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Why Physician Succession Planning Can’t Wait

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In Brief: Physician succession planning must begin before providers reach retirement age.

With a physician shortage on the horizon, healthcare organizations can’t afford to wait for providers to reach retirement age to start thinking about succession. Smart succession planning involves a comprehensive, long-term view that accounts for gradual changes in physicians’ practice style, the needs of the medical community, and evolving payment models.

In this continuing conversation, Jennifer Moody explains why succession planning must be a regular part of the labor cycle.

Explain the difference between succession planning and retirement planning.

Traditionally, in the sense of succession, we’ve always thought about it solely as retirement planning: Dr. Smith is going to retire next year and we find a replacement for him. The reality is that Dr. Smith may start changing his practice style in more subtle but impactful ways a decade before he actually thinks about retiring. If succession planning isn’t a perpetual part of every labor cycle, you’re not accounting for those changes, and that may lead to gaps in coverage.

What sort of practice-style changes would an older physician make, and how would they affect coverage?

A number of medical staffs have rules that allow physicians to stop taking call at the hospital after a certain age or years of service. Or you’ll see physicians who are reaching their later years and are starting to more closely watch their practice economics, particularly if they have a specific target in mind for their retirement. So they may start to more closely monitor their payer mix or close their practice to certain types of high-intensity patients. They may also focus on specific procedures that carry a lower malpractice burden, enable them to work fewer hours, or generate a higher rate of reimbursement.

And so those physicians continue to see patients, but they may be leaving a void in the community in terms of some of the coverage that hospitals are relying on.

A good succession plan accounts for those factors. It enables hospitals to understand the practice patterns of aging physicians even before they approach retirement. That, in turn, helps them be proactive about recruiting the right number of physicians, at the right time, and in the areas where they’re most needed.

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At several points in your article, you talk about getting physicians engaged in succession planning. What can physicians do to help address the challenge?

Redesigning a clinical practice really requires the effort of the practitioners, so it’s important that physicians be part of the solution. They have the best understanding of what realistically may happen in a program in several years. They’re in the best position to identify physicians who aren’t quite ready for retirement but are going to be part of that evolution, and who can help bridge the gap for changes that are going to take place.

What advice do you give to your clients about succession planning?

I encourage them to not view this as a dreaded exercise. Many hospitals are reluctant to bring up succession for fear of offending physicians. In reality, it’s on everyone’s minds. I have found that physicians feel much more comfortable knowing that a hospital or a medical group has proactively thought about succession. And at the end of the day, communities that are proactively planning for succession have the greater ability to implement healthcare changes in such a way that they don’t have a jarring effect on the medical community.

Jennifer Moody is an Associate Principal with ECG and regularly advises hospitals and medical groups on the topic of succession planning. In a recent column in CardioSource WorldNews, titled Why Hospitals and Provider Groups Should Be Thinking About Succession Planning, she explores how the issue affects cardiology practices.