Many family physicians will decide at some point in their careers that, although they are not yet ready to retire, they no longer want to continue practicing full time. Scaling back used to mean having to leave a current employer to find work elsewhere. Now a small but growing number of physicians are establishing agreements or guidelines in their contracts that will allow them to pursue a range of “semi-retirement” options before they’re ready to call it quits.

Why a semi-retirement clause?

Physicians choose semi-retirement for all kinds of reasons. Some are forced into it by disability or family needs; others burn out or want different challenges. Even if retirement is currently the furthest thing from your mind, working with your employer or partners to add a semi-retirement clause to your current contract will give you valuable options you may not otherwise have. These might include a no-night or no-weekend call arrangement, night- or weekend-call-only arrangement, an ambulatory-care-only position, a hospitalist position, a reduced work schedule (e.g., half-time), extremely generous vacation allotments (e.g., 12 weeks or more annually) or a part-time clinical/part-time administrative position.

Should you decide to scale back, having semi-retirement options outlined in your contract ahead of time prevents discussion with your employer from becoming confrontational later on. It also helps reduce perceptions of favoritism that may develop in practices that handle the issue on a case-by-case basis.

Practices also benefit

There are many advantages to having a semi-retired physician stay with the practice. The practice can continue to get the benefit of his or her clinical expertise, goodwill, drawing power and name recognition. Patients who want to see that doctor can continue to do so. Patients who don’t have a strong preference can be transitioned to other doctors; however, the transition will be easier because it can be done more seamlessly than if the physician left the practice entirely.

Determining compensation

Making semi-retirement work in a group practice requires all principals to buy into it conceptually and economically. Some physicians will not accept one of their partners working less than full time, even if losing the physician entirely would affect the practice economically. Others accept the concept, but disagree on how to compensate the doctor.

Determining how to compensate everyone fairly is probably one of the biggest sticking points of keeping a semi-retired physician on board. For example, consider the physician who works one day a week doing administrative work and two days a week doing clinical work. Some groups may agree on a reduced amount of compensation (perhaps 40 percent of what the full-time physicians are receiving) for clinical work and a different amount for administrative activities. Others may prefer a point system for each piece of work performed by a physician (e.g., using a system based on relative value units, or RVUs). Others still may lean toward pure productivity when paying their doctors, believing that differences in work levels will eventually “shake themselves out.” It’s important to keep in mind that there is more than one correct way to determine compensation. Each practice needs to develop a compensation formula that best suits its needs.

Structuring the agreement

When crafting a semi-retirement agreement, the following options need to be considered and, if appropriate, addressed in the contract:

• Options available within the practice for semi-retirement;

• The amount of written notice a physician needs to provide before exercising his or her semi-retirement option;

• The length of time semi-retirement status may be maintained (e.g., for no more than five years);

• Whether eligibility should require the physician to have reached a certain age and/or number of years of service with the practice;

• Whether the number of physicians exercising the semi-retirement options at any one time should be limited;

• Whether that physician may retain ownership or must sell his ownership interest in the practice (some groups believe that only full-time physicians may be practice owners);

• How the physician will be compensated, also identifying fringe benefits and business expenses that the practice will provide;

• What work obligations the semi-retired doctor will be expected to meet;

• Whether another physician needs to be hired to take over part of the semi-retired physician’s workload.

If your employer doesn’t currently offer semi-retirement options, ask about it. Many are surprisingly receptive to the idea.

Other options

Unfortunately, not all physicians will be able to find what they are looking for in their current practices, but there are many opportunities elsewhere. One of my physician clients went to law school at night while working full time in her family practice. She now practices medicine three days a week and law two days a week. With her hands in both “cookie jars,” she is now much happier. [For more information on career paths other than traditional office-based practice, see “14 Alternative Practice Styles,” FPM, February 2001, page 33.]

The bottom line is that, as a family physician, you have many opportunities available should you decide to move away from full-time clinical practice. Adding a semi-retirement clause to an employment contract merely gives you more options to consider.