Tuesday, November 22, 2005

Student Loans Strangle Business Growth II

Oh, I forgot to tell you how this affects business.

The loans weigh heavily on all college grads--especially if they are doctors like me--who are new business owners upon graduation. The attrition rate for chiropractors is somewhere near 50% within 5 years. Although that might be urban legend. Not sure. No chiropractic schools want these stats out, that's for sure.

A medical doctor friend had $250,000 in student loans. A dentist can have north of $100,000 if he or she goes on to specialize and then a one chair set-up (you know the spit bowl, plumbing, moving chair) costs over $250,000.

It is tough to feel sorry for these people, right? But the ones you're seeing are either gutting it up and just getting by (way more than anyone would like to admit), or doing relatively well. You're not seeing the failures who are stuck with the student loans and business debt.

Now, lets add insurance. We have malpractice (a huge expense depending upon the specialty), liability (someone slips and falls), disability, health (we are a small business and pay through the nose with over a $5,000 deductible) and our personal life must be insured to the hilt because doctors are big targets.

1/10o doctors are audited by the IRS each year. 1/2000 U.S. citizens in other professions are audited. So you better pay a good CPA and have a financial advisor advising your every move.

Doctors must comply with inane insurance regulations that change every day and cost money. One insurance company paid for patient care rendered over a year and a half ago. Insurance companies are in the business of finding a reason NOT to pay. Try managing your cash flow with that kind of repayment schedule.

Some insurance companies pay such lousy reimbursement that we get paid less than half what we charge a cash patient for the same treatment. An orthopedic surgeon I know gets $200 for a Medicare knee replacement surgery!

It's insane.

Chiropractic enrollment and enrollment in medical schools are declining. Doctors are picking specialties that don't interfere with their families as much--radiology, pediatrics, anesthesiology, for example. That's a good thing--for families.

And the Boomers are getting older just as the medical field receives heavy disincentives just to stay in practice.

Every old-timey doc says "Boy, I'm sure glad I'm getting out now. I wouldn't want to be starting today."

And it all begins in graduate school with student loans. Do we really want this kind of profession to be the home to trust fund kids and special interest quotas?

Shouldn't the medical profession be filled with smart, dedicated people who enter the profession with desire to serve and the intelligence to serve well? Student loans should be helping these people get into a profession that needs talent and hard work. Instead, student loans bury the doctor before he or she can get a start.
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