Government-backed Loans to Physicians Skyrocket

Small Business Administration (SBA) loans to doctors have increased more than ten-fold in the past decade, according to a report on CNNMoney.com (Doctors living on loans, 1-20-12). SBA says loans to physician offices rose from less than $60 million in 2001 to $675 million in 2011. In North Carolina, SBC loans to physician offices dramatically increased from $2.5 million in 2001 to $37.5 million in 2011.

“In this ever-changing health care environment, implementing an Electronic Health Record (EHR) is a huge expense to a practice, as is upgrading diagnostic equipment such as adding digital X-ray,” NCMS President Robert W. Monteiro, MD, said. “With costs rising and payments declining, practices need a financial bridge when they face cuts or delays in payments.”

Tom Blue, Executive Director of the American Academy of Private Physicians, told CNNMoney.com that doctors are struggling and are cash-strapped as they take out loans to make payroll and pay monthly expenses. Among the factors cited by physicians are declining insurance reimbursements, changing regulations and rising practice, medical liability and drug costs.

Adding to the struggle is the continued impact created by the yet-to-be fixed sustainable growth rate (SGR) formula used to set Medicare physician reimbursements. Temporary fixes and delays by Congress have only led to a much wider gap between what physicians receive and the cost of delivering care, raising concerns about medical practice viability and access to care.

For assistance in selecting and financing an EHR or other practice technology, contact Terri Gonzalez, Practice Technical Assistance Coordinator, NCMS Foundation, at tgonzalez@ncmedsoc.org or 800-722-1350.

 
 

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