For Kootenai Health CEO Jon Ness, the right time to retire came down to the state of the Coeur d'Alene, Idaho-based health system.
"I've always really enjoyed the hospital CEO role," he told Becker's. "I wasn't really enthusiastically looking at retirement.
"But for me, the key thing was that … after two years of COVID and labor shortage, the financial situation had stabilized … and [the organization] was better prepared for a leadership transition. If that hadn't occurred and we continued to struggle financially or with a labor shortage, I probably would have held off on retirement. I want to leave the organization in the best possible condition that it can be in going forward for the next CEO."
When it comes to retirement, there is no one-size-fits-all. Hospital and health system executives retire at different ages and for various reasons. This raises the questions: What is the average retirement age for hospital executives? What prompted specific executives to retire when they did? What made it the right time?
The average retirement age
Data from executive search and advisory firm WittKieffer suggests retirement ages are increasing from one decade to the next for all key roles. The firm examined the retirement age of healthcare executives based on the data available in its database.
Generally, a significant majority of healthcare executives retire between the ages of 56 and 72, with variations in the average retirement ages based on their specific roles, according to its analysis of more than 1,000 retired healthcare executives since 2000 (focusing on key positions including CEOs and other C-suite executives, including CFOs, COOs and chief medical officers).
The firm also found that CEOs typically retire at around age 64, while COOs tend to retire at 62, CFOs at 63 and chief medical officers at 67 (i.e., average retirement ages since 2000).
"Since the early 2000s, there has been a shift in the retirement patterns," Paul Bohne, managing partner in the healthcare practice at WittKieffer, told Becker's. "Thus, the retirement age for healthcare CEOs has demonstrated a consistent increase over the years: starting at 62 from 2000 to 2009, rising to 64 from 2010 to 2019, and further increasing to 65 since 2020."
Mr. Bohne said this trend is also reflected in other C-suite roles, with the average retirement ages for COOs, CFOs and chief medical officers trending upward over the last two decades, now aligning more closely with the traditional retirement age. COOs now retire around the age of 64, CFOs at 65, and chief medical officers opt for retirement at age 68 (i.e., average retirement ages since 2020).
Mr. Ness, who is 68, will retire later this month, a decision that follows the completion of Kootenai Health's conversion from a district hospital to a 501(c)(3) nonprofit organization.
Like many health systems, Kootenai Health developed an executive succession plan, a process that began years ago. Mr. Ness originally planned to retire in 2021.
"[However], we were in the throes of a significant and difficult COVID-19 situation," he said. "And there was no way I was going to step down during that.
"And we got through COVID-19 like hospitals did, and then we found ourselves in 2022 in a really difficult labor shortage situation. And once again, I didn't feel it was responsible to step down during that. And so the board had asked me to stay a couple extra years, which I did."
Mr. Ness said the aforementioned succession plan and circumstances led to his decision to retire, adding that age was not a factor for him.
His overall philosophy: "You don't step down as a leader when the organization needs you the most."
The "right time"
As far as the right time to retire, there is no designated age, according to Mr. Bohne.
"A lot of personal and professional factors play into the retirement decision," he told Becker's. "Ideally, retirement will come after a planned, multiyear succession process and a leader is ready to retire emotionally and financially and works with their board to orchestrate a planned transition to an internal or external successor, especially in the case of a CEO."
Mr. Bohne said his firm sees many leaders retiring at key inflection points personally, and/or with their hospitals or health systems, such as a new CEO or board leadership mandating changes, or the organization making a strategic shift, or a merger.
"These can be times when a leader says, 'Maybe I'll just exit stage right and let others take over from here,'" he said.
Many CEOs and other executives face stresses and pressures in their roles that stem from their personal lives. One health system CEO told Becker's last year that unaddressed isolation and burnout could be contributing to executive turnover.
"We feel as leaders that we have to be confident, we have to walk into a room and we have to take command, we have to show that we know what we're doing, we have to have all the answers," Jeff Comer, PsyD, told Becker's. "And of course we can't; that's not possible. But that's kind of the story we tell ourselves. And when we have burnout, a lot of us executives feel shame because we don't feel strong. We feel that we're weak."
Healthcare leaders are also looking for ways to stay on and extend their careers just as much as wanting to retire, according to Mr. Bohne.
"They do it for the same reasons they started decades before — to make a difference in the lives of patients, families, communities and colleagues," he said. "People get to this level because they want to have impact and the passion to make a difference doesn't diminish."
Mr. Bohne said he has also seen executives delay retirement because they wanted to see a major project or initiative (such as opening a new facility) completed, or see their organization through a period of turbulence or leadership succession.
Take Melinda Estes, MD, CEO of Kansas City, Mo.-based Saint Luke's Health System, for example, who initially planned to retire at the end of 2021 but chose to remain and see Saint Luke's through the challenging time of the pandemic. She retired amid the completion of the merger of St. Louis-based BJC HealthCare and Saint Luke's. The deal was finalized in January.
Mr. Bohne added that many recognize the right time, but he also has seen leaders hold on longer than is healthy for an organization and "who don't foster goals with succession planning, in spite of their dedication and otherwise honorable intentions."
"The idea of stepping away and retiring is scary for many, especially for those whose identities and egos are intertwined with their office and who have neglected outside interests and hobbies," Mr. Bohne said. "One solution we've seen is that many look for work as interim executives. This gives them the freedom to select their assignments, to commit for a finite period of time, and to 'stay in the game' longer."
Mr. Ness, with Kootenai, said it was the right time for him because he knew he was leaving the organization in a strong position for Jameson "Jamie" Smith, who was selected as the new CEO. Mr. Smith joins the health system from Intermountain Health's Saint Joseph Hospital in Denver, where he spent the past eight years as CEO.
Once hospital executives do step down, they do not necessarily close the door on returning to similar roles. But at least two leaders who recently retired plan to slow down.
"I will tell you my immediate plan — as my daughters have both told me — is to do nothing for a little while before I decide what I'll do next," Dr. Estes told Becker's last year.
Mr. Ness said he is not making any commitments for the first six months of his retirement. He has plans to watch college basketball, attend the Kentucky Derby and visit the Grand Canyon.
"But I've not made any commitments to any professional endeavors or even volunteer activities at this point," he said. "And I want to evaluate what would be the best fit for me and my wife going forward."