Partial retirement is a consideration for many physicians as they age into their 60s. 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 a number of them will be pondering partial retirement from a group practice. Partial retirement affects many aspects of a group practice. Everything from compensation to workload is impacted.
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 a week as partial retirement, others may view partial retirement 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.
Evaluate Duration of Partial Retirement in 1-Year Increments
Law firm Wade, Goldstein, Landau, & Abruzzo explored partial retirement and found that it 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 that would like to move forward with allowing partial retirement, Anjana Patel of Epstein Becker Green law in Newark, NJ, 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 coronavirus pandemic. According to the Doximity 2021 Physician Compensation Report, the pandemic left more than 70% of physicians feeling overworked. What’s more, over 20% of physicians were considering early retirement.
Rework How Practice Responsibilities Are Doled Out
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 those 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 full-time physicians once a physician’s partial retirement has ended. Furthermore, it fosters a path toward an optimal number of patients and optimal practice revenue.