Yeah, it happens. Most people can’t imagine the “wealthy doctors” being in a situation where they need to declare bankruptcy.
Consider this: physicians have had serious setbacks financially like any other business owner.
If physicians see themselves as business owners, they might pay more attention to the business of medicine. Although they are tied to the pursuit of health, they also have employees, pay taxes, high malpractice insurance premiums, and all the other expenses related to owning and running a business. The world of practicing medicine shrinks as large hospitals and other institutions gobble up the small group and single practitioner practices. Those who try to hang in there and go it alone are finding reductions in the reimbursements from third party payors (like Medicare and other insurance companies), more patients who opt to go to the larger institutional players because their insurance coverage dictates they must, and fewer patients who can afford to pay their co-pays under their insurance program.
It is true that the physicians of today are not and never were trained to be business owners. The code of helping people get well seemed to take care of the business side of it just because of the volume of patients. Not anymore.
Lifestyles and services which were based on the old method of payment are now going by the way. Ridiculous and frivolous lawsuits took their toll on the personal wealth of many physicians. And not paying attention to the business side of it was a major drag on their money management (if there was any).
So doctors are going broke. And for some, personal bankruptcy is the only salvation. The closing of a medical practice in a small community, especially one that is underserved, will further set back the health of the community.
What is a physician to do?
Ask for help. Sometimes taking inventory and speaking to a financial advisor along with a CPA who works with physician practices will get a doctor on the right path before it is too late. How sad would it be to start invading one’s retirement plans to make payroll next week? Yet this is what very busy professionals resort to. Take action today to avoid this unnecessary depletion of your assets. Call someone and get started.