A wave of physician retirements is coming, and most healthcare organizations are not prepared. According to a 2022 report from AAMC, 46.7% of physicians were age 55 or older in 2021. This means two in five will reach traditional retirement age in the next eight years. Beyond age, rising physician burnout is also impacting the volume of retirements. In a newly released Physician Retirement Study from Jackson Physician Search, one in four physicians said they expect burnout will be the primary reason they choose to retire. Between a disproportionate number of physicians reaching retirement age, and burnout causing even younger physicians to retire, the industry must be ready for the impact of these departures.
The new study from Jackson Physician Search reveals that organizations are not as prepared as needed. Just one in four administrators reported having a succession plan to ease the transition when a physician leaves. Succession planning is a must, but there are other actions administrators can take in response to a physician announcing his or her intention to retire. Here we’ll discuss four things to do when a physician initiates a retirement conversation.
1. Express Support for the Physician’s Desire to Retire
Physicians put in years of training followed by decades of service to patients. When they feel ready to retire, they should not be made to feel as if they are letting anyone down. Administrators should express gratitude for all they have done up to this point and support for whichever path they plan to follow next.
2. Ask Questions About Physician Retirement Motivation
Once you’ve expressed your gratitude and offered support, it’s okay to ask questions about what is motivating them to retire now. Chances are, your assumptions are incorrect. According to the new study, 50% of administrators think age is the primary reason physicians retire, but just 12% of physicians say they expect age to be the driving factor. In fact, the most common reason physicians predict they will retire is burnout (24%), followed by lifestyle (23%) and achieving financial stability (22%). The only way for administrators to know for sure what is behind the decision is to ask.
Have they reached a financial status where they no longer have to work? Has their age or a health event made them realize they don’t want to spend their golden years in the clinic? If either is motivating the decision, ask them what they plan to do in retirement. Will they practice medicine in any capacity? Knowing their motivation can inform the options you propose for making (and perhaps prolonging) the transition.
On the other hand, if burnout and exhaustion are driving the decision, ask more questions to learn the exact pain points. This will inform the options you provide as you discuss the transition. If you can resolve the issues causing burnout, they may be willing to stay in some capacity or at least prolong the transition.
3. Discuss the Physician Retirement Timeline
Before you attempt to address their motivations with options, ask them what timeline they envision for their retirement. According to the aforementioned study from Jackson Physician Search, a majority of physicians think providing notice of six months or less is ample time. In fact, 41% say three months or less is acceptable. Nearly half of the administrators (47%), however, prefer one to three years.
Of course, depending on location and specialty, it could take a year or more to recruit and onboard a replacement. That said, the longer the physician’s transition to full retirement, the better. Don’t pressure the physician to stay, but rather, provide him or her with options that will address the reasons for retiring and highlight the benefits of easing into it over an extended period of time.
4. Provide Options to Prolong the Transition
According to this new study, just 12% of physicians intend to retire and stop working altogether. Nearly half (43%) of physicians hope to reduce their work hours in the years leading up to retirement, and a third of physicians plan to retire from their current job and work locum tenens or work part- or full-time with another organization.
So the question becomes if these physicians want to continue working in some capacity, what options can you provide to encourage them to continue working at your organization? Most administrators are already open to part-time hours and schedule flexibility, and nearly half are willing to reduce or eliminate call duties for retiring physicians. These options are appealing to physicians regardless of their motivation for retiring. If due to age and financial status, part-time and flexible schedules allow them to step back without stepping away completely. If the retiring physicians are driven by burnout, fewer hours likely equates to reduced stress.
When physicians in the study were asked what else might persuade them to stay on with their employers, 21% said the opportunity to teach or mentor, and 30% said a retention bonus. One in four said the chance to work locum tenens would be of interest. This may be especially appealing to those retiring due to age, financial status, or even pressure from a spouse as it addresses fears about boredom and losing a sense of purpose (which 39% and 44% of respondents say are top concerns about retirement, respectively).
Communication is Key
When a physician announces his or her intention to retire, it is essential to follow the steps outlined here. However, in an ideal situation, you are not surprised by a physician’s retirement announcement, and you already know the answers to the questions mentioned here because you initiated the conversation long before retirement was a reality. If you create an environment that fosters open communication on the topic, you will have a clear picture of where physicians are in terms of thinking about retirement and even how they envision transitioning.
Initiate conversations about retirement with physicians starting at age 55. Start the conversation early and normalize talking about their retirement plans. When the time grows nearer, the talks should be more focused on the how, when, and why. Knowing their true retirement motivations and post-retirement plans will help you offer options to persuade the physician to keep working in some capacity — which is, of course, the best way to ensure continuity of care as you plan for the future.
Are you recruiting to replace a retiring physician or proactively recruiting as part of your succession plan? The team at Jackson Physician Search has the experience and expertise to advise and accelerate your efforts. Reach out today to learn more.