Senator Scrutinizes Physician Staffing Firms and Their Private Equity Owners

by Kristina Fiore, Director of Enterprise & Investigative Reporting, MedPage Today
April 8, 2024

A Michigan senator has asked four emergency department staffing firms and the three private equity companies that own them for more information about their business practices following concerns raised by emergency physicians.
Sen. Gary Peters (D-Mich.), chair of the Homeland Security and Governmental Affairs Committee, asked for information from Blackstone, KKR, and Apollo Global Management and their respective staffing firms TeamHealth, Envision Healthcare, US Acute Care Solutions (USACS), and Lifepoint Health.
Peters wants to know more about business operations, staffing decisions, patient care, and safety at emergency departments across the country, following interviews by his office with more than 40 emergency physicians who raised significant concerns about patient care at private equity-owned hospitals and staffing companies.
They also worried about their ability to provide care in the event of a major emergency, such as a mass casualty event, terrorist attack, or future pandemic, according to a statement from the committee.
“I am concerned that our nation’s largest emergency medicine staffing companies may be engaging in cost-saving measures at the expense of patient safety and care, which could put our nation’s emergency preparedness at risk,” Peters said in the statement.
In each of the four letters, addressed to the CEOs of the companies, Peters noted that while many of these issues “are not limited to private equity, they are exacerbated by the private equity business model, which hinges on highly leveraged debt, little equity, and the need to obtain outsized returns within a limited time.”
He added that data on private equity ownership of physician staffing firms is “largely nontransparent.”
The letters said that the four largest staffing firms in emergency medicine are owned or controlled by private equity companies — which is problematic in light of recent financial troubles among those companies. Envision filed for bankruptcy last May, and TeamHealth has a payment of over a billion dollars due this year, the letters stated. In addition, USACS is facing a forced sale if it is unable to pay its private equity investors by 2026, according to the letters.
Another private equity-owned staffing company, American Physician Partners, abruptly shuttered in July 2023 and filed for bankruptcy 2 months later, the letters added.
These companies ran into financial troubles following the enactment of the No Surprises Act, which ended the practice of “surprise billing” or balance billing. Peters said Envision and TeamHealth engaged in balance billing for many years.
The letters follow discussions between Peters’ office and the American Academy of Emergency Medicine and Take Medicine Back, two physician organizations that have long decried the impact of private equity and business concerns on the practice of medicine.
Mitch Li, MD, founder of Take Medicine Back, told MedPage Today in an email that Peters’ office was “compelled by the gravity and substantiveness of our concerns, and the implications for the country’s readiness (or lack thereof) for disaster preparedness — man-made, natural, terrorist, pandemic, etc.”
“Although they [Peters’ office] fully recognize that the problems affect all of the profession — all of healthcare — and that they are not limited to…