How to Prepare for Physician Retirements

More than two-thirds of healthcare organizations do not have succession plans for physician retirements.

Healthcare organizations should be bracing for a wave of physician retirements, according to a new white paper from Jackson Physician Search.

A report published by the Association of American Medical Colleges in 2022 found that nearly half of physicians were more than 55 in 2021. As a result, more than two of five of physicians will be at least 65 within the next 10 years.

"Even more staggering than that is we are seeing physicians choosing to retire early, due in part to burnout, the influence of the pandemic, reprioritizing lifestyle, and having the financial stability to retire earlier than they planned for. The retirement of physicians is going to result in a significant loss of clinical expertise and experience, which is going to have an impact on healthcare," says Helen Falkner, a regional vice president of recruiting at Jackson Physician Search.

The new white paper is based largely on a physician retirement survey that Jackson Physician Search conducted with physicians and administrators in November and December 2022. The survey has several key findings:

• While physicians believe six months notice of retirement is adequate, administrators prefer one to three years of notice.
   
• The majority of physicians plan to work part-time or contract somewhere else rather than fully retire. Most administrators believe retiring physicians are leaving medicine entirely.
   
• Burnout is the top reasons cited by physicians for retirement, but administrators believe age is the top reason for physician retirement.
   
• About 25% of physician survey respondents reported that COVID-19 had pushed them to want to retire early, and 60% of those still plan to do so.
   

• As early as age 50, some physicians are cutting back their working hours.
   
• When physicians were asked what factors would encourage them to delay full retirement, 58% said they would delay retirement if they could work part-time and 52% said they would delay retirement if they could have flexible schedules.
   
• More than two-thirds of healthcare organizations do not have succession plans for physician retirements.

The white paper has five key takeaways for healthcare organization administrators:

• Start retirement conversations with physicians when they reach age 55
   
• Conduct physician retention efforts and burnout mitigation
   
• As physicians approach retirement age, give them several options to ease workload and improve work circumstances
   
• Consider ways to keep aging physicians engaged such as teaching opportunities
   
• Adapt to the needs of younger physicians by revising job descriptions and compensation packages

Physician retention plans

There are five primary elements of physician retention plans, Falkner says:

• "It is important to note that retention starts at recruitment. The number one indicator of turnover is poor cultural fit. So, for organizations as they are interviewing, if the organization has a strong culture, low turnover, and good communication between physicians and management, those are elements that should be emphasized in the hiring and recruitment process. Organizations should be hiring for fit versus hiring to fill positions. Hiring for fit is going to be one of the best ways that organizations can have a good chance at retaining."

• "Organizations should provide personal growth opportunities for physicians. Burnout is at an all-time high, and it is critical as an administrator to keep a pulse on the physician staff and offer opportunities to explore things outside of the physicians' day-to-day clinical responsibilities such as medical mission work and volunteer work."
   

• "Just as important as personal growth opportunities are career advancement opportunities such as clinical or administrative leadership positions. Again, it comes back to knowing your physician staff—the better you know your staff, the better you will be able to find ways for those physicians to challenge themselves."
   

• "Administrators need to provide their physicians with a good work-life balance. It is important to have open conversations with physicians and to take a collaborative approach so that you can develop mechanisms that will help physicians better achieve work-life balance. Tied into work-life balance is encouraging time off. It can help physicians deal with the pressures of their job and allows them to spend more time with family."
   

• "The level of compensation is always going to play a role in your ability to retain physicians. For physicians, many of them are saddled with significant debt, and any effort to boost compensation will help you retain physicians. For those organizations offering career advancement opportunities, that is a great way to offer more compensation for a physician who steps into an administrative or blended administrative-clinical role."

Holding retirement conversations

When administrators initiate retirement conversations with physicians, the best advice is to approach the conversation early in an open and transparent way, then the conversation should be revisited often, says Tara Osseck, a regional vice president of recruiting at Jackson Physician Search.

"Administrators need to give physicians the space and opportunity to talk about their retirement plans in an environment that is not threatening. You do not want the physician to feel the organization is trying to push them out the door. Administrators should provide assurance that the physician is not going to be sidelined and offer the opportunity to work part-time," she says.

Understanding a physician's retirement motivations and plans post-retirement can help an administrator to offer options and, in certain circumstances, convince the physician to keep working in some capacity, Osseck says. "As physicians are eager to discuss and consider options to lighten their workload such as a reduced schedule, reduced patient load, and elimination of call, they also are eager to leave a legacy in some way. For many physicians, that may be in the form of teaching or mentorship, which can be an asset for an organization."

Succession planning

A crucial part of succession planning for retiring physicians is to share knowledge between the retiring physician and the new physician, Falkner says. "A successful physician succession plan includes the developmental processes and systems to facilitate the transfer of knowledge from the retiring physician and the new physician. That can involve creating documentation, sharing standard operating procedures, creating access to patient records, and encouraging communication and collaboration between the retiring physician and the new physician."

There are several other key factors in succession planning, she says:

• Goal setting: You need to identify the goals of your succession plan and make a business case for why it is important to your organization.
   
• Research and forecasting: Understanding the recruitment needs when a physician retires can include gathering data on your current physicians such as demographics and specialties. Data can help administrators create a timeline that estimates when physicians are likely to retire.
   
• Due diligence: Administrators should meet with stakeholders and develop job descriptions. Key stakeholders should include not just the retiring physician but also physicians who are remaining.
   
• Mentorship and leadership training: Administrators should provide opportunities for new physicians to ensure a smooth transition. This can involve pairing a new physician with an experienced physician, providing on-the-job training, and offering continuing education opportunities.
   
• Contingency planning: Even the best succession plan can have gaps. Ideally, you want to have a pipeline of candidates who are ready to work, but it is also important to have an established relationship with a locum tenens agency that can help to quickly fill openings in the short-term.