And What Leading Organizations Are Doing About It
Healthcare systems across the country face mounting financial pressure. One often overlooked source of waste is inefficient physician staffing. Many hospitals overspend millions annually by scheduling doctors based on tradition rather than actual patient needs.
This blog identifies seven common ways healthcare organizations waste money on physician coverage and highlights practical solutions that leading hospitals are implementing.
Let's explore these problems and solutions in detail.
Ways Healthcare Systems Overspend on Physician Coverage
1. Inefficient scheduling resulting in overstaffing during low-volume periods
Many hospitals staff the same number of doctors around the clock despite predictable drops in patient volume. This "better safe than sorry" approach stems from risk aversion rather than data-driven decision making. Administrators fear being understaffed during unexpected surges, so they maintain peak staffing levels constantly.
This fixed staffing creates significant waste across the system:
- Morning shifts often need full staffing for procedures and rounds
- Evening shifts typically require fewer physicians as planned care slows
- Night shifts may only see emergencies yet maintain full specialist coverage
- Weekend staffing mirrors weekdays despite lower elective procedure volume
The financial impact is substantial. Doctors receive full pay during periods of minimal activity. Specialists remain on-site during hours when their expertise is rarely needed. Meanwhile, the fixed costs of physician salaries and benefits continue regardless of patient care delivery.
2. Fragmented call coverage leading to duplicate physician payments
When call coverage splits across many departments, waste happens. Each specialty runs its own on-call system. No one talks to each other.
For example, a community hospital might pay surgeons to be on call for trauma cases. At the same time, they might pay separate on-call fees to orthopedic surgeons. Both might handle the same cases. Double coverage means double payments.
This fragmentation creates several issues:
- Different specialties cover the same types of cases
- Call payments vary widely between departments
- No central system exists to track who's actually needed
- Each department fights to maintain its separate call pay
Doctors negotiate call payments with different leaders. No one sees the full picture.
3. Reliance on expensive locum tenens physicians instead of optimizing existing staff
Healthcare systems turn to temporary docs (locums) when short-staffed. These hired guns cost 2-3 times more than regular staff.
Locums seem like quick fixes. Need coverage this weekend? Hire a locum. Need to fill a gap for three months? Locums to the rescue.
But this approach costs too much because:
- Locums charge premium rates plus travel and housing
- They need extra training on local systems
- Quality varies between temporary doctors
- Long-term use becomes an expensive habit
The money spent on repeated locum coverage could often pay for a permanent doctor's salary instead.
4. Misaligned compensation models that don't incentivize productivity
Many hospitals pay doctors fixed salaries no matter how many patients they see. This approach sounds fair but creates hidden costs.
Some compensation plans actually reward seeing fewer patients:
- Doctors paid purely on shift time have no financial reason to work efficiently
- Fixed annual salaries provide the same pay regardless of productivity
- Lack of volume targets allows wide variation in patients seen per hour
- No incentives exist for faster turnover or higher throughput
5. Lack of data-driven staffing decisions based on actual patient volumes and acuity
Healthcare organizations often make staffing decisions based on:
- Historical patterns ("we've always done it this way")
- Physician preferences
- Administrative convenience
- Perceived needs rather than measured demand
This intuition-based approach leads to costly mismatches between supply and demand.
Consider Health New Zealand's cautionary example from 2023, where managing a $16 billion budget with a single Excel spreadsheet led to budget overruns, with monthly financial reporting taking 12-15 days to consolidate and five days to analyze—critically slow for healthcare operations.
Even when hospitals want to make data-driven decisions, many lack sophisticated tracking systems. Their electronic health records capture clinical information but fail to translate it into staffing insights. The technology gap prevents them from seeing clear patterns in patient arrivals, treatment times, and workload intensity.
This staffing disconnect carries hidden costs.
During low-volume periods, physician time goes unused while salaries continue. During high-volume times, fewer doctors than needed leads to rushed care, burnout, and potential quality issues. Both scenarios waste money – either through direct overpayment or through the downstream costs of physician turnover and patient complications.
According to research by PMC, physician turnover costs can range from $88,000 to $1,000,000 per physician—typically 2-3 times their annual salary. Even nursing turnover, often resulting from poor scheduling and burnout, costs an average of $46,100 per staff registered nurse in the US. These avoidable costs accumulate silently across healthcare systems, draining resources that could otherwise improve patient care
6. Siloed specialty coverage without cross-department coordination
Hospital departments evolved as distinct kingdoms, each with its own chief, budget, and staffing plan. This structure made sense when medicine was simpler. Today, it drives unnecessary costs through redundant coverage.
The root cause lies in how academic medicine shaped hospital structure.
Medical training created specialists who identify strongly with their narrow field. Cardiologists align with other cardiologists. Neurologists bond with fellow neurologists. This tribalism, while creating excellence within specialties, builds walls between them.
Hospital governance reinforces these divisions.
Each department chair reports separately to administration. Chairs receive recognition and resources based on their department's performance. No incentive exists to share coverage or coordinate schedules with other departments. In fact, the opposite occurs - departments compete for limited hospital resources.
Financial accounting furthers the problem.
Hospitals track physician expenses by department rather than by function. This prevents leaders from seeing where coverage overlaps. The cardiology budget and critical care budget remain separate lines on financial reports. Nobody examines whether both departments maintain call coverage for similar emergencies during the same hours.
While everyone intends to provide excellent patient care, this siloed approach quietly drains resources. Hospital administrators focus on each department meeting its individual coverage requirements instead of optimizing physician deployment across the entire organization.
7. Inadequate technology utilization for remote consultations and telehealth
Many hospitals maintain expensive in-person physician coverage despite having telehealth tools. The technology sits underused while doctors drive between facilities for brief consultations.
Leadership hesitates to fully commit to virtual care models. They install telehealth systems but treat them as backup options rather than primary coverage solutions. This halfway approach means paying twice - once for the technology and again for traditional staffing patterns.
Rural hospitals particularly overspend by flying specialists in weekly rather than building robust telehealth programs. These facilities often pay premium rates for visiting specialists plus travel costs when many consultations could happen virtually.
5 ways healthcare organizations are solving physician coverage overspending problems
1. Data predicts patient flow for smarter scheduling
Leading hospitals now use patient flow data to build smarter schedules. They track exactly when patients arrive and how long treatments take. This data reveals clear patterns that show when more or fewer doctors are needed.
Health systems using this approach may find that:
- Mondays need more staffing than Fridays
- Winter months require different coverage than summer
- Even hour-by-hour patterns emerge within each day
- Certain holidays show predictable drops in volume
By mapping actual patient needs against physician hours, hospitals cut waste without hurting care quality. Software now alerts managers when schedules drift out of line with expected patient flow. The best systems adjust in real-time, calling in backup only when truly needed rather than "just in case."
The impact of this approach is substantial. A study conducted by the National Library of Medicine found that automated decision support dramatically improves scheduling efficiency—creating schedules in less than 1 hour compared to 10 hours with manual methods. This time savings allows administrative staff to focus on higher-value tasks rather than schedule management.
This shift from gut feelings to data-driven scheduling saves money while actually improving patient care. Doctors prefer it too – they spend less time waiting for patients and more time delivering care when it matters most.
2. APPs handle routine care. Doctors tackle complex cases
Healthcare systems can match provider skills to patient needs more effectively. Nurse practitioners and physician assistants (APPs) could handle predictable, routine cases. Doctors would focus only on complex patients who truly need their expertise.
Why this approach would work:
Most primary care visits don't require a physician's full training. Many emergency visits follow standard protocols. Routine follow-ups can be managed by well-trained APPs.
The cost difference is significant. APPs typically earn half what doctors make. When properly deployed, they can provide good care for many conditions at much lower cost.
Implementation requires clear workflows that direct patients to the right provider. Electronic systems can flag which cases need physician involvement versus APP care. Regular team huddles would ensure complex cases get physician attention while routine care moves efficiently.
An added benefit:
Patients often get more time with APPs, who can focus on education and prevention alongside treatment.
3. Centralized scheduling finds coverage gaps and overlaps
When hospitals bring all scheduling under one system, they quickly spot waste. Instead of each department handling its own calendar, a central team sees the full picture.
This approach reveals problems like:
- Two specialists on call for the same types of cases
- Gaps where no one is available for certain emergencies
- Departments scheduling too many doctors during quiet times
- Uneven workloads that burn out some doctors while others sit idle
Many hospitals now use scheduling software that shows all doctors across all departments on a single screen. Schedulers can spot patterns and make quick adjustments. They can also track which doctors actually get called in during their on-call hours.
The central team becomes experts at efficient scheduling. They learn which combinations of specialists work best for different situations. Unlike department managers who focus only on their own area, these schedulers optimize coverage across the entire hospital.
4. Software flags unnecessary overnight specialty coverage
Modern healthcare systems now use analytics to track when specialists actually provide care. These programs reveal surprising patterns:
- Many specialists receive no calls during most overnight shifts
- Certain specialties are rarely needed after 10 PM
- Some specialists could safely be on-call from home rather than in-house
- General physicians can handle many overnight issues with phone guidance
After collecting this data, hospitals can make smarter decisions. They might have certain specialists stop coverage at midnight when data shows they're rarely needed. Or they might switch from in-house to at-home call for specialties with few overnight emergencies.
This targeted approach maintains safety while cutting costs. When the software flags a specialty that hasn't had a late-night call in months, leaders can confidently adjust coverage without risking patient care.
5. Telehealth reduces the need for in-person specialists
Remote care technology now allows one doctor to cover multiple locations. Instead of each hospital hiring its own specialists, doctors can provide expert advice from anywhere.
Telehealth works especially well for:
- Night coverage when in-person visits are rare
- Rural hospitals that struggle to recruit specialists
- Quick second opinions that don't require physical examination
- Follow-up visits that mainly involve reviewing test results
The savings come from several directions. Hospitals need fewer specialists on payroll. Doctors spend less time traveling between facilities. And patients get faster access to expertise.
Some health systems create central hubs where specialists provide virtual coverage to several hospitals at once. During quiet hours, one neurologist might monitor stroke cases across an entire network instead of each hospital paying for its own coverage.
For this approach to work, hospitals need reliable technology, clear protocols for when to use telehealth, and regular training for both specialists and bedside staff.
How Kimedics Transforms Clinician Workforce Management
Kimedics is the all-in-one solution that healthcare operations leaders trust to solve these exact challenges. Our clinician-first workforce management platform integrates scheduling, credentialing, and financial operations into one seamless system, eliminating the silos that cause overspending.
Leading healthcare organizations have already discovered that Kimedics doesn't just cut costs – it transforms operations, improves clinician satisfaction, and ultimately enhances patient care.
If you're ready to stop overspending on clinician coverage, schedule a 10-minute consultation today.
