Whether you’ve come to the realization that it’s time to ride off into the sunset or if your practice has implemented an age-based retirement policy, here’s what you need to know – and do – to plan your exit.
Physician age-based policies
In all aspects of medicine, safety and patient care come first. With a growing number of physicians practicing medicine well after 60, the issue of competency becomes a concern. Healthcare organizations and medical groups can’t ignore the possibility of older physicians suffering from memory lapses and other medical issues that could bring harm to a patient or result in administrative errors.
According to the American Medical Association, about one in four U.S. physicians is older than 65, a number that more than quadrupled between 1975 and 2013. Factors that may impact a physician’s ability to practice medicine include: decreasing memory, declining visual acuity and slowing speed of mental operations. What’s more is that older doctors may be less likely to acquire new knowledge or adopt new strategies into their practice.
There is currently no standardized policy for screening older doctors on their ability to continue practicing medicine after a certain age. Some groups perform physical exams, cognitive exams, peer review processes or a combination of the three. These exams and age-based cutoffs have created a divide within the medical community. While one side sees this as age discrimination and a violation of academic freedom, the other side sees it as an opportunity to avoid malpractice suits and other embarrassing situations.
The bright side is that health systems like the University of Virginia have taken a comprehensive approach to addressing the aging physician issue and have implemented policies that aim to keep doctors practicing medicine longer and smarter.
But until these approaches become standardized, senior physicians will need to review their organization’s policy and start planning for their retirement.
Communicating your retirement plans
When the time comes for you to retire either from a solo or group practice, advanced planning and good communication will make the transition easier for you, your staff and your patients.
Give enough notice (a minimum of one year) so your team can coordinate how your workload will be managed. An abrupt exit may cause patients to abandon your practice before your replacement even steps foot in the office. Use this time to communicate your future plans with your patients and introduce other members of your team such as nurse practitioners and physician assistants so your patients can build rapport with them.
Before you exit, you should do everything in your power to keep your practice running as smoothly as possible, with minimal bumps along the way. Keep your stakeholders, partners and other parties well-informed during the transition phase to ensure that everyone is on the same page and has the best interest of the practice at heart.
If you’re recruiting a replacement, be transparent in your expectations for the future of the practice and share all of the important details about the operations, practice culture, and financial management. Remember, even though this doctor is going to be picking up where you left off, make sure they sign a non-disclosure agreement to keep all sensitive information confidential.
During the transition, reach out to fellow physicians and colleagues who are in the middle of retiring or have been retired for a few years. They may be able to provide you with additional insights to help with your exit. Also, consider hiring a consultant or an attorney who specializes in medical practices. They will be a valuable asset to you in your transition and can help facilitate the process to ensure issues are resolved in a timely and mannerly basis.
Getting your retirement funds in order
Physicians have unique financial needs. One of the biggest financial concerns they face is whether they’ll have enough money for a comfortable retirement. In the 2014 Physicians’ Financial Preparedness Report, physicians reported that their top financial concerns for retirement planning were having enough money to retire and the ability to fund long-term health care expenses.
According to the report, 50% of respondents said that they are on track with their retirement planning and only 8% are ahead of schedule. However, 42% consider themselves “behind where they need to be” in the retirement saving process.
If you’re an older physician who hasn’t started saving for retirement, it’s not too late to start. To help you prepare, follow these tips:
- Take advantage of existing retirement accounts: if your employer has 401(K) options or if you have an IRA, pay the maximum contribution to grow your funds faster.
- Pay off remaining debt: interest payments on loans and credit cards can wreak havoc on your finances, so try to pay them back as soon as you can.
- Adopt healthy habits: eating healthy and exercising leads to fewer trips to the doctor which will in turn help cut medical expenses.
- Live modestly: downsize luxury items, move into a smaller home or sell one of your cars to put more money back into your pocket.
- Research savings accounts: the interest on your regular savings account may not be doing much, so consider upgrading to a Certificate of Deposit (CD) that yields a better return.
These are just a few simple tips to keep in mind if you’ve started saving for retirement late in the game. To help you estimate how much money you’ll need for a comfortable retirement, check out this retirement calculator.
Tell us: If you’re a physician nearing retirement, how are you planning your exit?