Categories
Physician Retirement Planning

The Ways Physicians Retire

Recently, an older primary care physician in solo practice called me to ask if our hospital would buy his practice when he retires. I’ve seen a lot of physicians retire over the decades and there are several different ways that physicians do it. This post is all about the retirement paths that physicians can take.

First, I did not offer to purchase the physician’s practice. In the past, retiring physicians often sold their practice which meant selling their patient’s paper charts. But, nobody does that anymore. With the availability of electronic medical records, those paper charts are essentially valueless – the medical information is already on-line. There are situations when a physician will purchase office space and equipment from a retiring physician but since most physicians lease office space, this is also becoming quite rare. Also in the past, junior physicians would have to buy into a practice to become a senior partner with the proceeds often becoming severance pay to the senior physicians at retirement. This practice has also nearly disappeared with a industry wide move to hospital-based employment and large multispecialty practice group employment. As a consequence of these changes, physicians no longer have the option of cashing out at retirement. However, this has also opened the door for many other ways for physicians to retire.

Going Cold Turkey

Some physicians one day just stop practicing altogether. This can be a pretty abrupt change in lifestyle for a doctor who has been working 60 hours a week plus taking call. It is like driving your car all day at 70 miles an hour on the highway and then pulling off onto a 15 mile per hour side road. Many doctors who spent years dreaming of a life of nothing but golf or fishing find themselves suddenly unfulfilled and untethered from a time when their skills were valued and needed. This can result in a sudden identity crisis. Some physicians unexpectedly find that what they miss most when no longer in the hospital or the office is the human contact with other doctors, the other healthcare staff, and the patients. Loneliness and isolation can be unanticipated consequences of sudden and complete retirement. Nevertheless, making a complete break from medicine can avoid the day to day reminders of a past life when the physician was valued and needed as can occur when one  gradually slows down medical practice. For many physicians, going cold-turkey in retirement allows one’s legacy to be remembered for being the doctor that they were when they were still at their best rather than for being remembered for the doctor that they used to be.

The Fade Away

Another retirement option for physicians is to slowly cut back, making retirement a more gradual process. The hospitalist or emergency medicine physician can just take fewer and fewer shifts. The family physician can stop taking new patients and reduce the number of days in the office per week. This results in a much less abrupt lifestyle change than retiring cold turkey and allows the physician to remain socially engaged with patients and other healthcare workers. A downside of dialing back is that the physician can become less relevant than those other physicians who are working fulltime – the physician can feel tolerated but less valued than in the past. You are no longer asked to be on key committees or included in key decision-making. Also, the practice of medicine takes practice, just like it takes practice to be a high-performing athlete or musician. There is a risk of losing one’s skills as one becomes increasingly part-time.

Shedding Unwanted Career Baggage

Over time, every physician builds up career baggage. You are put on a committee that you never get off. You pick up an administrative task that never goes away. Toward the end of a doctor’s career, all of that baggage can really weigh you down. For some physicians, retirement means stopping doing these non-patient care duties that they may not really enjoy doing but continuing to see patients. But with continued patient care comes continued patient phone calls, electronic medical record “inbasket” management, paperwork, etc. that will still require daily physician involvement. Nevertheless, this form of retirement can allow the physician to continue to do what he or she really enjoys while shedding unwanted administrative tasks.

Move To The VA

Columbus, Ohio is one of the largest cities in the U.S. without a Veterans Administration hospital. However, we have a very large outpatient VA clinic. Many physicians in Columbus are drawn to the VA clinic in retirement. It is 9-5 Monday through Friday work with no weekends and no call. The patients appreciate you and there are no pressures from insurance companies. You get a set salary and if you are there for at least 5 years, you are eligible for benefits through the Federal Employees Retirement System (FERS). For physicians who have been in a financially-strapped solo practice and unable to save much for retirement, FERS can be very attractive. An active, unrestricted state medical license allows you to practice at a VA anywhere. It may still be full-time work but full-time at a VA clinic is usually less time than full-time in a private practice. In addition to the Veterans Administration health system, there are many other, similar employment jobs available for physicians who still want to practice medicine but want to get rid of some of the headaches of private practice.

Emeritus Status

For physicians in academic medicine, emeritus status can be a great option. You can continue to attend conferences and grand rounds. You often get free parking at the University and access to the library system. You can continue to do research, write papers, and teach. You may even get to have an office somewhere on campus. Typically, emeritus faculty have a considerably lower salary than regular faculty (or no salary at all) but also have the freedom to “just say no” to pretty much anything they don’t want to do. In many universities, emeritus status physicians can still see patients, but often for a time-limited number of years after retirement. Emeritus programs can be a win-win for both the physician and the university. The physician can remain engaged with teaching, research, mentoring, or clinical care in a part-time basis. The university gets an experienced faculty member to contribute the university’s mission at little or no cost.

Volunteer Medicine

For physicians who retire financially secure, volunteering can allow the physician to continue to utilize their skills for the benefit of society. An advantage of volunteering is that the physician can decide what to volunteer for, when to volunteer, and how much to volunteer. Locally, this can be at various free clinics or on health department boards. It can be on medical missions abroad or at a Red Cross blood center. However, just because you are not getting paid does not mean that you cannot be sued so be sure that you check into medical licensure requirements and the need for medical malpractice insurance.

Locum Tenens

As a locum tenens physician, you agree to provide temporary coverage of a practice for a defined amount of time. This often happens when a physician has to leave the practice for a period due to pregnancy, illness, military reserve requirements, etc. Sometimes it is because someone left the practice and that physician’s replacement will not finish residency for several more months. Or for whatever reason, there are more patients than doctors at a location. Locum tenens jobs often come with a per diem allowance for housing and food. They may also pay for your transportation to/from the practice location as well as your malpractice insurance. The downside is that the physician may have to apply for a medical license in a new state and travel may require absence from family and friends at home. It can also be difficult to get oriented to a new electronic medical record, practice model, and medication formulary. However, locum tenens is often a good option for the physician who wants to work for a few weeks or months a year and doesn’t mind having to travel to do it.

Consulting

This is a pretty broad area and can include working as an advisor to businesses or governments, providing expert opinion to attorneys or insurance companies, surveying hospitals for accreditation organizations, and providing editing or reviewing services for media. The physician can utilize the knowledge and analytic skills that she or he has garnered over the years. It can provide at least a modest stream of income with part-time work and that work can often be done from one’s own home. Even a relatively small amount of consulting income can provide an opportunity for schedule C income tax deduction for expenses such as medical licenses and subscriptions.

Do Something Completely Different

Many physicians sent most of their career dreaming about how they would like to start a winery, or open a restaurant, or create a bed and breakfast. Physicians who have saved well during their medical careers may have a substantial sum saved up that can form the capital investment necessary to start their own business. But many of these ventures can end up being another full-time job with long hours and the pressures of employee management, sales, marketing, and accounting. The harsh realities of being a boutique entrepreneur can turn those dreams into a small business nightmare.

For some financially secure physicians, a carefully planned second career after medicine can provide a way to stay engaged with other people and work days that are free of the weighty demands of managing chronic disease, nights on call, and mountains of paperwork. But the old adage “The grass is always greener on the other side of the fence” can often hold true for physicians starting a second career.

Social Media

Currently, there are 689 million TicTok users, 600 million blogs (including this one!), 340 million Twitter users, and 1.75 million podcasts. Add in webcasts and YouTube accounts and the number of social media users exceeds 1 billion. Launching a social media site can be attractive to the retired physician because content can be recorded whenever there is some free time in the week with no worries about deadlines. And the material can be about anything from medicine to public policy to hobbies.

On average, physicians plan to retire about 5 years later than the average American, at age 68 versus age 63. There are several reasons for this later retirement age, perhaps most importantly that physicians have a long training period and most do not actually enter the medical workforce until after age 30, many years later than the typical American. The retirement choice that each physician makes will depend on one’s physical health and financial health as well as one’s individual wants and needs. But the possibilities can be endless…

March 28, 2021

By James Allen, MD

I am a Professor of Internal Medicine at the Ohio State University and the Medical Director of Ohio State University East Hospital