A lot has been made of the fact that medical debts are often a key catalyst in Chapter 7 bankruptcy filings.
However, Orange County Bankruptcy Attorney Vincent Howard has noted a trend on the flip side of that coin: Doctors who are going broke.
It's unclear whether the new Affordable Care Act, also know as ObamaCare, which was recently upheld by the U.S. Supreme Court, will curb the rate of doctor-filed bankruptcies, but the hope is that it may help.
Of course, it isn't an issue many physicians like to discuss. They are used to being in the position of having the answers. For them, the possibility of a bankruptcy throws them. That's why many end up putting it off until they are in extreme, dire financial straits.
The fact is, half of all doctors in the country operate private practices. These are the doctors hurting the most. The concern is if you put all of them out of business, that loss of access to health care resources could really hurt our communities. With Chapter 11 bankruptcies, there are ways that doctors' offices can be absolved of that debt, and still maintain their practices.
So what's to blame?
Analysts say the problem is multifaceted. Doctors are blaming changing regulations, rising drug and business costs and dwindling insurance reimbursements. And of course, these are certainly part of the problem.
However, industry insiders say part of the problem is also that these are doctors, not businessmen and businesswomen. If they are a smaller practice without the resources to hire a full-time accountant, mistakes can be easy to make.
Some doctors are taking out loans just to pay payroll. With 35 to 40 percent cuts to Medicare reimbursements for standard tests, total revenues have plummeted. Just to stay afloat, doctors' offices have had to take out loans just to pay their staff. This sets them on track for a perpetual debt cycle.
One oncologist, speaking with a reporter from CNNMoney, was quoted as saying that in order to ensure his staff would be paid, he hasn't taken a paycheck in over a year. On top of that, he said, he owes more than $1.5 million to drug companies for medicines for which he wasn't reimbursed.
In cases such as this, personal bankruptcies are being considered.
Cancer drugs are a good example of how the industry has suffered in recent years. While doctors used to be able to earn a profit off the cancer drugs they prescribed. But a revision to the law in 2005 reduced Medicare reimbursements for these medications, often to a lower rate than what those drugs actually cost. So doctors end up eating that cost.
One doctor, who admitted he had fallen into more than $3 million in debt for this reason, was quoted as saying he was sickened because he could no longer care for seriously ill patients without weighing every single penny first.
Some have battled the debt by taking on second jobs, but sometimes even that isn't enough.
We can help.
Orange County Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
Doctors going broke, By Parija Kavilanz, CNNMoney