A Senate committee asked three major private equity firms for information on how they manage or staff hospital emergency departments to see whether private equity’s management of a large portion of the nation’s emergency rooms has harmed patients, NBC News exclusively reports.
Led by its chairman, Sen. Gary Peters, D.-Mich., the Homeland Security and Governmental Affairs Committee’s investigation focuses on three of the nation’s largest private equity firms: Apollo Global Management, Blackstone Group and KKR. According to information requests, Peters staff conducted interviews with more than 40 emergency department physicians who expressed “significant concerns” about patient safety and care resulting from the capital companies’ aggressive practices. investment in the field. These practices include improper billing, retaliation and anticompetitive activities, the committee’s letters to companies say.
Recipients of the letters, sent on Monday, were asked to provide documents and information by April 17 and to arrange a meeting with the committee no later than May 3.
NBC News recently estimated that 40 percent of U.S. hospital emergency departments are supervised, staffed or managed by companies owned by private equity firms.
The Homeland Security Committee investigation is the second Senate investigation focused on the impact of private equity on patient care. In December, the Budget Committee launched a bipartisan investigation into two hospital systems associated with private equity firms, seeking to assess how much profit they generated in their deals and whether those deals harmed patients and clinicians . Sen. Sheldon Whitehouse, D.-RI, who chairs the committee, and Chuck Grassley of Iowa, the ranking Republican, are leading the review.
The new letters from the Homeland Security Committee requesting information on emergency services operations were also addressed to four companies backed by private equity firms. Three are hospital staffing companies: US Acute Care Solutions, funded by Apollo; Envision Healthcare, formerly owned by KKR; and TeamHealth, a Blackstone company. The other beneficiary is Apollo-owned LifePoint Health, which operates 62 acute care hospitals in 16 states and runs the largest chain of rural hospitals in the United States. Apollo and LifePoint Health are also under investigation by the Senate Budget Committee.
In recent years, private equity firms have invested $1 trillion and become significant players in many sectors of the healthcare industry, including hospitals, nursing homes, doctor’s offices, nursing homes, mental health and emergency services staffing companies. To finance their healthcare acquisitions, private equity fund owners typically add debt to the companies they buy, then cut company costs to increase profits and attract new buyers in a few years.
These cost-cutting practices are at the heart of the new Senate investigation, Peters said in a statement. “I am concerned that our nation’s largest emergency medical staffing companies are engaging in cost-cutting measures at the expense of patient safety and care, which could endanger emergency preparedness. emergency situations in our country,” Peters’ statement said. “I urge these companies and their shareholders to be transparent so that we can better understand how their business practices could affect patient safety, the quality of care and the ability of physicians to exercise independent judgment in the delivery of care to patients.
In a statement, an Apollo spokesperson said: “We continue to welcome all discussions with Senators regarding the investment history of our funds in health care. An Envision spokesperson said: “Envision intends to work transparently with Senator Peters on his request. Our clinicians care for patients and communities when they need it most. Our number one priority is always the well-being of our clinicians and the patients they serve. A Lifepoint spokesperson said the company “looks forward to responding to Chairman Peters’ request received today and continuing any conversations with senators interested in our operations and their commitment to our communities.”
KKR and Blackstone declined to comment.
With the recent rise in interest rates, the costs associated with indebtedness for some of these companies have become onerous, creating financial difficulties. Last year, for example, Envision Healthcare, the staffing company formerly owned by KKR, filed for bankruptcy. It continued to operate despite its bankruptcy and emerged from it after restructuring. Another emergency department staffing company collapsed last year — American Physician Partners — leaving the hospitals it served scrambling to find replacement staff.
Academic studies show that private equity firm involvement in health care is associated with significant cost increases for patients and payers, such as Medicare. Lower quality of care has also been associated with corporate investments in health care, including 10% higher mortality rates in privately owned nursing homes. A study last year showed that patients in private hospitals fell more often and contracted more infections.
A TeamHealth spokesperson said the company is reviewing Peters’ letter. “The top priority of TeamHealth and our clinicians is always to provide safe, high-quality patient care,” he added in a statement. “We look forward to engaging with the Committee and demonstrating our uncompromising commitment to our clinicians and communities.” »
Private equity firms’ health care deals also face scrutiny from the Federal Trade Commission, which oversees corporate mergers for potentially anticompetitive activities. Last fall, the FTC sued US Anesthesia Partners Inc., one of the nation’s leading anesthesia staffing firms, and its private equity backer, Welsh, Carson, Anderson & Stowe, charging entities for conspiring for more than a decade to acquire anesthesia practices in Texas monopolize the market, drive up prices for patients and generate profits. Both companies are fighting the lawsuit, saying it is “misguided” and “meritless.”
Mitchell Li is one of the emergency doctors interviewed by Homeland Security Committee investigators. Founder of Take Medicine Back, an organization that works to remove the medical profession from corporate control, Li said in an interview: “The emergency department is the canary in the coal mine for the entire health care system American. We are the first to see the breaking point and we are beyond that point. Private equity and the practice of corporate medicine endanger our countries’ ability to respond to disasters.
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