According to an article in CNN, some doctors in the U.S. are going broke. Read it here . I feel sorry for anyone who goes broke, but this is not unexpected.
According to the author, some doctors have unsustainable debt and are facing reimbursement reductions by insurers. A good question is why the unsustainable debt? After all, many of our institutions have become bloated and can’t adapt to the economic downturn.
The article mentions a cardiologist who is going broke. According to a StudentDoc survey, the average cardiologist makes $403,000 per year. The average cardiovascular surgeon makes $558,719 per year. That’s not bad in either case.
My point is a lot of very highly paid people in every walk of life end up in bankruptcy. No matter how much you make, you can always spend more. I believe the health care industry has been as guilty of over-optimism as the real estate and finance sectors.
People have been saying for years that many clinics and hospitals will face a solvency crisis brought on by excessive borrowing to fund sleek new facilities and excessive purchases of uber-costly medical equipment. Some doctors became wealthy during the good years, and some of them made purchases not easily retracted now that the economy has turned down.
Let’s not blame health insurers. They represent the voice of their policyholders who are hurting economically.
Hospitals have been buying doctors’ practices on borrowed money for years. The ones that paid exorbitant prices are soon going to be hurt badly. We are seeing the leading edge of that now. In five years large numbers of hospitals will be looking for bailouts.
Thomas G. Emerick is the president of Emerick Consulting, LLC. He has served on a variety of employer coalitions and associations including the board of the National Business Group on Health and the U. S. Chamber of Commerce Benefit Committee. He blogs at Cracking Health Costs.