Flashback: NYT Profiles “The Company Behind Many Surprise Emergency Room Bills”

Jul 22, 2019 | Blog Post, Private Equity

The growing presence of private equity-backed provider and specialty medical groups is becoming an all too common influence in the health system – and one of the leading drivers behind egregious surprise medical bills that bankrupt families across the country.

EmCare, a subsidiary of Envision Healthcare which was taken over by KKR for $10 billion in 2018, has an established track record for balance billing patients after visits to the emergency room. Check out the highlights from the New York Times’s story included below:

  • “Early last year, executives at a small hospital an hour north of Spokane, Wash., started using a company called EmCare to staff and run their emergency room…Before EmCare, about 6 percent of patient visits in the hospital’s emergency room were billed for the most complex, expensive level of care. After EmCare arrived, nearly 28 percent got the highest-level billing code.”
  • “Although the hospital had negotiated rates for its fees with many major health insurers, the EmCare physicians were not part of those networks and were sending high bills directly to the patients. For a patient needing care with the highest-level billing code, the hospital’s previous physicians had been charging $467; EmCare’s charged $1,649.”
  • “The new data suggests that EmCare, part of publicly traded Envision Healthcare, did not sign contracts with the insurance company and was able to charge higher prices.”
  • “…the new Yale research, released by the National Bureau of Economic Research, found those bills aren’t randomly sprinkled throughout the nation’s hospitals. They come mostly from a select group of E.R. doctors at particular hospitals. At about 15 percent of the hospitals, out-of-network rates were over 80 percent, the study found. Many of the emergency rooms in that fraction of hospitals were run by EmCare.”
  • “As in so many other parts of the modern economy, turning operations over to large outside contractors has been a big part of the transition. Nearly a quarter of all emergency room doctors now work for a national staffing firm…”
  • “Fiona Scott Morton, a professor at the Yale School of Management and a co-author of the paper, described the strategy as a ‘kind of ambushing of patients.’ A patient who goes to the emergency room can look for a hospital that takes her insurance, but she almost never gets to choose the doctor who treats her.”

To view the full article, click here.