Early Retirements Stay High, Threaten Group and Hospital Staffing
PCR interviewed Stephen Thomas, vice president for the western region of Merritt Hawkins & Associates, a Dallas based physician recruiting firm, about the growing impact of early physician retirements.
How is early physician retirement affecting the recruitment market and the delivery of medical services? Retirements of clinical physicians well before the traditional age of 65 curtail the supply of physicians, tighten the recruitment market in many specialties, and threaten the continuity of care and financial stability of many practices and hospitals.
It’s been a year since the Merritt Hawkins study on early retirements. What’s the situation now? The survey’s results — 48% of practicing physicians over 50 years old plan to retire in the next three years or find work in non clinical settings, and an other 26% plan to cut their clinical workloads — may have painted too stark a picture. Those would be crisis numbers; the market is generally tight, but not in crisis. And occasionally, you meet the 62 year old physician who insists he will practice another 10 years.
But make no mistake about it: early retirements are still a key part of the physician supply landscape. All the trends noted in the survey — more early retirements, more workloads below full time, and more experienced physicians seeking non clinical work — are continuing and probably growing. The concern about being able to hire enough physicians now and in the future is greater now in the minds of hospital and group practice managers than it was in the recent past.
Can you give me an example? A multi hospital chain is looking at 1,000 to 1,300 physician vacancies over the next five years, in every specialty and many geographic areas. These are not all staff physicians. Often they are in private practice, serving on the hospitals’ medical staffs.
Do hospitals assist physician-owned groups with recruiting? Hospitals have to assure the future of their medical staff skills and their patient flow. Thus, particularly in cardiology and heart surgery — which for many hospitals are the largest specialty source of revenues and profits — some hospitals will pay the recruiting fees and guarantee the first year salary of some new physicians.
How do hospitals and groups gauge and minimize their physician losses? Should they be asking, “Are you leaving?” and “How can we make your situation better?” Those are always great questions to ask, but how often are they raised in any work place? Physicians in private practice who serve on hospital staffs in their specialties are reluctant to tell the hospitals their retirement plans because knowledge of those plans in their local medical communities could easily cause referrals to dry up. There also are trust issues; the physician may simply refuse to level with the hospital or practice administrator:
The precise timing of retirement is hard to predict. Many physicians may change their plans, and firmly decide to retire only shortly before actually taking that action. Physicians, like almost everyone else, want to control the timing and circumstances of their retirement.
A hospital or group can forecast local demand for a given specialty’s services by studying data on likely future population, physician to population ratio, referral patterns, age of local population, and PCP surveys of what specialties are most needed in their area.
(Ed. note: For state and regional demand forecasts by specialty and major medical condition over the next five years, see AIS’s Demand for Health Care Services series. Call 1-800 521 4323.)
Has the stock market downturn slowed early retirement plans? I believe so, although I have no survey evidence. If your nest egg was worth $1 million, and now it’s worth half that, you may well reconsider leaving your main income behind to face an extended period living on investments.
Are semi-retirements increasing? How does that affect physician supply? People are increasingly stepping down in stages rather than all at once, as was most common in the past. If two people go to half time, that’s the same as one full retirement. But that said, going part time raises questions of not taking call coverage and Medicaid and Medicare patients for whom reimbursement is often lower: The remaining full time physicians may say “get in or get off” if the part timer is “cherry picking.”
Many new and recent physicians are working part-time, or limiting themselves to 40 hours instead of the 50-to-80 that was often seen in years before. Does that add to the problem? Yes, it means that a given new or recent physician will solve less of the supply problem than would have been the case years ago.
Take the example of radiology Several factors are working there: the extreme shortage the last few years of diagnostic radiologists available to hire; the desire of young physicians for vacation time; advances in imaging; and the preference of many practices to resolve market imbalances in ways other than raising pay levels. The result has been standard offers of eight to ten weeks of vacation to diagnostic radiologists right out of residency, with some offers up to 13 weeks, compared to three weeks vacation and a week of CME that’s still standard in many specialties. At 13 weeks vacation, you have to hire four radiologists to fill three vacancies.
Contact Thomas at (949) 757 7750 or email@example.com.
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