The latest physician shortage projections from the Association of American Medical Colleges are out, and while they show marginal improvement, the numbers are still concerning. Some of the most alarming data concerns the aging physician workforce. The newest report shows that 20% of the physician workforce is over 65, and another 22% will reach 65 in the next decade. With nearly half of the physician workforce approaching or above traditional retirement age, healthcare administrators must find ways to manage the obstacles created by physician retirements happening now and in the near future.
We’ve discussed how leaders can respond to a physician’s retirement announcement to ease the aftermath, but a more proactive approach involving industry research, internal surveys, and open communication will allow you to forecast retirements so you can minimize the impact. Keep reading to learn why forecasting physician retirements is so important and the three steps involved in forecasting.
The Importance of Forecasting Physician Retirements
Healthcare administrators can be the most proactive in easing the impact of physician retirements by developing a succession plan with a forecasting system to better prepare for the eventual reality. This initial stage of succession planning may seem obvious, yet most organizations don’t have a physician succession plan in place. According to the latest physician retirement research from Jackson Physician Search, 69% of administrators reported that their organizations do not have formal succession plans.
Without succession plans, administrators rely on the hope that retiring physicians will provide ample notice, ideally allowing enough time to fill the vacancy before the physician retires. However, the aforementioned retirement research found a significant discrepancy between administrators and physicians concerning how much notice is necessary. Administrators prefer to know that a physician plans to retire one to three years prior to their exit, while physicians generally think six months is more than enough notice. When you consider the amount of time it takes to find and hire a physician and the cost of a physician vacancy, the administrators’ preference is understandable.
Since leaders cannot rely on physicians to provide more than six months’ notice, they must take steps to forecast retirements. Leverage industry research, conduct surveys, ask questions, and generally open the lines of communication around the topic. Use the information you gather to periodically update your forecast of when and how many physicians will retire in the next two to five years. Of course, your projections will never be 100% accurate, but they will provide a guideline that allows you to plan for how many physicians you likely need to hire.
Step One: Research Industry Data on Physician Retirements, Turnover, and Retention
What is the average age of physician retirement? Which specialties have the highest number of physicians nearing retirement? What is the average time-to-fill in your market for the specialists you’ll need? The answers to these questions and other industry data points can help administrators make educated guesses about when physicians are most likely to retire and how much time it will take to replace them. The Association of American Medical Colleges provides detailed physician workforce data to answer many of these questions.
The aforementioned physician retirement report from Jackson Physician Search is also full of useful data points covering when, why, and how physicians tend to retire. For example, according to the research, administrators cited that the main driver for physician retirement was age (50%), and the second most common factor was lifestyle (15%). Physicians, on the other hand, cited burnout (24%) as the top reason, followed closely by lifestyle (23%) and achieving financial stability (22%).
Download the Physician Retirement Survey Results
In addition to physician retirement trends, administrators must consider the community’s needs and the organization’s plans for growth and then determine how the projected physician retirements will impact both. When there are inevitable retirement-related vacancies and the need for expansion, a dedicated physician recruitment partner can be a true asset in your organization’s physician recruitment journey. A physician recruitment partner allows your organization to connect with various top physicians catered to your organization and community’s needs so that everyone can move forward and adapt with a team they’re confident in.
Step Two: Conduct an Internal Survey to Estimate Physician Retirements
Gather data on the physicians currently on staff to understand their demographics, specialties, skill sets, and patient volumes. Use this internal data and your industry research to create a timeline that estimates the number of physicians likely to retire in each specialty for the foreseeable future. Industry data on physician retention can help you estimate other attrition as well.
The survey also presents an opportunity to ask physicians about job satisfaction. Invite physicians to share which issues contribute to their dissatisfaction and what they like most about working at the organization. Use this information to create a physician retention plan that addresses the issues causing dissatisfaction and strives to make physicians happier in their jobs and, therefore, more likely to delay retirement.
When there are inevitable retirement-related vacancies and the need for expansion, a dedicated physician recruitment partner can be a true asset in your organization’s physician recruitment journey. A physician recruitment partner allows your organization to connect with various top physicians catered to your organization and community’s needs so that everyone can move forward and adapt with a team they’re confident in.
Step Three: Normalize Talking About Physician Retirement Plans
When asked, 84% of physicians feel it is their responsibility to initiate the retirement conversation, but both physicians and administrators are uncomfortable initiating the conversation. If administrators want more time to plan, they must start talking about retirement much earlier.
We advise initiating a physician retirement conversation with every physician beginning at the age of 55. The discussion can be casual, as it simply attempts to gauge their short and long-term plans. Of course, their plans may evolve considerably in the years between 55 and 65. Still, by starting the conversation well in advance and revisiting it regularly, you will remove any awkwardness surrounding the topic.
The retirement conversation should be ongoing and involve questions about timing and how physicians envision making the transition to retirement. Surprisingly, only 12% of physicians indicated they were planning to retire fully, and almost 43% stated that they would like to reduce their hours during their final years.
Try to find ways to keep physicians working in some capacity. Whether it is an offer of flexible part-time hours, taking on telemedicine duties that can be managed around their schedule, or even non-clinical duties as available, make sure physicians have options that allow them to ease into retirement — and give you more time to plan. Express support for their desires and choices and encourage them to be open with you as their timelines and intentions change.
Conclusion
While no one can predict the exact number and timing of physician retirements, there are proven steps administrators can take to better prepare for retirements whenever they occur.
When forecasting retirements, leverage external research, survey internal physicians, and foster open communication. Other useful tactics include identifying a physician recruitment partner, creating a timeline, and making a contingency plan. By projecting physician retirements and detailing the actions required when a physician gives notice, the organization lessens the burden felt throughout the practice and ensures continuity of patient care.
Are you beginning to prepare for an incoming wave of physician retirements? The team at Jackson Physician Search has the experience and expertise to advise and accelerate your efforts. Reach out today to learn more.
