Why hospitals need a new workforce strategy

Hospitals today contend with unpredictable financial pressures and persistent physician shortages, even as healthcare represents $4.8 trillion and 17.6% of the U.S. GDP.² Many organizations find that outdated staffing models can’t keep pace with the rapid evolution of clinical roles and technology. The challenge of recruiting and retaining skilled physicians grows more complex as patient needs shift and care delivery becomes more specialized.

The consequences of staffing instability are significant. When a physician leaves, hospitals can lose between $500,000 and $1 million per departure, impacting both budgets and patient care.³ Nearly half of physicians report feeling burnt out, which can lead to higher turnover, reduced quality, and lower patient satisfaction.⁴ These realities make it essential for hospitals to rethink how they recruit, retain, and support their physician teams to safeguard care quality and ensure long-term stability.

Hospitals shift toward agility as physician staffing pressures mount

Across the nation, hospital administrators are rethinking how they manage physician teams in the face of mounting workforce pressures. The days of relying solely on traditional staffing formulas are fading, replaced with a new emphasis on flexibility and rapid response.

The complexities of the physician workforce demand technologies built with the physician in mind, first. To bridge critical care gaps, health systems need to invest in technology that enables a level of visibility and optimization that helps manage, predict, and support moving resources into the right place at the right time. As Scott Boecker, chief growth officer at CHG Healthcare, observes, “This helps shift the labor conversation from cost-cutting to emphasizing the value the right provider brings to the right moment.”

Temporary physicians, also known as locum tenens, have become a strategic tool for many executives. About 40% of hospital leaders use locums to address spikes in patient demand, while others rely on them to maintain services during transitions or supplement staff during peak periods.⁵ The financial impact is significant: Losing a single primary care physician can mean $900,000 in lost annual revenue, underscoring the urgency of smarter workforce planning.⁶

Engagement drives hospital performance and physician retention

While operational agility remains essential, hospital leaders increasingly recognize that physician engagement drives the health of their organizations. Many doctors point to administrative overload, limited influence over workplace decisions, and a lack of meaningful collaboration with leadership as key sources of frustration.

As a result, hospitals are shifting their approach. Leadership teams should prioritize programs to give physicians a stronger voice in shaping clinical workflows and organizational priorities. Initiatives such as shared governance, regular feedback sessions, and transparent communication channels aim to rebuild trust and foster a sense of partnership.

The impact of these engagement efforts is measurable. Hospitals that invest in physician-centered cultures report lower turnover and improved financial results. Leslie Snavely, president and CEO of CHG Healthcare, sees a direct link. She explained, “We’ve seen firsthand that resilient, physician-centered systems have stronger financial performance. Our goal is to redefine how staffing supports the broader mission of healthcare.”

Parting thoughts

Building a resilient physician workforce calls for both decisive action and ongoing reflection. Leaders who champion flexibility and physician engagement set the stage for stronger teams and better outcomes, but lasting transformation requires a broader strategy — one that also embraces technology to expand workforce access, streamline workflows, and strengthen connections across the care continuum.

To learn more about the other imperatives and practical steps for future-ready care, check out the full report.

Advisory Board's physician-related resources

•  Our take: Give physicians the autonomy, time, and support to be both doctors and people
• Gaining an edge on the competition: The key to winning and retaining physician talent.
• 5 ongoing challenges of the workforce crisis — and what to do about them
• How technology can help solve the workforce crisis
• How to prevent a primary care shortage

Endnotes

1. New AAMC Report Shows Continuing Projected Physician Shortage. AAMC. March 21, 2024.
2. The Centers for Medicare & Medicaid Services. National Health Expenditure Projections 2024-2033. Accessed January 12, 2026.  
3. Jeppson J, Anderson J. Clinician Turnover 2024: Stemming the Rising Tide. KLAS Research. December 3, 2024.
4. Berg S. Physician burnout rate drops below 50% for first time in 4 years. AMA. July 2, 2024.
5. 2025 State of Locum Tenens Report. CHG Healthcare. Accessed January 12, 2026.  
6. The real cost of vacancies and provider turnover. Weatherby Healthcare. Accessed January 12, 2026.

Since founding the locum tenens industry in 1979, CHG Healthcare has been powerfully serving the healthcare workforce to make a difference in human lives.  Through their dynamic partnerships, CHG Healthcare provides temporary and permanent placement of healthcare providers and helps clients build a more sustainable healthcare workforce. Learn more here.