Bobby Guy, co-chairman of the American Bankruptcy Institute's healthcare committee and a bankruptcy attorney in Nashville with Frost Brown Todd LLC, said he noticed a spike in Chapter 11 bankruptcy filings by physician practices. Physicians often carry a good deal of debt due to the costs of opening an office, diagnostic machines, etc., so a prolonged downturn in revenue can have serious repercussions.
"Eight filings in three weeks is very unusual," Guy told CNN/Money.
Doctors also blame shrinking insurance reimbursements, changing regulations and the rising costs of malpractice insurance and drugs -- especially chemotherapy drugs -- adding to shrinking bottom lines.
Dr. Dennis Morgan, had a profitable solo oncology practice in Enfield, Conn., for years, but when reimbursements for treatment and drugs to oncologists started shrinking, he had trouble meeting expenses and instead of keeping patients alive, he tried to keep his practice alive.
For two years, his job was "that of a captain of a sinking ship managing the allocation of life boats until rescue arrived," he told CNN/Money. He redirected his patients to other doctors and hospitals, but early last year, he stopped practicing medicine.
Dr. Morgan Moor, an internist with a solo practice in Brentwood, Tenn., said the recession badly hurt her once-thriving practice and by 2010, she had lost almost half of her active patients, her annual revenue dropped nearly 30 percent and she had to lay off half her employees.