You think “it’s not time yet.” We often hear surgeons say, “Gosh, I don’t feel __ years old!” or “I plan to work until I’m 70.” Sound familiar?
You’re afraid to think about what life would be like without your profession. So you do nothing. Imagining a life without being needed on a daily basis can be daunting. Reread the survey results above. If you don’t have interesting and emotionally rewarding activities that will fill the void, that can cause anxiety. And the fact is, the demands on physicians, especially those in solo practice, haven’t left much time for outside interests.
Discussing personal goals and financial matters with others is messy or taboo. Transitioning out of practice is an awkward and uncomfortable topic. Plus, whom do you call for help with planning the next stage of your life?
These and others on a long list of excuses and anxieties result in fewer than 70% of all surgical specialists we talk with having a viable transition plan. Many, of course, have done a superb job of funding their retirement plans and have the assets set aside to fund a comfortable lifestyle. A lot has been written on the financial aspects of retirement. Your financial advisor, broker, or banker has formulas, tools, and advice that you’ve probably been following for decades. The 2014 Medscape Orthopedist Compensation Report shows the average salary is $413,000, with private practice doctors earning even more, $439,000 on average.1 Although such salaries should ensure the funding of retirement savings plans, undeniably, the financial crisis and stock market collapse of 2008 delayed many surgeons’ retirement. Even today, some surgeons who are considering their practice finish line are looking over their shoulder at market returns with a sense of insecurity.
Recruitment Is More Likely Than Cash Out
Thinking you can sell your practice for big bucks is a false hope. In the 1970s and early 1980s, before the onslaught of managed care, it was possible to sell your practice. A young surgeon would welcome having space, staff, and patients at the ready. This is no longer the case, since patient loyalty is now impacted by health insurance plan membership.
Pocketing a hefty sum from selling the office building may not be much of a windfall either. It depends on that all-important real estate formula: location, location, location. In addition, dividends from and investment in a surgery center rarely continue once you are no longer operating.
To maximize the profit potential that remains in this last phase of practice—which in turn can attract surgical talent as you transition—you’ve got to sharpen the sword and pay attention. One surgeon attributed a revenue decline of about 30% over the last 5 years to a combination of lesser insurance reimbursements, his taking more time off, and failing to pay attention to his staff’s write-off habits. Revenue cycle, management, coding, and practice operations must be finely tuned to optimize profitability, and failing to manage your practice effectively will make it less attractive when recruiting a younger surgeon to take your place or assume the patient base. Consider a practice evaluation regardless of where you are in your planning, which will help the practice prioritize improvements that deliver the best benefit and value within the context of your transition plan.
And if recruitment is part of that plan, be prepared to spend significant time on the search. Solo and small groups are finding it challenging to recruit just-out-of-training associates. This generation of new physicians values work-life balance and is more likely to prefer employment to entrepreneurship. Additionally, established physicians who have not invested in or adopted new technologies, such as EHR, will have a tough time attracting top talent. Having been trained using EHRs, few, if any, young doctors will find a reversion to paper records acceptable—and, in fact, most find it a turnoff. Thus, depending on your transition plan and your age and stage, updating technology may be a necessary investment.
Stepping Down But Not Out
If you’re thinking about slowing down but not ceasing practice completely just yet, 2 options are worth considering: practicing part-time and/or becoming a nonoperative orthopedist.
The 2014 Orthopaedic Practice in the United States (OPUS) report issued by the American Academy of Orthopaedic Surgeons shows that the average age of part-time surgeons is 69.14 years and that 48.6% are generalists.5 Part-time surgeons surveyed reported working an average of 23 hours per week and performing 5 procedures per month, compared with full-time surgeons who clock in at 56 hours per week and perform 31 procedures per month.5