According to five annual reports published by the American Medical Association (AMA) from 2013 through 2017, the top financial concern of US physicians is retirement. The reports revealed that having enough money for retirement is a chief financial concern for physicians. The studies give us great insight about how to attract and retain physicians.
It’s no secret that paying off school debt is a top concern for young physicians in residency and physicians in their 30s. However, young physicians in residency and physicians in their 30s are also concerned about having enough money to retirement.
When you begin to put together the pieces of the puzzle, we see that tuition reimbursement programs are an effective tool for attracting young physicians. Obviously, they do nothing to attract physicians who have paid off their debts, which generally includes older more experienced physicians. Unfortunately, tuition reimbursement programs usually do not retain physicians long-term because once the time commitment is up the physicians often leave. To solve this problem, health care organizations utilizing tuition reimbursement, should add private pension plans with long-term vesting periods as part of the compensation package. The addition of the private pension plan with the long-term vesting period gives the physician something to lose when the time commitment for the tuition reimbursement program is up. Then when the physician’s school debt is paid off, retirement becomes the physician’s top financial priority. At this point, the physician should have significant time built up in the vesting period and is now tied to the organization for the duration of a long vesting period (10 to 20 years).
The five AMA reports all showed that physicians in their 40s, 50s, and 60s list having enough money for retirement as their number one financial concern. This one piece of information holds the key to overcoming the challenge of physician recruitment and retention. A lifetime income stream that could support a comfortable retirement is an attractive offer to physicians. The 10 to 20-year vesting period mitigates enormous turnover costs and makes it an attractive investment for healthcare employers.