When healthcare becomes “for profit”
Interesting enough, this article comes from Kansas City, notably the HCA facility known as Overland Park Regional. A veteran army physician spoke out starting in 2012 about the dangers of an understaffed emergency department, and then he was fired for doing so. It is a growing problem as more emergency departments are staffed by for-profit companies. The focus on profits in health care can imperil patients, they say, but when some doctors have questioned the practices, they have been let go. Physicians who remain employed see that speaking out can put their careers on the line. Coercion to keep their mouths shut, lest they lose their job.
The staffing of hospitals and emergency departments in particular are no longer hospital employees. They are managed by staffing agencies, for profit agencies owned by private equity firms such as KKR and TeamHealth, which are owned by Blackrock, one of the worlds largest private equity firms. How this works is the hospitals pay the private equity firm a lump sum to staff their emergency department. The private equity firm hires physicians at a set rate of pay. In order to MAKE money, the equity firm will intentionally under schedule and skeleton schedule that emergency department to make money off that 24 hour time period. Who pays for that? Patients do! If you are supposed to be staffed by 12 physicians, and only 6 are scheduled, the hospital PAID for 12, received 6, and 50% of the work force is not in the department. This nonsense is how people die.
Per the article: Private equity firms have taken over a broad swath of health care entities in recent years. They use large amounts of debt to acquire companies, aiming to increase their profits quickly so they can resell them at gains in a few years. (Short staff them to make money faster). There’s a reason private equity firms have invested in companies staffing hospital emergency departments, said Richard M. Scheffler, a professor of health economics and public policy at the University of California, Berkeley. “The money in the hospital is in the ER,” he said. “It is the biggest net generator and a huge profit center for almost all hospitals.” The problem, he said, is that “ER doctors are being told how to practice medicine” by financial managers.
WHOAAAAA now. Hold up. I love looking at trends. Most things don’t just suddenly flip and change in our world. It is a gradual trend towards the intended outcome. We saw during covid how hospital administrators dictated physician care, told what to do, what to use, how to treat. Turns out, this has been going on for years. It just came to light during covid when the corruption became blatantly obvious. How much money does the hospital administration AND the equity firms make off manipulation of the money generating emergency department?? Covid testing anyone?
“These administrators who make these changes and implement these policies don’t feel the downstream effects of their policy changes,” he said. “They look at the outcome, and the outcome is ‘Hey, we’re making money.’”
The breakdown of what happened to former military physician Dr. Brovont is this. He was hired by EmCare, a staffing agency for physicians. He was assigned to Overland Park Regional hospital in the Emergency Department. At the time, 18 physicians in total staffed the emergency department, and in 2014 that ED expanded in size when they added a separate pediatric ED, and doubled in size to a 343 bed facility. The issue the physician had was not only was he in charge of the ED, but an ED physician had to respond to all code blue pages in the hospital. This meant the ED was left understaffed by physicians when they responded to other parts of the hospital for other code calls. His request to his superior at EmCare was to staff ONE additional physician per shift who would not only see patients in the ED, but also be the designated person to reply to code calls throughout the hospital during that shift. Federal law was being violated here, as a level II trauma center REQUIRED that an ER physician be in the ER at ALL TIMES, and during code calls, there was NO physician in the ER. What happened when he voiced this concern? He was fired 6 weeks later.
Not only was Dr. Brovont fired, but because many other Kansas City metro hospitals use EmCare as their staffing agency, he was barred from working at any EmCare staffed hospital. If he was an actual HOSPITAL employee he would have had the right to tribunal and discussion about his concern, and most likely not have lost his job. He did not commit wrong doing, malpractice, danger to a patient…….he was advocating for SAFE STAFFING TO PROTECT PATIENTS.
Here is where it gets more interesting. Private equity companies who own the staffing agencies dictate the staffing ratios in order to make a profit off the contract with the hospital. The hospital claims no culpability because the staff aren’t hospital staff, they are independent contractors. The staffing companies claim no culpability because the do what the hospital tells them to do. It was him not me. It was them not us. He said she said mentality. Now. Private equity companies are NOT healthcare providers. And 33 states have laws that BAN NON-HEALTHCARE providers from making healthcare decisions, including the state of Kansas where this incident occurred. “Legislators recognized that although physicians swear a duty to put patients’ interests first, when a for-profit entity enters the picture, a push for revenue may take precedence. Laws can also ban fee-splitting arrangements between medical practitioners and nonlicensed individuals and entities.”. This law was to protect patients from corporate health bureaucrats and for profit equity firms. But the laws have not been monitored or upheld very well. Dr. Brovont called them out on it. And won a lawsuit in excess of $25 million dollars because of it.
“Putting the profit motive in between the patient and the physician can lead to untoward consequences in terms of care. The companies “choose how many patients an hour your doctor sees. They can direct some of the testing protocols. They can decide whether you’re seen by a doctor or less skilled provider, a physician assistant.” (Ask any provider about RVU’s and how many RVU’s they are required to have to “earn their keep” each month. This is why you wait 2 hours to see a provider. They have a mandated quota to see per their corporate healthcare teams mandate).
Envision and EMCare said the company “follows an operating structure that is common across the health-care sector and widely used by nonprofit, privately-held and public groups as well as hospitals and insurers. Industry-wide legal challenges to that structure have proved meritless.”
A push for profits can also result in inappropriate and costly admissions to hospitals from emergency departments, which was the basis for a 2017 case against EmCare. After physicians came forward with allegations of Medicare fraud involving EmCare and a hospital chain that had hired it, the Justice Department filed civil suits against both entities. EmCare had admitted Medicare patients unnecessarily to the hospitals whose emergency departments it oversaw, prosecutors said, and received remuneration from the hospital chain for doing so. Medicare pays at least three times more for inpatient admissions than it does for care billed as observation or emergency room visits.”
As of the writing of this article, Dr. Byrne who is the medical affiliate of EmCare is listed as the “practice employer” for 300 medical groups in 20 states. When Dr. Byrne was questioned and asked for comment regarding this article, his reply was “EmCare is a practice management company. We do not manage medical care — that is a physician responsibility.” He declined to comment further.
Corporate healthcare. Ran by private equity companies with no direct patient care experience, and profiting as high as they can from the care patients receive in the ER, and from contracts with hospitals. This makes me question why do hospitals not staff their own emergency departments? Why are you outsourcing that to a private equity company? What kind of profit margins are increased and what patient care is compromised by this?