Are doctors really going broke?
According to this piece from CNN Money, some are: “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.”
That’s all entirely true.
Pressure on reimbursement, combined with a lack of business savvy on the part of physicians, are both reasons.
But the part where I did a double take was at the opening of the piece: “Doctors are harboring an embarrassing secret.” Indeed, according to a hospital executive,
“Many are too proud to admit that they are on the verge of bankruptcy,” she said. “These physicians see no way out of the downward spiral of reimbursement, escalating costs of treating patients and insurance companies deciding when and how much they will pay them.”
Well, it shouldn’t be secret any more. Private practice medicine is running a small business. And if it’s managed poorly, it will go bankrupt, like any other business.
Consider the anecdote of the cardiology practice who has to take out loans to make payroll:
Dr. William Pentz, 47, a cardiologist with a Philadelphia private practice, and his partners had to tap into their personal assets to make payroll for employees last year. “And we still barely made payroll last paycheck,” he said. “Many of us are also skimping on our own pay.”
Pentz said recent steep 35% to 40% cuts in Medicare reimbursements for key cardiovascular services, such as stress tests and echocardiograms, have taken a substantial toll on revenue. “Our total revenue was down about 9% last year compared to 2010,” he said.
Is it any wonder why private practice medicine is dying? Or that more are willing to sell their practice for the security of a hospital-owned environment?
Physicians today continue to be vilified for being “rich,” but the reality is anything but. We need to tell stories of these dying small practices and how the pressure of running a business will soon interfere with patient care:
Dr. Neil Barth is that oncologist. He has been in the top 10% of oncologists in his region, according to U.S. News Top Doctors’ ranking. Still, he is contemplating personal bankruptcy.
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That move could shutter his 31-year-old clinical practice and force 6,000 cancer patients to look for a new doctor.
So, physicians, speak up. I’d be happy to post your story on KevinMD.com so you can be heard.
It’s time to change the narrative.
Kevin Pho is an internal medicine physician and on the Board of Contributors at USA Today. He is founder and editor of KevinMD.com, also on Facebook, Twitter, and LinkedIn.
