Once a rarity, Chapter 11 bankruptcy filings by physician practices are on the rise, afflicting "top-notch" doctors of all specialties, attorneys recently told CNN Money.
Bobby Guy, co-chair of the American Bankruptcy Institute's healthcare committee, who tracks bankruptcy trends tied to distressed businesses, said he had seen at least eight filings in recent weeks. Meanwhile bankruptcy attorney David Langley said he's handling the bankruptcy cases of an orthopedic surgeon and an OB/GYN, neither of which got into financial trouble as a result of being sued.
Rather, physicians say the culprits include shrinking insurance reimbursements, changing regulations brought on by health reform and other laws, and increasingly pricy malpractice insurance, drugs and other overhead expenses--all clashing with patient financial woes that have caused some to cut back on healthcare.
In a January post responding to a previous CNN story on the topic, internist and blogger Kevin Pho, M.D., emphasized the seriousness of those challenges and agreed with industry opinion that doctors' lack of business acumen is part of the reason many have difficulty keeping their practices afloat during tough times.
"Private practice medicine is running a small business. And if it's managed poorly, it will go bankrupt, like any other business," Pho wrote, adding that the problem should be discussed and addressed openly, not treated as an embarrassing physician secret. "We need to tell stories of these dying small practices and how the pressure of running a business will soon interfere with patient care," he wrote.
As for the physicians discussed by CNN, many were able to keep their practices open despite dire financial straits, but not without constant stress and worry. "Every payroll, I wonder if we will be able to keep doing this," solo internist Morgan Moor, who was able to restructure her finances without filing for bankruptcy, told CNN. "I try not to think about it because it paralyzes me with fear."