Many Docs Are Struggling, and It's Their Fault; Obamacare Not Mentioned

January 8th, 2012 10:41 PM

A frequent BizzyBlog commenter tweeted about an online article he saw at entitled "Doctors going broke" about how many doctors are struggling in the current economy. His tweet: "Welcome to Obamacare."

A frequent BizzyBlog commenter tweeted about am online article he saw at entitled "Doctors going broke" about how many doctors are struggling in the current economy. His tweet: "Welcome to Obamacare."

What's interesting is that my tweeting commenter is right that Obamacare is definitely already influencing the viability of medical practices. But Ms. Parija Kavilanz's Friday report acts as if the mind-numbingly lengthy legislation and the torrent of regulations which appear destined to end up being huge multiples of that outrageous length don't exist, and actually blames many docs for their predicaments:

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.

The stories of doctors being lousy investors are legion, but to extend that to the idea that all of a sudden a lot of them have become inept at running their own businesses is ridiculous. What's happening is that the revenues many of them are receiving are plummeting while their workload remains unchanged. Meanwhile, the fixed costs of running a practice can't be changed on a dime.

Kavilanz does cite other factors, but makes sure to keep the following words which belong in his report out of it: "Obama," "administration," "Sebelius" (there are probably others, but that will do). The word "federal" appears once. The factors noted:

(One doctor) 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.

Gee, I recall that Obamacare cut about $500 billion out of Medicare over 10 years. This sure looks like one related result. Ask yourself how long any business, no matter how well-run, would last if it had to reduce what they can charge for every unit or consulting hour sold by over one-third.

Federal law requires that Medicare reimbursement rates be adjusted annually based on a formula tied to the health of the economy. That law says rates should be cut every year to keep Medicare financially sound.

Care to tell us which "federal law" or laws might be involved, Ms. Kavilanz?

I recently got a call from a divorced woman with two kids who is unemployed, house in foreclosure with advanced breast cancer," ... (one doctor) said. "The moment has come to this that you now say, 'sorry, we don't have the capacity to care for you.'"

While Zeke the Bleak Emanuel might be pleased with that situation, others of us are wondering if serious rationing has already arrived. If the woman involved can't find care anywhere, it looks like Obamacare's starvation of the Medicare system has already created what is for all practical purposes a "death panel" case.

Finally, there is a quote from Mr. Lion the CPA expressing frustration over how many docs don't understand "where and how their profits are leaking." That's fine, but where's the evidence that doctors are worse at running their practices than other small businesses are at running their operations? Remember, many small business don't make it beyond just a few years, while I daresay the average medical practice survives quite a bit longer.

Overall, Ms. Kavilanz's report irresponsibly dodges the big Obamacare elephant in the room. In fact, it almost reads like a justification for having doctors work for the government, because they're just don't know how to run things themselves.

You want inept? Just wait for Obamacare.

Cross-posted at