26% of Small Practices May Close, Survey Says

Susan Jaffe

July 02, 2012

July 2, 2012 (Washington, DC) — One third of physicians in small group practices who responded to a recent survey expect their 2012 income to fall below what they earned last year.

Financial pressures could have a devastating effect on physicians in practices of 10 or fewer participants: 26% surveyed said they might have to close their practice within the next 12 months.

"The survey was emailed in April to a random selection of 15,000 of the 200,000 physicians who are registered members of MDLinx, a medical news website, and 673 responded," a spokesman told Medscape Medical News.

A total of 49% of small practice physicians reported cutting staff and services to reduce operating expenses. Despite such measures, 23% said they have used personal savings, and 20% have had to borrow money to cover expenses.

By comparison, only 13% of physicians at larger practices or hospitals expected their income to drop this year.

"This poll is quite startling in the revelations about small practices, the healthcare lifelines to many communities," said Stephen Smith, chief marketing officer for MDLinx. "Physicians have had missiles raining in on their practices at an increasing pace—the economy, regulations, paperwork, insurance, lawsuits, etc."

Although the survey did not ask physicians to name reasons for the financial squeeze, 56% reported that Medicare and Medicare payments provided 75% of their income, according to a review of survey responses conducted by Medscape Medical News.

If the scheduled 27% reduction in Medicare payments takes effect next year, 61% of respondents said they would be forced to make additional cuts in services, and nearly 7% said they would have to close their practices.

"The coming retraction this survey hints at," said Smith, "would mean longer drives to less-personal, higher-cost medical care for millions of Americans."


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