According to an Association of American Medical College’s report, two out of five practicing US physicians will be older than 65 as this decade continues, and many will ponder partial retirement from a group practice. Partial retirement affects many aspects of a group practice, from compensation to workload.
Some practices may decide not to allow partial retirements at all. The decision also involves how each practice chooses to define partial retirement. While some practices may view working 3 days per week as partial retirement, others may view it as a physician taking on a certain amount of telehealth patients. Eligibility factors, like age or tenure with the group, also come into play, as will the question of approved duration of partial retirement.
Law firm Wade, Goldstein, Landau, & Abruzzo found that partial retirement included elements like fewer work hours, fewer responsibilities, more vacation time, and more leaves of absence. Based on its report, the firm suggests evaluating the duration of partial retirements in 1-year increments on a limited, year-to-year basis.
For those who would like to move forward with allowing partial retirement, Anjana Patel of Epstein Becker Green law firm suggests that folding partial retirement issues into shareholder and operating agreements is an excellent strategy for group practices. It is important to note that physicians’ partial retirement plans have been heavily influenced by the COVID-19 pandemic. Some reports indicate that the pandemic left more than 70% of physicians feeling overworked, with more than 20% considering early retirement.
According to Patel, compensation and workload are two of the most significant aspects of partial retirement. For example, partial retirement involves reworking how practice responsibilities are doled out. Administrative work and/or clinical work duties may have to be reorganized. This will greatly impact physicians and staff who remain full-time at the practice. The issue of succession planning must also be addressed if the founders of a group practice are considering partial retirement so that practices can ensure a smooth transition once retirement occurs.
Patel also stresses the importance of establishing an approved duration of partial retirement. This prevents a physician from holding on to a permanent partial-retirement position, for instance, allowing practices to hire new fulltime physicians once a physician’s partial retirement has ended. Furthermore, it fosters a path toward an optimal number of patients and optimal practice revenue.
