In our last post, we demonstrated the overall decline in primary care physician productivity from 2002 to 2016. The decline has yet to rebound for Family Medicine, Pediatrics and Urgent Care while Internal Medicine and OB/Gyn have seen sharp upticks in productivity in the last several years. This week’s focus is on the medical sub-specialties.
In our work helping clients across the country determine the number and type of physicians they need to be successful, physician productivity is a key factor. We have been closely tracking the market forces that impact productivity, as well as the resulting level of ambulatory encounters on a per specialty basis. This week’s focus is on primary care.
Over the past few months, we’ve been noticing some trends in our conversations with our clients. There are three consistent conversations that continue to pop up. The first is about tightening budgets in direct proportion to the uncertainty around healthcare reform. The second is a desire to revisit their Provider Development Plan more often than every 3 years. Finally, clients (and us) are concerned that relying on a Community Needs Assessment for 3 years is not defensible, if need be. In response, we have developed, and are now offering, a subscription service to Provider Development Planning.
For many hospitals and health systems, planning for the succession of their physician base often is one of the largest components of their Provider Development Plan. While actual planned retirement age varies by market, physician specialty, the economy, the state of our industry, and life’s circumstances, it is important to project the need for replacing aging physicians as accurately as possible.
Over the last 25 years, there have been at least five different legislative measures that have stirred rumors of physicians either retiring early or going to find something different to do for a living. While the first five proved to be largely false alarms, one does wonder whether the implementation of MACRA will be the tipping point for many physicians.
Through 3d Health’s Provider Development Planning work across the country, we receive a number of Requests for Proposal (“RFP”) through-out the year. Many of the RFPs are constructed quite well while others seem to lack focus on what is most important in completing a plan.
Community Needs Assessment, Medical Staff Development Planning, Physician Resource Planning, Provider Resource Planning, Network Provider Development Planning, Recruitment Strategy – regardless of what these Plans are called, the impetus is to project the need for physicians, given a specific purpose.
Community Needs Assessment can be traced back to the late 1990s and IRS Revenue Ruling 97-21. The purpose of the Assessment was basic: determine whether a demonstrated community need existed in the local market in order to financially assist independent physicians with recruitment.
Medical Staff Development Planning was a natural outcrop of the Community Needs Assessment: if an Assessment is already being completed, why not figure out what is needed to support the hospital? From here, hospitals, health systems, and their consultants added one-on-one interviews, physician surveys, and Steering Committees with physicians and Board members. However, projecting the demand for physicians in today’s reality has become a much more robust and complex endeavor.
Over the past 20 years, medical staff development planning for hospitals and health systems has become increasing complex. Physicians continue to sub-specialize, advanced clinical providers (e.g. nurse practitioners, physician assistants) play a greater role in care today, the population continues to age, the physician workforce is changing, recruiting providers can be difficult (it may take years in some markets), physician alignment and institutional commitment are not static, and the level of competition is escalating.
When are your physicians retiring?
Succession planning is a critical component of any hospital’s Medical Staff Development Plan. But what is the average physician retirement age today? With typical recruitment lead times of two years or more, hospitals can ill afford not to pay attention to physician retirement timelines. In a perfect world, physicians and hospital leadership would have a dialogue two to three years before the physicians plan on hanging up the stethoscope. In reality, hospitals often receive a letter on November 30th - or even later - communicating a physician’s plan to retire at the end of the year. Happy holidays, right? This is a difficult scenario no matter the specialty, but can be crippling in specialties with only one or two providers, or with “superstar” physicians.
As such, hospitals must proactively plan for recruitment to support succession planning efforts. At a basic level, this means keeping an inventory of your physicians that are within three to five years of retirement. You can develop this inventory in any number of ways. However, unless you regularly speak with every aligned physician at your hospital about their retirement plans, we recommend developing a simplifying framework you can apply on a routine basis. Usually this involves an age analysis of your medical staff or aligned physicians and identifying those physicians above some set threshold.