Alteon Health, which provides emergency room (ER) staffing for hospitals, has slashed salaries, retirement benefits, and personal time benefits for its healthcare personnel. The company is in the private equity portfolio of Frazier Healthcare Partners. Other healthcare staffing companies are soon expected to follow suit.
Most ER personnel in the United States don’t work directly for a hospital. They work for private companies that contract with various hospital clients. Hospitals are currently losing money due to the COVID-19 outbreak, as elective services are postponed and patients who don’t have the coronavirus avoid ERs.
Providers on the frontlines of the pandemic face risks due to limitations in personal protection equipment (PPE) and high stress with extended hours. But many providers also worry about potential threats to their families as they may bring the virus home. Physicians have expressed their frustrations with an apparent disconnect between their employers’ administration and the realities faced by those directly serving patients.
Another major ER staffing company, Envision Healthcare Group, is part of KKR’s investment portfolio. KKR also holds the nation’s largest dental service organization (DSO), Heartland Dental. Envision Healthcare has specifically been implicated our nation’s “surprise billing” scandal related to patients being blindsided with bills for previously nondisclosed services.
KKR’s Envision Healthcare debt concerns have only been exacerbated by the COVID-19 crisis. Its junk-grade bonds are now trading at record lows. Physicians’ pay has been held back, as routine medical services are severely curtailed.
Similarly, Moody’s Investor Service downgraded Heartland Dental’s debt vehicles in late March. Its first lien senior secured debt rating dropped from B2 to B3. Unsecured notes were downgraded from Caa2 to Caa3.
“The company’s very high leverage and high cash interest expense relative to its earnings increase the risk that the company could pursue a transaction that Moody’s deems to be a distressed exchange, and hence a default under Moody’s definition,” Moody’s said. Further, Moody’s has placed all of Heartland’s debt vehicles under extended review for additional downgrading.
The other group cited in the “surprise billing” investigation was TeamHealth. Unlike most other ER staffing groups like Envision Healthcare and Alteon Health, TeamHealth announced no anticipated cutbacks in its providers’ incomes or benefits as result of the COVID-19 pandemic.
TeamHealth is in the private equity investment portfolio of the Blackstone Group. The Blackstone Group also holds substantial interest in Biomet, which manufactures medical implant and bone grafting materials, including dental implants under the Zimmer brand.
Dr. Ming Lin, an ER physician and advocate for medical workplace safety, worked for TeamHealth. He was very outspoken about serious inappropriate and inadequate PPE at his facility, PeaceHealth St. Joseph Medical Center in Bellingham, Washington. He had been a 17-year veteran of its ER staff.
Ming openly requested patient and staff testing for COVID-19 at his facility. Seemingly, administration compliance was remiss. He complained of an overly crowded reception room lacking adequate personal distancing. As a result of his whistleblowing, Ming allegedly was fired.
Medical providers operating in our nation’s ERs are generally employed by entities that are very remote from the realities of doctors and patients. These publicly traded firms or private equity companies operate a wide range of business enterprises. Corporate expertise may extend to real estate, accounting, retail sales, distribution chains, payday loans, and manufacturing, but not necessarily healthcare.
Experiences encountered by doctors and nurses in firms that aren’t truly focused on patients but on shareholder profits may have a deleterious impact on patient outcomes. Corporate managers, who are very remote from the doctor/patient relationship (contract), are positioned to directly or indirectly impact the delivery of clinical care. This is all without the knowledge or consent of patients.
What we are currently witnessing in the corporatization of the ER medical community should be a sobering wakeup call for dentistry. Many of the same megacompanies that control medical staffing at ERs also operate DSOs and manufacture dental supplies. In many situations, we are seeing the interests of patients and healthcare professionals held secondarily to the interests of CEOs and shareholders, all in a time of national crisis.
Dr. Davis practices general dentistry in Santa Fe, NM. He assists as an expert witness in dental fraud and malpractice legal cases. He currently chairs the Santa Fe District Dental Society Peer-Review Committee and serves as a state dental association member to its house of delegates. He extensively writes and lectures on related matters. He may be reached at firstname.lastname@example.org or smilesofsantafe.com.