New research from Jackson Physician Search reveals physicians may not be retiring for the reasons you think. According to the results of a physician retirement survey released March 2023, 50% of administrator respondents believe age is the primary catalyst for physician retirement, but only 12% of physicians say this is true. Instead, the most commonly cited reason for retiring, noted by 24% of physicians, is burnout.
In March, at MGMA’s Medical Practice Excellence: Financial and Operations Conference, I revealed this and other findings from the survey, as documented in the report, Preparing for the Coming Wave of Physician Retirements. Though not everyone in the audience was surprised, it’s fair to say administrators don’t always recognize the significant role that burnout plays in physician retirement. The good news is that this knowledge, along with other insights from the report, can help administrators address the “why” and accommodate the “how” of physician retirement, with the goal of keeping physicians in the workforce longer and minimizing the impact when they do, eventually, retire.
First and Foremost, Prioritize Succession Planning
With burnout on the rise and nearly half of physicians reaching retirement age in the next decade, many healthcare leaders are predicting a spike in physician retirements. In an effort to lessen the impact of these retirements, experts say healthcare organizations should implement succession plans that forecast potential physician retirements and detail the actions required when a physician gives notice. However, despite the demonstrated value of succession planning, the latest research found only 26% of healthcare administrators have a formal succession plan at their organizations.
Succession planning is critical, but there are additional steps organizations can take to reduce the impact of physician retirements. These insights into why physicians retire, along with new data on how they hope to transition to retirement, will allow administrators to better meet the needs of physicians as they approach retirement, and hopefully, keep them in the workforce a little longer.
The Role of Burnout in Physician Retirements
We know from other research that burnout is on the rise among physicians. In a 2022 study, 65% of physicians reported having feelings of burnout, compared to 61% who reported feeling burned out in the 2021 survey. Of those who reported feelings of burnout in 2022, 75% said their burnout was worse than it had been the previous year.
Burnout has long plagued physicians, and of course, the COVID-19 pandemic added fuel to the fire, but will COVID-19 actually cause physicians to retire early? Among our survey respondents, 24% said COVID-19 had caused them to plan an early retirement. However, with the worst of the pandemic now behind us, 40% of those physicians say they are no longer planning an early exit. The other 60% are still planning to retire early, and citing COVID-induced burnout as the cause.
Mitigate Burnout to Delay Physician Retirements
No matter what is fueling a physician’s burnout, if organizations can successfully address it, those approaching retirement age will be less likely to take an early exit. Of course, the causes of burnout are complex, and there are no simple solutions. However, improving communication between physicians and management is an important first step.
Start by asking physicians what they need to feel happier at work and take steps to implement some of the changes they suggest whether it’s reducing the administrative burden, hiring more support staff, or offering more flexibility. If leaders can take significant steps towards decreasing burnout, physician retention will improve among physicians of all ages, including those approaching retirement age.
Improve Communication Around Physician Retirement
Our past research shows the most important aspects of physician job satisfaction, even above compensation, is open communication with management. Open, two-way communication is certainly critical for gathering information about potential physician retirements, but who should start the conversation? According to the new study, most physicians and administrators think it is the physician’s responsibility. However, the research also found that if administrators wait for physicians to bring it up, they are likely to receive six months notice or less.
In light of this, we advise administrators to initiate casual retirement conversations with physicians by age 55 and normalize talking about retirement plans. As physicians begin to think more seriously about retirement, the talks should focus more on the why, when, and how.
Provide Options to Slow Physician Retirement Transitions
Another interesting finding from the Jackson Physician Search report concerns how physicians expect to retire. The traditional path of announcing a retirement and then hanging up the white coat completely is no longer the norm. In fact, just 12% physician respondents intend to set a retirement date and stop working completely. Instead, nearly half (43%) of physicians want to reduce their work hours in the years leading up to retirement, while a third of physicians plan to retire from their current job and work part- or full-time for another organization.
If these physicians want to continue working in some capacity, what options can administrators provide to encourage retiring physicians to continue working for their current employers? Part-time hours and schedule flexibility are obvious solutions, and a majority of administrators responding to the survey said they are willing to offer these options. Nearly half of administrators said they are willing to reduce or eliminate call duties for retiring physicians as well. These options allow retiring physicians to step back without stepping away completely, reducing the burden that a vacancy may place on other physicians and staff and alleviating some of the urgency to find a replacement. The administrator can focus on finding a good, long-term fit rather than feeling pressured to simply fill the job.
A Multi-Faceted Approach to Preparing for Physician Retirements
Succession planning is still the most impactful thing administrators can do to prepare for the coming wave of physician retirements, however, administrators should take a multi-faceted approach that addresses physicians’ motivations and post-retirement plans. This insight will help administrators make adjustments and provide options to accommodate the needs of retiring physicians while minimizing the impact of their exits and preserving continuity of care for patient communities.
Download the full report, Preparing for the Coming Wave of Physician Retirements, on the Jackson Physician Search website.
With more than 15 years of experience in the healthcare industry, Tara Osseck specializes in matching healthcare organizations with physicians who are a strong fit for the role and the culture. Her healthcare career began as a physician liaison and quickly expanded to include physician recruitment, strategic planning, and business development working for various hospitals throughout St. Louis, Missouri and Memphis, Tennessee. Osseck is based in St. Louis, leading a team of recruiters for the firm’s Midwest division, placing providers across the Midwest and Upper Midwest regions. She earned a bachelor’s degree from Truman State University and a master’s degree in health care administration and management from The University of Memphis.
With more than 15 years of experience in the healthcare industry, Tara Osseck specializes in matching healthcare organizations with physicians who are a strong fit for the role and the culture. Her healthcare career began as a physician liaison and quickly expanded to include physician recruitment, strategic planning, and business development. Working for various hospitals throughout Memphis, Tennessee, and St. Louis, Missouri, Osseck recruits and leads a team of recruiters from the firm’s St. Louis office. She earned a bachelor's degree from Truman State University and a master's degree in health care administration and management from The University of Memphis.