The saga surrounding balance billing in emergency medicine illustrates the influence of private equity on the specialty. During the legislative fight to pass the federal No Surprises Act of 2020, it was asserted that most balance billing in the U.S. was due to two large physician groups, TeamHealth and Envision. Both groups, with a collective employment of nearly 90,000 physicians, had recently been acquired by private equity firms and are alleged to have instituted the balance billing strategy to enhance profitability.²

In the case of Envision, balance billing was reported to be such a fundamental part of its plan for increased revenue and meeting debt obligations that the passage of the No Surprises Act and subsequent disputes with insurers resulted in multiple downgrades of the quality of its corporate bonds. This was cited as a cause for its eventual bankruptcy.^2,5,18 Envision had been acquired for 9.9 billion dollars in one of the largest leveraged buyouts since the 2008 financial crisis, of which over 7 billion dollars was new debt obligation.18 Two months after Envision’s bankruptcy, PE-owned American Physician Partners (APP) also folded under the weight of its 630 million dollars in debt despite consistently rising revenues.^21,22

TeamHealth Chief Medical Officer and emergency physician Jody Crane, MD argues that blame for any increased cost or perceived impact on quality should be placed on insurance companies, referring to long-running legal battles with private insurers over payments for its services. “The harsh reality is that physician groups, regardless of ownership model, have very little control over reimbursement,” Dr. Crane said. “While scale can improve a physician practice’s ability to negotiate with insurers and hold them accountable for fair payment, at the end of the day healthcare premiums continue to increase year over year and physician reimbursements continue to decline. Insurers leverage laws, like EMTALA or the No Surprises Act, to drive down payments…. This is not about private equity driving up costs, this is about unchecked insurer fraud and abuse.”

Still, this wave of private equity acquisitions in emergency medicine has come crashing down on the heads of many early-career physicians. As of 2022, 1 in 4 emergency departments in the United States were staffed by a private equity-owned physician group.²³ The emphasis on lower-cost labor results in heavy recruitment of recent graduates to place downward pressure on wages. Dr. Stinson said, “There have been [PE] facilities where I worked where a third to a half of the staff are all new residents. Usually, they’ll get two or three every now and then, but if everybody is fresh, who’s teaching who?” While secrecy surrounds the operations of many PE-owned groups, Envision serves as a case study. During the pandemic they “cut pay and benefits for emergency room doctors and other medical workers” while “continuing to spend millions on political ads” to counter the No Surprises Act, according to reporting from ProPublica.^18,24