Physician retirements to hit health care industry hard

The physician shortage is already being felt in many parts of the country, and it is only going to get worse as more doctors retire. Yet a study from Jackson Physician Search shows a disconnect between why doctors say they are retiring and why administrators think they are retiring.

The study found that one in four physicians foresee burnout as the top driver in their retirement decisions. Yet, 50% of health care administrators think it’s age. The same study revealed that while economic concerns have delayed retirement for 38% of physicians, of the 24% who were planning to retire early due to COVID-19, 60% still plan to do so.

“It all comes down to the question of when – not if – the health care industry will feel the full impact of forthcoming physician retirements,” said Tony Stajduhar, president of Jackson Physician Search, in a statement. “Through this study, we wanted to understand physicians’ views on the topic, as well as readiness in terms of planning by the organizations for which physicians work. What we learned is that most physicians – regardless of age – say they will retire as soon as they are financially able. This points to a critical need: health care organizations must plan and start recruiting and retaining physicians differently than how many do so today.”

The study shows that administrators don’t fully understand the factors driving physicians to leave the workforce and are not fully prepared for the effects of physician retirements. According to the study, 69% of administrators say their organization doesn’t have a formal, written succession plan, yet 63% acknowledge that the typical amount of notice they receive from physicians is six months or less.

“When you consider that recruiting a culturally aligned physician in today’s competitive market often requires six to 12 months plus and costs $250,000 or more – including sourcing, relocation and sign-on bonus – greater emphasis on initiating the retirement discussion, as well as accommodating physicians’ desire to slowly transition from full-time work to retirement, is key to keeping them in the workforce longer,” said Stajduhar.

There is also a disconnect as to how much notice should be given when a physician decides to retire, with physicians indicating six months is enough time, while administrators prefer one to three years. But only 12% of physicians intend to set a retirement date and fully retire, yet administrators believe that physician will slow and then leave medicine entirely.

When it comes to Gen X physicians, nearly 60% say they plan to retire by age 60, and data shows they’re making a move in that direction with 12% of those aged 51-60 already working part-time.

For administrators looking to keep physicians in the workforce, the study found the most popular options that would cause them to delay full retirement: 58% said part-time status, 52% said flexible schedules, and 42% said reducing or eliminating on-call requirements.

“While our research shows the desired retirement age is trending younger, it also provides valuable insight on what can be done to encourage physicians to stay in the workforce in some capacity,” said Stajduhar. “Implementing full-scale retention and succession strategies are essential to lessening the impact of the coming wave of retirements.”