Doctor Dearth: Frustrated with Managed Care and Flush with Wise Investment, Physicians Are Retiring Earlier — Alarming Hospitals and Practices
Jul. - Aug. 2001
By Health Forum, Inc.
Things look grim for Gil Rodriguez, M.D., vice president of medical affairs at Southwest Washington Medical Center, Vancouver, BC. Already confronted by a doctor shortage, Rodriguez expects to be hit with dozens of physician retirements in the next five years, creating the need for a multimillion-dollar recruitment effort. A number of the retiring doctors will be in their 60s or beyond, an age when no one would begrudge them a gold watch. But others will be much younger, and they’ll shave off years of productive practice when they hang up their stethoscopes.
Early physician retirements constitute a new trend, one that’s being reported by doc recruiters and hospital executives around the country. A decade ago, doctors routinely worked well into their 60s. Not so anymore, at least not as much. Now, Rodriguez and many of his colleagues view any doctor 55 or older as “at risk.”
While the frustrations of managed care take a lot of blame, Michael Whitcomb, M.D., a senior vice president at the Association of American Medical Colleges, says that doctors have started paying attention to investment programs that would allow them to retire early.
Rodriguez worries about one such doctor, a neurosurgeon in his middle 50s. “He wants to get his youngest son out of college, along with some other milestones,” he says. “He’s close to hitting all of them.” Neurosurgery isn’t the only place Rodriguez has a thin bench. With an air of resignation, he ticks off the other specialties that will be affected by retirements: orthopedics, cardiology, gastroenterology, internal medicine, and family practice.
Of the center’s 63 family practice full equivalents, 20% are 55 or older. These retirements could have a huge impact on the center’s patients, considering that each family medicine doctor cares for nearly 4,000 patients. Poor reimbursement in his market makes it difficult to recruit doctors, Rodriguez says, and the early retirements exacerbate the problem. “The retirements are making things a lot worse, and no one is paying attention to them,” he says.
Who’s Paying Attention?
Physician recruiter Mark E. Smith agrees that many hospitals will be caught napping as their physicians start to retire. “We haven’t even begun to see the impact this will have in the marketplace,” he says. Smith, a vice president in Merritt, Hawkins & Associates’ Atlanta office, cites a survey his company released last year that revealed a groundswell of coming retirements. Of 300 doctors 50 and older, 38% said they planned to retire in the next one to three years, while another 10% said they planned to work in a non-clinical setting. Another 28% said they planned to work as locum tenens, close their practices to new patients, or substantially reduce their workload. Only 18% planned to continue working full-time in patient care. The survey included primary care and specialist doctors, in the same ratio that they occur in the United States.
Given that more than one-third of the nation’s 740,000 doctors are 50 or older, the survey represents a significant chunk of the workforce. A leading physician supply expert, Richard Cooper, M.D., director of the Health Policy Institute at the Medical College of Wisconsin, Milwaukee, thinks the survey’s retirement numbers are unrealistically high, but he agrees that they point to a trend.
No Buyers for Practices
Perhaps the most alarming finding in the survey: with 60% of the doctors leaving their own practices in the next three years, half of respondents say they haven’t made plans to transfer patients to another physician or group. In some instances, that may be because they can’t.
Tom Simmons, CEO of Collom & Carney Clinic Association in Texarkana, Texas, tells of a gynecologist who retired last March. Unable to sell his practice, the doctor finally gave his 5,000 patient records to the clinic. “Ten years ago, this would have been unheard of,” says Simmons. In the past, some doctor would have snapped up the practice for $300,000 to $400,000. Meanwhile, Simmons tries to recruit a gynecologist; the clinic’s other doctors in that specialty are already busy.
One problem with replacing the newly retired doctors, says Simmons, is that younger doctors often are unwilling to work the strenuous schedules shouldered by their forebears. “The old-school doctors had an expectation of working 60 to 80 hours a week and they spent their careers doing it,” Simmons says. But for some younger physicians, an easier lifestyle takes precedence over generous compensation. “It doesn’t matter how much money they make if they are on call every other night,” he says. A case in point: he plans to hire two surgeons to take the place of one who labors 80 to 100 hours a week.
Planning Ahead
In some ways, Simmons is lucky; he’s not facing an avalanche of retirements anytime soon. The average age of Collom & Carney’s 65 doctors is 40. But Simmons isn’t sitting on his hands. He’s seen the average age of retirement fall from 67 to 61 in the last decade, and thinks it will go even lower: many of the clinic’s 40-something physicians say they’ll quit in their late 50s.
To prepare for the exodus, Simmons is recruiting doctors in eight specialties now, even though he has only two doctors retiring in the next three years. “We may overbuild in the short term,” he says. “But we are trying to get ahead of the curve. We’re not finding anything easy.”
And Smith says he doesn’t expect things to improve for executives like Simmons, whose clinic is in a second-tier market — those with a million or less in population. “Younger doctors want to be in suburbia or have access to the amenities of suburbia,” he says. This often leaves smaller markets out in the cold.
Two indicators could presage an intensifying specialist shortage. First, of the 1,900 searches Merritt, Hawkins did nationwide for the 12 months ending March 31, 2000, 76% were for specialists. Only three years ago, that figure was 33%. Second, the salaries for some specialties have jumped. Three years ago, Smith was offering $150,000 to $175,000 to attract a young cardiologist; now he starts at $250,000. In the last half of 2000, he says, anesthesiology and radiology starting salaries jumped $50,000 to $75,000.
While hospital and practice executives worry about the extra dollars they’ll spend in recruitment, they also worry about their patients. In Texarkana, patients wait 90 days to see a rheumatologist or a neurologist, and CEO Simmons fears the wait will lengthen even further if he doesn’t fill the holes in his physician staff. Rodriguez faces an even more daunting situation: new primary care patients have to wait three weeks to see a doctor. For Medicare patients, the wait can be even longer, partly because 58% of physician practices in his market have closed themselves to new Medicare patients. Meanwhile, Vancouver’s population is 345,000 and growing.
Rodriguez is not surprised that older doctors would rather go golfing than care for patients. “At age 55, most doctors are not happy in their practices and managed care is the number one issue,” he says. Older doctors are working harder for less pay, Rodriguez points out, and those who benefited from the stock market boom are in a position to walk away.
To maintain physician supply, Rodriguez plans to work with physician practices, showing them data on patient demand. “When it’s all said and done, this is going to be a multimillion-dollar program,” he says. But Rodriguez doesn’t have a choice. “Without this investment, the doctor shortage will hurt the hospital, and ultimately, our patients.”
NOTE: Reprinted from Hospitals & Health Networks, Vol. 75, No. 3, by permission, March 2001, Copyright 2001, by Health Forum, Inc.
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