles but excluding them from some decisions that affect clinical care or physician well-being. Physicians interested in leadership roles should be properly armed with the skills that will allow them to clearly explain the needs of the physician workforce in administrative meetings, while also understanding the challenges that management faces. To more fully realize the benefits of physicians’ insights, organizations can proactively provide leadership development to strengthen the physician voice. Mayo Clinic, Cleveland Clinic, and Advocate Health Care are examples of organizations with such programs.
Deploy staffing and support systems
Fifty-seven and 56 percent of respondents to our physician survey cite insufficient level and quality of support staff, respectively, as influencing their decision to leave, and only 30 percent report their organization is providing administrative support for the tasks that physicians do not need to do alone. In analyzing how physicians spend their time, we identified activities that could be delegated to improve experience. On average, respondents report spending 27 percent of their clinical time on indirect patient care and the ability to delegate nearly 20 percent of total clinical time to nonphysician staff or technology.
Reimagine clinical workflows to enable top-of-license practice
Too often, practices use physician assistants and nurse practitioners as scribes instead of for clinical work that’s at the top of their license. Organizations can instead utilize APPs to support tasks such as patient care rounds and simple procedures or registered nurses, medical assistants, and certified nursing assistants to help with office procedures, clinical documentation, and straightforward patient questions when clinically appropriate. For this to effectively work, however, organizations must first partner with their clinicians to create a clear list of roles and responsibilities for each care team member. They must then train clinicians on any new in-scope activities. Finally, the new model should be reflected in daily workflows (for example, automatic routing of patient messages to the right team member instead of directly to their physician). Additionally, incentives should motivate physicians to direct a larger share of their responsibilities to others without concern that others receive the credit in productivity-based compensation models.
Equip physicians with technological support
Physicians may initially hesitate to embrace supportive technologies, since historically, electronic health records designed without their input increased administrative time and exacerbated physician burnout.10 To overcome this challenge, it is important that physicians have input on technology development and rollout. Implementing enabling technologies to minimize administrative tasks can not only improve physician experience but also free up more time for patient-facing care. This is an area where artificial intelligence is already being utilized—for example, ambient listening to support documentation.11
To bridge the growing gap between healthcare demand and physician supply, healthcare systems must ensure a compelling value proposition to meet the needs and preferences of today’s physician workforce. Our physician survey suggests four key areas of focus, and we encourage organizations to conduct their own internal analysis to better understand the specific pain points for their workforce and quickly implement the most impactful initiatives based on results. Organizations that do so are more likely to attract top talent and create an environment that makes physicians want to stay—in turn reducing turnover, improving care quality, and growing the organization to serve more patients.
Laura Medford-Davis, MD, is a partner in McKinsey’s Houston office, where Chelsea Snipes, MD, is a consultant; Rupal Malani, MD, is a senior partner in the Cleveland office; and Stephanie Sherline is a partner in the New Jersey office.
The authors wish to thank Eric Bochtler; Pieter Du Plessis, MD; and Vamsi Reddy, MD, for their contributions to this article.
This article was edited by Querida Anderson, a senior editor in the New York office.
1. “The Complexities of Physician Supply and Demand: Projections From 2021 to 2036” Washington, DC: AAMC, 2024.
2. “A look at hospital operating margins in the United States,” Definitive Healthcare, March 18, 2024.
3. “Calendar year (CY) 2023 Medicare physician fee schedule final rule,” Centers for Medicare & Medicaid Service, November 1, 2022; Calendar year (CY) 2024 Medicare physician fee schedule final rule,” Centers for Medicare & Medicaid Service, November 2, 2023; “Calendar year (CY) 2025 Medicare physician fee schedule proposed rule,” Centers for Medicare & Medicaid Services, July 10, 2024.
4. Edward Doyle, “Building flexibility into the schedule,” Today’s Hospitalist, May 2019.
5. “How Ochsner improved its scheduling and provided satisfaction with PerfectServe's Lightning Bolt solution,” Becker’s Hospital Review, August 1, 2022.
6. “Well-being and resiliency program aimed at professional burnout,” Novant Health Foundation, September 10, 2021.
7. Magali Fassiotto et al., “An integrated career coaching and time-banking system promoting flexibility, wellness, and success: A pilot program at Stanford University School of Medicine, 2018, Academic Medicine, Volume 93, Number 6.
8. Magali Fassiotto et al., “An integrated career coaching and time-banking system promoting flexibility, wellness, and success: A pilot program at Stanford University School of Medicine, 2018, Academic Medicine, Volume 93, Number 6.
9. Joy in Medicine Health System Roadmap, American Medical Association, 2023; “AMA announces 2023 Joy in Medicine recognized organizations,” American Medical Association press release, October 3, 2023.
10. Kelly J. Thomas Craig et al., “The burden of the digital environment: a systematic review on organization-directed workplace interventions to mitigate physician burnout,” 2023, Journal of the American Medical Informatics Association, Volume 28, Number 5.
11. Tyler Haberle et al., “The impact of nuance DAX ambient listening AI documentation: a cohort study,” 2024, Journal of the American Medical Informatics Association, Volume 31, Number 4.