April 24, 2017
Because most anesthesiologists practice in large groups, succession planning revolves primarily around considering the impact a retirement will have on the group. Experts advise advance planning and thinking in terms of having a “next generation” of clinicians in place to avoid gaps. Only 23 percent of physicians 55 and older are involved in a succession plan with their hospital or practice, according to a national survey.
Considering the rigorous demands, complexity and pace of modern anesthesia practice, it’s not surprising that many anesthesia groups chronically delay thinking about succession planning. Your group’s plate is already full dealing with everything in the here and now, from cybersecurity threats to MACRA compliance. Succession planning doesn’t demand your attention at the moment, so why think about it when countless other, more pressing issues compete for your time?
Read the experts and professional literature on succession planning, however, and a theme of “start now” and “it’s never too soon” jumps to the fore.
Patient retention is not the issue for most anesthesiologists that it is for primary care physicians and some other specialties. As a result “succession planning for anesthesiologists, in general, is more of a personal matter that becomes a governance issue for the group,” says Maurice Madore, chief client officer for ABC. “If a group has many doctors and three of them want to retire next year, planning for future staffing needs to cover the group’s contractual obligations becomes the group’s problem.”
For this reason, for anesthesiologists, succession planning primarily means thinking about the effect retirement will have on the people around them. How many group members are thinking of retiring at the same time? Can the group afford the loss of that many clinicians at once? You might decide to retire at 55, 65 or 75. That matters less than the fact that when you do decide, your retirement becomes a governance issue for the corporation that triggers decisions about whether and when to recruit someone new and, depending on the group’s agreements, how to cover the corporate financial obligations post retirement.
“Once you’ve declared your retirement schedule, often, because of your operating agreements, you can’t go back. Your group will already be recruiting someone to take your slot,” Madore says.
The demographics of the physician community reveal some other major reasons for the value of succession planning. According to a 2016 report commissioned by the American Association of Medical Colleges (AAMC), “for all specialty categories, physician retirement decisions are projected to have the greatest impact on supply, and over one-third of all currently active physicians will be 65 or older within the next decade. Physicians between ages 65 and 75 account for 11% of the active workforce, and those between ages 55 and 64 make up nearly 26% of the active workforce.” The AAMC study indicates a current deficit of 21,800 physicians and projects a shortage of more than 90,400 physicians by 2025.
At the same time, a 2016 survey of physicians ages 55 and older by recruitment firm AMN Healthcare reveals that only 23 percent are involved in a succession plan with their group or hospital.
Add to those numbers a 2014 survey finding by the Physicians Foundation that “39% of physicians indicate they will accelerate their retirement due to changes in the healthcare system” and the large picture becomes clear: physicians are aging and retiring, and the medical community needs qualified younger physicians to replace them, particularly as the population of older adults—and chronically ill patients—in the United States mushrooms with the aging of the baby boom generation.
Then, of course, there’s the smaller picture as it pertains to individual anesthesia groups. If you want to prevent business chaos and legal or financial problems as you head toward retirement—and certainly you do—experts advise thinking strategically and planning effectively in advance.
In the March 2017 issue of Physicians Practice, attorney Chris Mann advises practices to consider whether they have a “next generation” of clinicians prepared to take over and ensure continuity of expertise (in cardiac anesthesia or obstetric anesthesia, for example), as older members retire. He also advises using the expertise of a knowledgeable advisor or advisors with medical practice succession planning experience.
Increasingly, succession planning in preparation for retirement is also coming to include the possibility of selling a practice to a hospital or other healthcare organization. Attorney Ian P. Hennessey notes an increase in this practice among physicians that parallels the increase in the number of hospital-employed physicians in general.
In a 2015 article on succession planning in our quarterly newsletter, Communiqué, Jody Locke, ABC vice president for anesthesia and pain practice management, observes that anesthesiologists “tend not to take on things they cannot control,” and that it is this aversion to risk that makes some anesthesiologists hesitant to tackle succession planning. Although “it is a particular challenge for which they have not been prepared,” he says, “it is one they could master with the same attention to detail and persistence that made them good physicians.”
With best wishes,
Tony Mira
President and CEO
