When reached for comment, TeamHealth and Envision both said their companies now have a policy against balance billing. “Envision fully supports the patient protections under the No Surprises Act and, before it was passed, had a policy prohibiting balance billing,” the Envision statement said. “Meanwhile, some health insurers improperly deny and underpay claims for care provided to their members. The 2023 ruling by an independent arbitration panel stating UnitedHealthcare owes Envision more than 91 million dollars for underpayment of essential medical care is a clear example of this.” At the same time, there is evidence that declining reimbursements by insurers, including UnitedHealthcare, may also be a strategy driven by private equity investment.²⁵

Wesley Barnett had heard disturbing stories about the firm staffing his hometown critical-access ED as he was nearing the end of residency at the University of Kentucky, so he founded an independent physician group to try to take back the contract. He was shocked when the hospital CEO took him up on it, but a year later, volumes increased 30 percent with his emphasis on quality rather than cost-cutting. He explained what he feels is the trap set for early career physicians this way: “Say you’re paying 200 dollars an hour to a physician to see 2 patients an hour. If that number is now 4 patients an hour, instead of keeping safe staffing models, we’ll give you incentive pay, making 300 dollars an hour. Before they were paying you 100 dollars a chart, now they’re paying you 75 dollars a chart, and you just got had. You’ve taken on the additional liability and more money for more pain.” Because young physicians are often walking into these situations fresh, he says, “They’re just happy they’re making more than in residency.”

Amid high-profile failures of hospitals and physician groups, legislatures are looking to limit private equity investment in health care. In California, a recent bill has been introduced and has sparked a lobbying battle pitting physicians’ and nurses’ associations against PE-funded groups.²⁶ In the United States Senate, Senator Elizabeth Warren (D-MA) has introduced legislation that would make it easier to hold PE firms and health care executives accountable for the negative consequences of leveraged buyouts, including criminal liability for the wrongful deaths of patients.²⁷

Private equity acquisitions tend to target hospitals and physician groups financially struggling to survive and those with a significant proportion of government-insured patients. Dr. Stinson is concerned about the potential to exacerbate disparities. “Most of these private equity firms are in lower-income, under-resourced places already because they come in with a promise to turn the books around. But maybe that was never the intention,” she speculates. “They leave the area deprived of access.” Low Medicaid and Medicare reimbursement, which according to the American Medical Association have “declined greatly between 2001 and 2023 after adjusting for inflation in practice costs,” increase the financial strain on providers of health care including both hospitals and physicians. The AMA found that administrative burden of reimbursement and low rates were the most frequent factors in physicians’ decisions to sell their practices.²⁸