Intermediation 2.0

“Here is a Ducat” artist unknown [source]

It’s not news that the health care system in the U.S. is broken. Over the course of the pandemic we’ve seen how ghastly it is to offer health care as a for-profit industry with all of the same just-in-time inventory and staffing issues that plague the rest of the economy.

And we know insurance companies have worn the devil’s mantle in the industry for decades, creating a boondoggle of opaque billing and protocols.

Now we learn from journalist David Sirota how private equity firms have woven their tentacles into ERs around the country, squeezing budgets as they siphon profits and compromise patient care (surprise!), leave ERs understaffed, and increase physician liability while hiding that risk within layers of paperwork and legalese.

It’s enough to make you swear off going to the doctor at all.

Private equity-owned ER staffing firms have been frequently sued by whistleblowers on their medical staff. Last year, the Washington state doctor Ming Lin sued Blackstone-owned Team Health for removing him from the schedule after he posted on Facebook criticizing the company’s unwillingness to appropriate sufficient funds for face masks and proper infectious disease protocols at the beginning of the pandemic.

And last month, Envision Healthcare, which is owned by the private equity firm KKR & Co and is widely viewed as the staffing company that invented surprise billing, was forced to pay a $26-million jury award to a physician it had terminated for claiming that the company’s understaffing of a busy Kansas ER violated the Emergency Medical Treatment and Labor Act (EMTALA), a 1986 bill that requires hospitals to keep physicians on hand to “stabilize” patients regardless of their ability to pay.

But few of the whistleblower lawsuits have alleged systemic fraudulent overbilling, because most physicians who work for the firms have no idea what is being billed under their licenses.

They have no idea because they are “supervising” a staff of physician assistants and nurse practioners, rather than working those ERs themselves, due to a private equity staffing practice of reducing the hours of higher-paid staff. Sirota explains:

An internal document circulated to client hospitals by the KKR-owned Envision Healthcare advises clients that between a quarter and 35 percent of ER visits could be handled by an employee who earns an average of 66 percent less than a board-certified emergency physician. As a result, bigger ERs now often “single covered,” meaning they only have a single doctor on duty at a time, and smaller ERs are often run by nurse practitioners or physician assistants being supervised remotely by a doctor.

In the article, Sirota refers to a private Facebook group “full of the anxious testimonials of doctors who fear losing their licenses over something in the daily mountain of paperwork on which they are required to sign off related to the endless string of patients treated by a nurse or physician assistant under their titular (and often Zoom-based) supervision.”

This intermediation on the part of firms that deal in junk bonds and hostile takeovers adds a layer of indifference and cruelty to the health care story that would be infuriating and dispiriting were it not so unsurprising. We’ve been watching it happen for so many years it’s become background noise: we’re all profit centers for someone, and for some of those someones, that is pretty much all we are.

It’s nothing personal.

It’s just business.

What a great system!

But never mind all that. The leaves are finally turning and we built a fire in the firepit at my friend’s house the other night and played music as the sun went down and the moon came up. I drove home afterward with campfire-scented hair and a head full of harmonies, put another blanket on the bed, did not set an alarm.

I hope you’ve enjoyed something equally satisfying this week.

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