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Thursday, December 2, 2021

As the cost of private equity transactions cuts, American doctors worry that patients are at risk

Kevin Robinson, an emergency doctor at a large American hospital, is trying to install a breathing tube for one patient, while another patient in the next room has an abnormal heartbeat.

In many hospitals of the same size, Robinson could have hired a doctor with similar experience to supervise the second patient. But here, he is alone. In 20 minutes, he left a third-year graduate student to try to stabilize the arrhythmia while he focused on the first patient—but failed.

Robinson does not work in the hospital. Instead, he is one of hundreds of thousands of emergency doctors employed by a private equity-owned doctor staffing group.

Like many of his colleagues, Robinson—his name has been changed—believes that his employer has cut costs so drastically that the situation is dangerous.

“Obviously, this is a patient who could have benefited from the supervision of the attending doctor,” he said of people with heartbeat problems. “For a place with this kind of volume and sharpness [medical urgency]It is not safe to have multiple attending doctors supervising residents and physician assistants. ”

In recent years, private equity groups have injected a lot of money into the US healthcare sector because they see opportunities in an aging society and spend more on maintaining health than ever before.according to A report Richard Scheffler of the University of California, Berkeley and Laura Alexander of the US Antitrust Institute pointed out that the annual private equity healthcare transactions soared from an estimated $42 billion in 2010 to $120 billion in 2019, and then fell to $96 billion in 2020 .

Annual deal value (in billions of dollars) histogram shows the private equity healthcare boom

In terms of first aid, groups such as KKR and Blackstone have acquired doctor staffing companies that hire doctors and deploy them in multiple hospitals. These companies sign contracts and bills, and get a share of insurance or patient payments. A doctor told the Financial Times that this ratio could be as high as 50%.

Staffing companies say they can provide hospitals with greater staffing flexibility on any given day.

But many doctors say that since private equity groups took over several HR companies in a wave of consolidation about five years ago, these companies have been cutting costs through layoffs and salary cuts.

Cost reductions have been particularly significant during the pandemic—even though their subsidiaries have received tens of millions of dollars in federal support—in part because pending legislation will limit the fees companies can charge patients.

The federal “No Accidental Law” that came into effect on January 1 will limit the fees that healthcare providers charge for treatments that are not selected by patients but are not insured—a practice known as “accidental billing.”

Robert McNamara, director of the emergency department at Temple University Hospital in Philadelphia, said: “Private equity firms have been squeezing doctors, reducing working hours and staffing.” Also reduced. All of this will affect the safety of patients.”

This situation has also raised concerns on Capitol Hill. Senator Elizabeth Warren, a Democratic Senator from Massachusetts, said in a statement to the Financial Times: “When private equity firms buy nursing homes and other healthcare providers, cost-cutting is rampant, making it difficult for healthcare workers to cope. Life-threatening personnel and supply shortages. The lives of patients.”

Two companies dominate the emergency doctor contracting industry: Envision Healthcare under KKR and TeamHealth under Blackstone.

Earlier this year, Envision formulated a new salary plan for its doctors, which the doctor told the Financial Times, which would result in a salary reduction of about 15%. The new system also directly links remuneration to doctors’ ability to charge patients. The doctor said that this can motivate them to undergo examination and treatment as soon as possible.

Doctors said that Envision has also cut doctors’ working hours and increasingly uses high-quality nurses to complete some of the doctor’s tasks at only a quarter of the cost.

at the same time, An analysis Bloomberg found that its affiliates have applied for at least US$60 million in government loans to support healthcare groups that are short of funds during the pandemic.According to reports, TeamHealth has also cut working hours and required anesthesiologists to take time off, while claiming A report US$105 million in government assistance.

Before this article was first published, TeamHealth did not respond to a request for comment. After its release on Thursday, the company provided a statement to the Financial Times.

TeamHealth said: “Like almost all providers, we had to adjust staffing levels in light of the sharp drop in visits-but during the pandemic, despite the huge financial costs, we kept these levels high. Than expected.” “Our clinicians continue to do heroic work for their patients, and we are committed to providing them with the resources they need to provide high-quality care in the context of a global pandemic.”

Envision stated that it “focuses on providing safe, high-quality care, putting patients first.”

“We tailor our care team—doctors and advanced practice providers—and models to meet the unique needs of the community based on multiple factors, including geographic location and patient population, needs and acuity level,” Envision said.

However, some doctors are shocked by this situation and are pushing the American Academy of Emergency Physicians to conduct more research on patient outcomes in hospitals that work in groups run by private equity.

“Emergency medicine has a labor crisis,” said Mitchell Li, a doctor who recently founded Take Medicine Back, an organization that opposes corporate ownership of American healthcare. “Private equity groups are cutting costs and worsening the conditions of doctors and patients. This is completely unsafe.”

A study Earlier this year, the National Bureau of Economic Research found that patients who go to a nursing home with private equity are 1.7% more likely to die within the next 90 days than those who go to another nursing home.

Although the waiting time is many part of this nation Is rising rapidly.

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