Summary of AMGA Forum Discussion
Question: “Currently, our 45 provider, multispecialty group does not have a retirement policy within the shareholder/employment contracts. The problem is we have physicians who are 69+ who will not inform the group on when they plan to retire so we may start recruiting 1 to 2 years ahead of time. We are proposing to include a mandatory retirement age.
Does your group mandate physicians to retire by a certain age? If so, what age? The last group I worked at mandated retirement at age 70. Julie Wright, MBA, CMPE, Chief Executive Officer, Southlake Clinic”
Answers:
At St. John's Clinic we do not have a mandatory retirement age and on
rare occasion have had to force the issue, mainly with surgical
specialists whose skills had begun to wane. What we do have to deal with
the issue you raise is a provision that as long as a physician gives us
1 year notice of a date they are going to retire, and agrees to
cooperate with recruitment and transition of the practice, they are
given a significant break on overhead and malpractice insurance
allocation. This helps to offset the "winding down" in production that a
practice will experience approaching retirement either by the physician
taking more time off, or the patients leaving for other practitioners
who will be around longer.
Randall D. Huss, MD
President, St. John's Clinic-Rolla Division
We do not have mandatory retirement age, but we have a policy. Our policy is that a physician informs us 18 months in advance of retirement to allow us time to recruit, then (and I cannot recall the specifics) they can reduce their production down to a certain level. If they go below this or want to go below this they have to speak with the board chair and CEO to make special arrangements.
As a 40+ surgeon group, we have had to face the realities of declining skills of our surgeons on an ongoing basis. In consulting with our attorneys, it was felt that mandatory retirement would not pass muster and could not be inforced.
Therefore, the way in which we deal with our senior surgeons is as follows:
1. Partners relinquish shareholder status at age 65 (this is mandatory).
2. Thereafter, they have one year renewable contracts, renewed at the pleasure of the board of directors.
3. As a surgeon approaches their 65th birthday, they meet with members of the Professional Development Committee (charged with monitoring the professional activities of our members, with their main responsibility the nurturing of our junior associates). A long term plan is developed between the surgeon, the leader of their division, and with the approval of members of the committee. Typically, this will be a 3-5 year plan, culminating in the retirement of the surgeon.
4. Yearly review of this plan by the PDC, in conjunction with the leader of the division that the surgeon is in, to ensure that manpower and recruitment needs are being developed and met. Following this, the yearly review of the senior surgeon takes place, along with the surgeon's input.
5. Finally, a recommendation is made to the board of directors as to whether to renew the senior surgeon's contract.
In practice, this has been a learning experience, but our two most recent seniors have exit strategies with plans in place that allow us to recruit with the knowlege of their specific retirement dates. Needless to say, if there are performance issues, all the leverage resides with the group practice, since contracts are renewed yearly.
I hope this brief outline of an involved, but well thought out practice, helps you.
Jeff
Jeffrey L. Cohen MD, FACS, FASCRS
President, Connecticut Surgical Group
85 Seymour St., Hartford, Ct. 06106
Clinical Professor of Surgery
University of Connecticut
tel: (860) 548-7336
fax: (860) 524-2651
At the Ogden Clinic we do not have a set age where our physicians must
retire.
Paul
At Norton Healthcare, we also do not have an established age for
mandatory retirement.
Ginger Figg
President, Norton Healthcare Physician Services
502-212-1310; 502-212-1688 (fax)
No mandatory retirement for our Clinic either. We do have a policy if at age
55 you choose to come off call and have your departments approval, you incur
a 10% penalty on your compensation (10% given to the department who makes up
your call) and you have to retire from FT status within 5 years.
Gary J. Fazio
Chief Executive Officer
Boice-Willis Clinic, PA
901 N. Winstead Avenue
or
3221 Zebulon Road-Suite A
Parkwest Building
Rocky Mount, NC 27804
252-937-0320 (office)
252-904-5491 (cell)
252-451-0056 (fax)
Esse Health is a 75 primary care physician group in St. Louis. We have
no mandatory retirement age. But for planning purposes, we have an
unwritten policy that physicians provide one year notice of their
expected date. I think it's time for a written policy.
Best Regards,
Mike Castellano
CEO
Esse Health
Our 140 physician group does not have a retirement age. In fact, we
have 4 physicians 70+. No plans at the present time to create a
mandatory exit plan.
We have 165 docs and have an incentive of one month's collections for those who cooperate with the recruitment department during retirement. This is about 30K and gets good compliance. Complying requires about a year of lead time.
Todd
C. Todd Staub MD FACP
Chairman, ProHealth Physicians
4 Farm Springs Road
Farmington, CT 06032
860-284-5200
Our group of 160+ physicians does not have a mandatory retirement age.
In fact, we have a number of partners in their upper sixties and a
couple in their early 70's who are still going strong and we are very
glad to have them as they are in hard to recruit specialties. We've
been pretty fortunate that our senior partners have been forthcoming
with the Chief Medical Officer about their retirement plans and
timelines.
Kimberly Shank
Executive Director
Wichita Clinic
3311 E. Murdock
Wichita, KS 67208
Ph: 316-689-9315
Fax: 316-689-9710
We at Holzer have a mandatory retirement from shareholdership at age 70. The physician can be employed with a 30 day out after age 70. All physicians have a mandatory physical starting at age 60.
Physicians are encouraged to give as much notice as possible about their retirement plans. They are required to give a minimum of 90 days. For what it is worth, some accountants have a mandatory retirement age as well. I know that E&Y partners have to retire at age 60.
Julie:
We have been struggling with this, as has everyone, for many years. Our
shareholder agreement has always terminated at age 70, after which the
physician is offered a year to year contract. This clause is currently
on my to-do list (to be done before I have another 70 plus situation) as
my legal council believes this is age discriminatory and therefore
illegal. Apparently, about the only occupation that one can mandate
retirement is in the airline industry.
The two issues we have struggled with are the recruitment planning issue
you mention and a quality of care concern. Fortunately, I have only had
one instance of a +70 year physician and he self managed the competency
issue better than any quality assurance committee would ever have been
able to so there were never any difficulties.
I am trying to deal with the recruitment issue by slowly changing our
culture to that of requiring our shareholders to plan two years or more
out. As you know, this is extremely difficult as most physicians
believe that their patient base will instantly dry up the moment they
announce future retirement plans. This of course is never the situation
and they are always busier than ever up to the very last day.
Give me a call if you would like to discuss our experience.
John Tallent
CEO
Medical Associates Clinic & Health Plans
Dubuque, IA
Julie,
The Everett Clinic does not have a mandatory retirement policy. In terms of quality of care, all of our physicians have quality data identified and followed, and all undergo peer review every two years. There has not been to date a quality concern for our physicians who have chosen to work beyond age 65 years.
We do have an incentive for physicians to announce planned retirement in advance (fondly called the "Fogey factor"). A physician who announces an exact date of retirement more than 18 months into the future is paid a bonus of 5% of the mean FTE physician salary for the Clinic for 18 months. The one additional requirement is that the physician must have been employed at the Clinic for at least 22 years. If the physician terminates employment before the 18 months, he/she must repay the bonus.
This approach has allowed us to plan recruitment and transition in an orderly manner for retiring physicians. The added cost of this bonus is more than offset by the revenue that is maintained by the quicker replacement of the physician.
Harold Dash, MD
Board President
The Everett Clinic
Dear Group:
Bond Clinic has a mandatory retirement age of 65. At that time, each physician must give up their shareholder status in the professional corporation and start receiving payout of equity relating to their partnership interest in the Clinic’s real estate holding company. However, the Physician may appeal the retirement to the Board of Directors for continued employment, but they can not appeal shareholder status or ask for postponement of the holding company buy out (removal of all voting rights).. At this time, a few physicians are still employed that exceed the age of 65. Further, the physicians must give a one year notice when retiring before the age of 65.
HGK
Howard G. King, FHFMA, SPHR, CMPE
Chief Executive Officer
Bond Clinic, PA
East 500 Central Avenue
Winter Haven, FL 33880
Tele: 863-293-1191 ext 3437
Fax : 863-293-3635
Julie,
You have raised an interesting legal issue. I am going to forward your question to the AMGA Council of Attorneys listserv for some additional perspective, and will forward a summary of the responses to this group.
Mike Ferguson
Assistant Director, Marketing & Council Relations
(703) 838-0033, ext. 335,