Doctors in Trouble

Doctors in Trouble January 6, 2012

From CNN:

The issue here is not just “why” but “so what”: and the so-what question is that if our national healthcare system kicks in we will need more doctors not fewer, and if many are already running into deficits … well, this isn’t good.

NEW YORK (CNNMoney) — Doctors in America are harboring an embarrassing secret: Many of them are going broke.

This quiet reality, which is spreading nationwide, is claiming a wide range of casualties, including family physicians, cardiologists and oncologists.

Industry watchers say the trend is worrisome. Half of all doctors in the nation operate a private practice. So if a cash crunch forces the death of an independent practice, it robs a community of a vital health care resource.

“A lot of independent practices are starting to see serious financial issues,” said Marc Lion, CEO of Lion & Company CPAs, LLC, which advises independent doctor practices about their finances.

Doctors list shrinking insurance reimbursements, changing regulations, rising business and drug costs among the factors preventing them from keeping their practices afloat. But some experts counter that doctors’ lack of business acumen is also to blame.



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  • Do I see a bail out for doctors coming? This would be too perfect for Obamacare and make it so easy for the gov to control them. Maybe the gov would make it so hard for them to pay back the loans that they would be indentured to them indefinitely.

    Alas, this is mere speculation on my part right?

  • RLF

    So let’s see, an industry (medicine) that gets guaranteed government funding (Medicare, etc.) and that increasingly enjoys protections from liability (a la, tort reform in the states and even promoted by Obama), is crying foul over wages?? Really?? Where average wages are above $150k/year and higher depending on the specialty? See They make a lot of money and cannot manage it and complain that the system is unfair to them? I don’t buy it, but there’s too much here for a small blog posting. Where is the humility? (Mt. 5:5) Doctors don’t build small houses.

  • Tim

    I agree with #2, Doctor’s cannot be going broke because of regulations, smaller reimbursements, and rising drug costs. They are going broke because of the high standard of living many subscribe to and poor management and business skills. The reality is that most Americans live above their means, including highly paid doctors. I work for a doctor who is in debt because of where he has chosen to live, not because of being paid less and rising costs.

  • Prodigal Daughter

    Ugh. I am going to have to disagree with #2 and #3. My husband is a physical therapist who owns his own practice. And I am his billing assistant. You would be SHOCKED by how little Medicare programs pay and how inept they are at paying when they do. Insurance reimbursement has gotten SO bad that he had decided to be an out of network provider, which poses it’s own problems in an economy where most people try to stay in network to make the most of their healthcare benefits. A few years ago, many PTs in our area went out of business when our state cut benefits to special needs kids. These PTs who had specialized to this population went under for lack of clientele. Do some homework, before you judge the lifestyles of doctors. In many cases, the system is slowly squeezing many out of business.

  • Peter

    I am sympathetic to a degree. I returned from working in SE Asia for six years not just broke, but up to my eyeballs in debt. Financially and emotionally returning to private practice was out of the question. I got a salaried postion, lived with friends for five years, completed “the Dave Ramsey thing,” and bought a two bedroom condominium. This was possible because I knew that I wasn’t rich.
    Before I left for SE Asia, like most other doctors I lived beyond my means; if my income then had been cut the way doctors’ incomes now are being cut AFTER I had made all my finacial decisions (house, car, private schools for the kids, etc) based on the income that I then expected and rec’d, I would have gone broke, too. So, could they have chosen simpler lifestyles and been protected from this crisis? Probably, but they (we?) are not the only ones living at or beyond their means in this culture.

  • DSO

    Things will be fine for the doctors once they become government employees. Just read in the news today that the White House will push for a pay increase for federal employees.

  • Dana Ames

    The county where I live has a population of roughly 35,000, and about half of those are within about 10 miles of the city where I live, the county seat. One of my medical transcription clients is a 2-doctor ENT practice. In the 11 years I have transcribed for them, Medicare and insurance reimbursements have shrunk beyond belief. The cost of minor surgical equipment has indeed gone up. I happen to know my doctors do not make anywhere near $150K per year, and both have been in practice long enough to have no educational loans to pay off. The older of the two is actually quite business-savvy.

    This year they sold their practice to a primary care group owned by our local hospital (which gets gov’t subsidies because it is located in a rural area and serves most of that 35,000 population), simply so that they could continue to practice medicine. For six months before that, they had been dipping into their retirement savings to the tune of $15K per month simply to keep the doors open. If they had had a third doctor to be able to do more surgery, they would have been able to survive as a private practice, but most doctors do not want to practice in a rural area, even though this is a great place to raise kids. Most of the doctors in our community are 60 years old and older.

    Commenters 1,2 and 3, go talk to some doctors, especially those who are caring for the under-served (who actually may have insurance), before you make those blanket generalizations.


  • Dana Ames

    And Commenter #6,

    My husband is a +30 year Federal employee whose salary that whole time has been consistently lower than what he would have earned if he were employed in the private sector in a position corresponding to his education and experience. His salary has been ***frozen*** for the past two years. Has yours?

    (BTW, the salaries of our members of Congress have *not* been frozen… So much for the Tea Party Republicans’ commitment to cut gov’t spending…)

    I don’t usually approach sarcasm, and I don’t mean to offend – but folks, y’all ought to be acquainted with some facts before you comment.


  • DRT

    Well, I suspect that Doctors are much like most professions these days where the people with corporate jobs are doing ok, those who have been layed off are experiencing the depression, and those who own their own business are facing a much more competitive environment and barely staying afloat. My business falls into that category, but I am lucky enough to also have a corporate job.

    The MD’s I do know seem to be doing fine, but the dentists seem to be hurting a lot. I hope some of the emails I sent today to docs I know will give me some data, but I expect it to be like my first paragraph.

  • Jeremy

    As I understand it, the issue is that in private practice, doctors get whatever is left over after expenses. This is coupled with a low value placed on general practice and steadily decreasing medicare payouts.

    The problem as I understand it is that most insurance companies, particularly the big ones that wield a lot of power, base what they pay on medicare, so while overhead is increasing, payouts are all around decreasing. Basically, medical costs are rising for the consumer and the doctor, but the money insurance companies are paying out is decreasing…odd, yes?

  • Mike M

    As a physician who used to work for corporations (“hospital systems”) and is now a private practioner, it is sad to read so many opinions based on fantasy and not fact. This is hard, hard work and my personal income last year was under the poverty level. If Medicare decides to pay at all, it’s now 40 cents on the dollar billed. Do any readers realize that hospital systems get 3x the reimbursement rate so that the executives can give themselves huge bonuses? Do your homework first before casting stones. The ex-CEO of Aurora here in SE Wisconsin got a $20 million bonus on retirement. You can bet that a large percent of that was from government reimbursements. And he had much less schooling than the doctors he controlled.

  • Norman

    It makes me angry that people would blame doctors for a lack of business acumen. If extensive over the top business acumen is going to be a perquisite to becoming a doctor and being able to stay afloat then we need to look at why contemporary business structures would make it so difficult for doctors being able to run their practices and stay afloat. That speaks more to the growing regulatory red tape and other outside issues becoming so burdensome that it takes a gifted business man and a gifted medical practitioner to have a chance in that environment. We have raised the bar of human qualifications to the point where population supply just can’t meet the needed numbers for the combined “qualified” business and medical Virtuosos. That is a self-imposed governing societal infrastructural problem it seems to me.

  • Ya! What Dana said!

    The medical and dental professions are no longer what they ought to be. It isn’t simply a matter of providing care. It’s big business tied to broken systems – insurance industry, pharmaceutical industry, government, etc.

    Yes, some doctors live beyond their means, but poor financial choices aren’t limited to doctors.

    @Jeremy, yes. That is part of the problem. Then add our lawsuit-happy culture, which creates a liability issue that is out of control.

    And this all started before Obamacare, FYI.

  • Prodigal Daughter

    Mike M, I think you’re being generous when you say Medicare pays 40 cents on the dollar. 🙂 At least for PTs, it’s more like 12 cents at best and 5 cents at worst.

  • From the trenches

    Prodigal Daughter, Dana Ames and Mike M. are right. My husband’s practice went under. We are now attempting to pay off the debts. It’s just not a sustainable business model.

  • ChrisB

    Did you notice Medicare is designed to pay 2-3% less each year even though the cost of everything goes up? The system seems designed to break medical practices.

  • AHH

    My brother the MD, who is not broke but has to work too many hours, puts most of the blame on the insurance industry. If he didn’t have to spend so much time wrestling with insurance companies to try to get care for patients, and to try and get paid for the care he provides, he could make a living with a reasonable workweek like 50 hours.

    It is unfortunate that, after all the lobbying was done, the wimpy health care reform we ended up with did little to curb the insurance industry. There may be disadvantages to a single-payer system, but it would allow doctors to give more attention to actually caring for patients rather than wrestling with insurance companies.

  • DSO

    Commenter #8, yes my wages have been frozen for years. I used to teach at well known Evangelical schools where I have not received wage increases and make a fraction of the full-time teachers.

    It sounds like you have a job. Good for you. Can you make rent this month? How about putting gas in your car? Instead of railing against those evil conservatives why don’t you look clearly at the guy you enthusiastically voted for in ’08 and the party to which he belongs?

    You have a job, good for you. You can pay your bills, good for you.

  • DSO

    Commentator #8, I’m sorry if that came off as mean. It is just hard to pay rent and utilities when I don’t have a job, it seems nobody is hiring and my wife’s unemployment is only $118 a week.

    I don’t think any of us like the state of the economy right now. I am grateful I can trust in the Lord literally for my daily bread. He gives us peace despite what our politicians do.

  • Dana Ames


    I’m sorry for your troubles. You’re right; I do have a job (though with the switch in my doctors’ practice I described above, the way things worked out I am earning less) and my husband and I can pay our bills, and I am grateful.

    All I wanted to say was that the vast majority of Federal employees are solidly middle class, not “fat cats”. And it is the middle class that always takes the hits when the economy is difficult no matter who is in the White House.

    I don’t think conservatives are evil. For myself, I’m a “decline to state”; I’m almost as disgusted with the Democrats as I am the Republicans, and I don’t really “fit” anywhere politically. Yes, I don’t agree with everything Obama has done, but I did enthusiastically vote for him in ’08 and I’ll vote for him again this year, and this is why:

    -Attitude. Obama acts like an adult. At least the Democrats would not consign a non-insured person with a life-threatening disease to the grave, and they have room in their consciousness for shared responsibility toward all citizens.
    -Obama inherited the mess from the previous administration. The only Presidential vote I regret casting was for Bush2 in 2000.
    -Obama has actually done many of the things he promised.
    -I will not vote for “culture warriors” or anyone else who does not put forth actual policies for which they will work. I’m so tired of negative, say-nothing politics.
    -Historically, the economy does better with Democrat administrations. One example of many:

    Again, I hope things get better for you soon.


  • Wow.The vitriol against doctors in some of these comments is just astounding. My son and his wife are both primary care physicians. They left medical school with six figure debt. My DIL works half time for the largest health care provider in our area. My son used to work there full-time, but was worn out by the 18-20 patients he was urged to see EVERY DAY, meaning max of 15-20 minutes per patient. He felt he couldn’t do good medicine on that schedule. He is now scrounging 4 different jobs to try and cover expenses, receives dismal payouts from Medicare and wonders why in the world he put in so much time and effort to become a doctor in the first place. And these two are fine doctors – caring, willing to work hard, smart, patient with the most demanding people. Do a little research, folks. Primary care physicians are a dying breed and we will all suffer when they’re gone.

  • Mike M

    Amen, Diana. You hit the nail right on the head: most doctors care about the health of their patients while trying to feed their families. The executives of the hospital systems, insurance companies, and pharma companies don’t care about you or me. To paraphrase George Carlin, they just don’t care. If your son and wife want to practice medicine like it should be (not the Obamacare assembly-line governmant way) let me know.

  • DSO

    Dana @20, thanks.

    FWIW every President inherits problems from the previous administration. One of the votes I regret was voting for Jimmy Carter. Seemed like a good idea at the time. What do you suppose the next POTUS will inherit? As I read your analysis of things I have come to the conclusion that we look at the world differently. I doubt either of us will convince the other to the error of their ways.

    Guard your heart, it is the wellspring of life.

  • Anon

    My cousin is an oncologist, lives in a $5M house (it could be way more because it is an entire compound), and pays $20,000 a month in child support and alimony to his two ex-wives. I would wager he makes several million a year from basically prolonging the lives of people a year or two. His parents paid all his college and med school expenses so he graduated with no debt. He is an illustration of part of what is wrong with our health care system.

    Sure, he cares about the health of his patients. He has to be there at the deathbed. But he also cares about becoming wealthy and is a vocal critic of any health care reform, for the simple reason it would cut into his earnings.

    But it is you and I who are paying him millions, and frankly he is not worth millions. Is his job more difficult and more important than the president’s, or someone who teaches children in the hood? Give me a break.

    The people of this country (ie the government) should pay for med school, and in return the new doctors become civil service employees, where they can practice medicine and heal people freely, without having to run competitive businesses focused on profit.

  • Mike M

    Anon: let’s hear from your cousin. I’d hate for my cousin to speak for me like you presume to speak for him.

  • Mike M

    My sister is a lawyer. What makes anyone think I can therefore speak for lawyers? Yet even the most debased anti-physician bumbler thinks he can speak for all physicians. Strange times, indeed.