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Transitioning to retirement
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Transitioning To Retirement While Still Working

Transitioning to retirement can begin as early as ten to fifteen years before you leave your practice, by going off night call.  We need to distinguish between three groups: the solo practitioner, the small group of two to five physicians and the larger groups of greater than five physicians.

With a solo practitioner this may not be an option, and will depend on your hospital’s policy as to when you do not have to cover the ER.

With the medium size group, the option of no call may be first no weekends for a few years then no weekdays, depending on the generosity of the group.  This can be tied to a decrease in salary, a commitment to retire in a specified time, and to the number of physicians available in the group who can take call (in other words in a five-man group, I doubt if the partners would allow three physicians off call at the same time).
 
With the larger groups, usually it is determined up front and at the time you sign your initial contract that in a certain number of years, you can go off night call.  We use twenty in one of our groups.  Your salary is decreased by a percentage, but because you are no longer covering the ER and hospital, you will have an additional decrease in salary from the trauma cases you would have normally received. There are different ways to determine the salary decrease, but some are too involved for this short message. Anyone interested in how we determine this can contact me.

Even though hospitals do not set age limits for the cessation of surgery, groups sometimes will do so (we use 70 years as the cut off). There are studies that show physician performance and patient outcomes decrease with aging.  Some find it difficult to address a senior partner and tell him to stop operating, unless there is some egregious problem. With a cut off age, we do not have to tell someone at age 75, that he needs to stop operating.  Once a doctor reaches 65, he is evaluated on a year-to-year basis.

The next step in transitioning is the consideration of slowing down.  Overhead in this phase is the factor that can decrease your salary exponentially.  Seeing fewer patients and paying the same overhead will decrease your salary. It is worse for the solo practitioner and less for the larger groups. One solution, we use,  is by telling the “slow down physician”, if he notifies the group two years in advance that he will retire, then for his final year before retirement, we will keep his overhead at a specified level (we use up to 5% more than the average group overhead).  This gives us time to find a replacement.  This advance notification in smaller groups could be tied into not taking night call as well as the overhead stability.  For example, if a physician notifies a smaller group that he intends to retire in 3-4 years, the group can begin looking for a replacement and the transitioning physician would no longer take night call and have a stable overhead if he wishes to slow down.

Once he retires, he is no longer a partner in the group, doesn’t perform surgery, but can if needed and if space is available work for the group in the capacity of a non-operating orthopedist. This would benefit the group, particularly, if a new partner has not been recruited.  At this point, he should be salaried and receives a designated percentage of his collections, but usually no other benefits or ancillaries. His license and malpractice insurance (which usually is minimal) is paid by the group, but he must exceed a minimum amount with his collections. To allow him to practice in the group one or two days a week, operating, having you see his follow-up patients and not having to take night call, I feel, is an invitation to discontent in the group and particularly the new partner that was to replace him. He should continue working, retire and not work, or if the need exists work in the office seeing patients and referring to the group his surgical cases.