Benefits for an aging physician population

Benefits for an aging physician population

AdobeStock_337403857 [Converted]

The AAMC’s 2022 Physician Specialty Data Report found that nearly half of physicians currently practicing are aged 55 or older. An aging physician population places pressure on recruitment and retention in many ways. Healthcare leaders might be asking themselves: Are young people encouraged to pursue medicine? How will years of increasing physician retirement rates impact an already thin workforce?


But they might not think to ask themselves another important question: Are their benefits tailored to meet the needs of aging physicians? If not, they’re missing an opportunity to improve recruitment and retention.


The power of targeted benefits 


A focus on retirement planning will appeal to a large number of doctors given that so many of them have their sights set on securing their futures. By demonstrating a commitment to helping doctors retire on time and with dignity, an organization can create market distinction for themselves since many facilities have taken the approach of competing with short-term rewards and signing bonuses. 


It also generates goodwill with staff members when an administration shows that it both understands and empathizes with physicians’ unique retirement needs.


The need to close the gap


Physicians leaving medical school with hefty student loans tend to begin saving for retirement later than most professionals. This makes it hard for them to fully maximize their qualified retirement plans. Additionally, physicians usually fall into the category of highly compensated employees. The IRS defines a highly compensated employee as someone who earns more than $130,000 a year, and they place limits on how much these employees can contribute to qualified plans. The further you go beyond the $130,000 threshold, the more limited you are in what you can contribute. Therefore, there’s often a gap between physicians’ pre-retirement income and how much of it they’re able to replace using qualified retirement plans alone. This can force them to work longer than they’d like to, and it leaves many wondering if they’ll be able to retire at all. 


Hospitals can be a part of the solution


Given the way most private practices do business, it’s hard for independent physicians to find sources of supplemental retirement income that will help them close this gap. And with the rise in physician employment, more physicians are completely reliant on hospital-provided benefits. This puts hospitals in a unique position to help doctors retire by offering long-term incentives and tax-favorable benefits.


More sustainable than you might think


Administrators often assume that enhanced benefits will be financially unsustainable, especially in today’s environment of rising competition for staff members. But in reality, benefits geared towards physicians who are nearing retirement age can be far more cost-effective than immediate cash or short-term bonus structures. In fact, sometimes all it takes to better meet physicians’ retirement needs is an update to an existing benefit plan. 


Retention increases sustainability 


Long-term incentive programs are designed to encourage physician loyalty. According to our clients, the cost of replacing a single physician can reach $500,000. Therefore, retention alone can help ensure the sustainability of an organization’s benefits.


How MaxWorth can help


If you’re curious to find out if your benefit offerings could do more to help your physician recruitment and retention efforts, we would be happy to evaluate your current programs. We would also be happy to assist you in designing and implementing a new benefit plan that incorporates a platform for cost-recovery, which will help ensure the program’s long-term sustainability. Since physicians can’t fully appreciate a benefit plan unless it’s effectively communicated, we also help our clients by improving their communication strategies and education programs. 

Sign Up For Our Newsletter

If you would like to receive industry updates and articles like the one you see here, complete the form below

Something went wrong. Please check your entries and try again.

Want to Learn More?

The fairness factor: How to avoid agitation around nurse pay

The fairness factor: How to avoid agitation around nurse pay MaxWorth got its start designing healthcare compensation strategies nearly two decades ago when call pay was one of the most contentious topics in the industry. We quickly learned that a perceived lack of fairness was at the heart of nearly…

The future of call pay

The Future of Call Pay Healthcare is always changing, and the pandemic accelerated change in many ways. Healthcare leaders and physicians might be wondering how recent changes will impact call pay. Let’s take a look at the origin of conflict over call pay, factors that are perpetuating it, and why…

MaxWorth’s longest running call pay program is better than ever

MaxWorth’s longest running call pay program is better than ever More than fifteen years ago, Winchester Medical Center became MaxWorth’s first healthcare client when we helped them solve a call pay conflict that was threatening their ability to staff their emergency department. Today, the hospital’s call pay program is just…

Nurse compensation: Know what benefits matter most

Nurse compensation: Know what benefits matter most Nursing turnover rates are increasing. In 2019, they stood at 18%, and by 2021, they had risen to 22%. Today, that number has reached 37% in some areas. The full extent of the pandemic’s impact on nurse retention is yet to be seen,…