Doctors Bankruptcy Filings Increase

Doctors have been forced into bankruptcy at higher rates. According to the Public Broadcasting Station, “Half of the primary care doctors in the U.S. are at some financial risk for the care they give.” They are not filing for bankruptcy due to malpractice lawsuits. Simply put, a doctor’s office is a small business. If the business is not operating properly, it will fail. Managing and operating a doctor’s office has become more complex. The physicians are trained to treat patients. They are not trained how to run businesses.

Reasons for Bankruptcy

Why are doctors bankruptcy filings increasing? Doctors are filing bankruptcy because of a weak economy. They are also filing because they are receiving lower reimbursement rates. Then, there are other reasons such as medical malpractice insurance costs and operational costs.Some doctors are using Chapter 7 bankruptcy NJ to survive.

Weak Economy

First, consumers are making less doctor visits due to the weak economy. They do not have the money to pay for cosmetic surgery or elective surgery. Young women are not scheduling a visit to the surgeon for a face lift or breast enhancement. Patients are not going to the doctor because they do not have money to pay for the visit. The doctor makes money based on how many patients he or she treats. Health care insurance companies are making record profits and beating analysts forecasts because Americans have been avoiding doctors in a weak economy.

Lower Reimbursement Rates

Next, doctors are saying that lower reimbursement rates are also contributing to the increase in bankruptcy fillings. Some physicians have signed risky reimbursement contracts with health care providers and government agencies. For example, the cardiovascular doctor may get 30 percent to 40 percent less reimbursement on services such as stress tests and echocardiograms. This problem can force a physician into Chapter 7 bankruptcy NJ. Physicians should avoid signing risky contracts. These contracts will keep their medical practice in red ink. On top of this, some physician’s have made bad business decisions.

Medical Malpractice Insurance
Then, doctors have seen a dramatic increase in the cost of medical malpractice insurance and operational costs. According to the Congressional Budget Office, medical malpractice insurance increased by 15 percent between the years 2000 and 2002. In some states, this type of insurance policy costs more than $100,000 a year. On the other hand, doctors have expenses for employees, office rent, supplies, drugs and equipment. It takes money, skills, and talent to successfully operate a medical practice. Doctors can stay afloat and survive but they have to obtain the right resources.

Finally, physicians can seek help before the situation gets too difficult to manage. Chapter 7 bankruptcy NJ lawyers will be glad to listen to you. They will explore all your options so that you can continue to treat patients and generate revenue.

Jenny Ackerman is currently blogging for a chapter 7 bankruptcy nj company. She enjoys blogging about financial issues companies are facing and also giving tips on living a stress-free financial life.

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