What Wall Street Doesn’t Want You to Know About Hospital Emergency Rooms

Yves here. We’ve written regularly on Eileen Appelbaum and Rosemary Batt’s important investigations into how private equity has taken over more and more of hospital staffing, including of emergency rooms. This in turn has allowed them to override patient efforts to have only in-network doctors assigned to their case, as well as to engage in other practices that greatly inflate patient charges (so-called surprise billing).

The legal fig leaf that allows private equity firms like Blackstone and KKR to play doctor is that their deals are structured so that  MD or group of MDs is the nominal owner of the specialty practice, even though the business is stripped of its assets and the operating contracts are widely believed to strip them of any say. The now-notorious incident of Blackstone’s TeamHealth firing whistleblower Dr. Ming Lin confirms who is really in charge.

By Eileen Appelbaum, the Co-Director of the Center for Economic and Policy Research and visiting professor, School of Management, University of Leicester, UK and Rosemary Batt, the Alice Hanson Cook Professor of Women and Work, Cornell University ILR School. Produced by Economy for All, a project of the Independent Media Institute

Doctor Ming Lin is the first emergency room doctor to be fired for going public with his concerns about poor hospital emergency room safety practices and shortages of medical supplies and protective gear for health workers. He won’t be the last.

Like many hospitals in the US, PeaceHealth St. Joseph Medical Center in Bellingham Washington, where Ming Lin worked for the past 17 years as an emergency room doctor, has outsourced the management and staffing of its emergency rooms. So, Lin works on-site at the hospital’s emergency room, but he is employed by a physician staffing firm that runs the emergency room. These staffing firms are often behind the surprise medical bills for emergency room services that patients receive after their insurance company has paid the hospital and doctors, but not the excessive out-of-network charges billed by these outside staffing firms.

About a third of hospital emergency rooms are staffed by doctors on the payrolls of two physician staffing companies—TeamHealth and Envision Health—owned by Wall Street investment firms. Envision Healthcare employs 69,000 healthcare workers nationwide while TeamHealth employs 20,000. Private equity firm Blackstone Group owns TeamHealth, Kravis Kohlberg Roberts (KKR) owns Envision.

Care of the sick is not the mission of these companies; their mission is to make outsized profits for the private equity firms and its investors. Overcharging patients and insurance companies for providing urgent and desperately needed emergency medical care is bad enough. But it is unconscionable to muzzle doctors who speak out to advocate for the health of their patients and co-workers during the global pandemic that is rapidly spreading across the US.

Yet, that is what Blackstone-owned TeamHealth just did. Why would an experienced emergency room doctor be fired in the middle of a pandemic? One clue may be that Blackstone’s CEO, Stephen A. Schwarzman, is part of President Trump’s inner circle. He may not want to risk that relationship by allowing TeamHealth’s doctors to inform the public about Washington’s mishandling of the allocation of supplies and protective gear. The President might conclude that TeamHealth doctors didn’t appreciate him enough, and where would that leave Schwartzman?

PeaceHealth St. Joseph Medical Center may have the distinction of being the first hospital to have a doctor outsourced from a physician staffing firm unceremoniously fired for telling the public the truth. But it won’t be the last. Hospitals are now telling doctors treating coronavirus patients they will be fired if they speak to the press.

The American Academy of Emergency Medicine protested Dr. Lin’s ouster and questioned how TeamHealth is allowed to provide hospital services when the law requires that physician practices must be owned by a licensed medical practitioner. TeamHealth skirts the law by owning all the assets of the physician practices it acquires—the real estate, offices, equipment, supplies, inventory, and even accounts receivable.

On paper, the physician practices are owned by a doctor-led organization that TeamHealth has set up to comply with the law. But what does it mean to own a physician practice if the practice has no assets and no possibility to exist on its own?

The furor over patients hit by surprise medical bills revealed that TeamHealth controls the billing for the doctors it supplies to hospital emergency rooms. The firing of Doctor Ming Lin pulls back the curtain and reveals that TeamHealth controls the doctors as well.

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87 comments

    1. Furiouscalves

      So anyone who works for TeamHealth or Envision needs to stay home until the virus subsides…Or until PE is out of ER. Right now is the time to be going after them hard. If they come out the other side of this with no changes to PE control of ER, it will be a missed opportunity to bring them to heel.

      Reply
      1. dan

        Thats called group organizing. Our present gov. won’t allow it. Or will they… they don’t seem to have much control over virus spreads.

        Reply
    2. Mel

      Way back when, an American banker named Paul Erdman tried to start an American bank in Switzerland, and wound up taken down, tried, and convicted under by a charge in Swiss law called (IIRC, this whole comment is IIRC basically) untreu Gesellshaftshandlung. He went on afterwards to write popular novels about what — meanies — Swiss bankers are. The one I read is really pretty good.
      Anyway, although it would be really heavy lifting creating an American law against untreu Gesellshaftshandlung in the face of the modern American concept of business, a law like that could have excellent effects. It could penalize people who destroy the businesses they are pretending to manage. Think how wonderful that would be.

      Reply
  1. divadab

    In what ethical system is profiteering on the sick and injured who are having a health emergency morally correct? What kind of people are these Blackstone owners? The kind of people who rob the dead and wounded on a battlefield, apparently. Ghouls. Morally depraved scum.

    That Peace Health, which is owned by the Catholic Church, has contracted with these looters, is indicative of how low the Church has fallen in its mission in the world. They kicked out the nuns from any oversight of the hospital and brought in these Blackstone demons. Is it any wonder the moral authority of the Church is a thin thread when rather than supporting their flock they prey upon them? When did the Church start subcontracting to Satan?

    Reply
    1. ambrit

      Oh for a reset. In olden times, often the victorious officers would mandate shoot on sight for looters caught on a battlefield.

      Reply
      1. hemeantwell

        ambrit’s suggested reset brought to mind another frame, the role of the tribunes in early Roman society. I’ve enthused about them before here, re their ability to block measures deemed harmful to the people, and the oath sworn to protect them, whereby anyone laying a hand on them would be hung by the rightfully enraged citizenry.

        What we’re seeing going on now between the administration and some of the governors is a loose fit. They are speaking out against the administration’s deadly neglect and acting against it, while, hopefully, having a degree of immunity against reprisal. We’ll see about a hanging, electoral or otherwise.

        Reply
      2. Billy

        Substitute “corporate board of directors“,
        and or possibly, depending on the crime,
        upper level management
        for “looters.”

        Reply
    2. allan

      “What kind of people are these Blackstone owners?”

      Steve Schwartzman is on the list of billionaires who supposedly urged Trump to reopen as soon as possible.
      Given Blackstone’s medical investments, that is quality talking-your-book.

      Reply
    3. NotTimothyGeithner

      Start?

      For the modern era, I would say john Paul II. He largely had free reign to control the bishop selection process (which for a long time was tied to local governance) and stamped out any opportunity for good or not heinous bishops to serve as counter examples or exist as threats to leadership.

      Reply
    4. tonycat

      Blackstone was a firm that was behind the stealing of houses from American homeowners in the foreclosure fraud heyday since 2008’s financial crisis, I believe. I think they were owners of document-forging firms.

      Reply
      1. Ian

        tonycat,
        I didn’t think Blackstone had anything to do with document forgery, that was primarily the realm of LPS, ( lender processing services), who changed their name to Black Knight Services. Owned by Fidelity National , yes, the title insurance company.
        Blackstone bought tens of thousands of foreclosed homes, the ones with irretrievably corrupted chains of title, formed a subsidiary to do so, and rented them all out.
        If you could let me know who you have reason to believe Blackstone owned as far as document processors , or forgers, pls respond to me thanks-

        Reply
      1. Billy

        Before the information is taken down, search for and file save
        the board of directors. Save as a file on your hard drive. Guarantee that these same people will pop up like moles in future disasters and national looting.
        https://www.blackstone.com/the-firm/our-people

        Never (let them) forget.

        That Peace Health, which is owned by the Catholic Church, has contracted with these looters, is indicative of how low the Church has fallen in its mission in the world. They kicked out the nuns from any oversight of the hospital and brought in these Blackstone demons.”
        How does the Catholic church contracting with them still allow their tax exempt status?
        Care to comment?
        PeaceHealth System Services
        1115 SE 164th Avenue
        Vancouver, WA 98683
        360-729-1000

        Reply
    5. Knot Galt

      In what ethical system is profiteering on the sick and injured who are having a health emergency morally correct?

      Isn’t the answer obvious? It’s called ObamaCare.

      Am I wrong?

      Reply
    6. Procopius

      When did the Church start subcontracting to Satan?

      I believe it was around 325 A.D., when they made a deal with the Emperor Constantine. It may have been earlier, when the tax collector, Saul of Tarsus, said, “Can’t get new converts? Hold my beer.”

      Reply
  2. jackiebass

    Where I live our local hospital emergency room is staffed by doctors and nurses that aren’t hospital employees. They are employed by a private group. This has been the case for at least a decade. There are signs telling people that they will get separate bills from the doctors. My wife and I both are on traditional medicare and a supplemental policy. Fortunately this group is part of my supplemental network. Also the hospital sold its dialyses unit to a private company. They used to do their own laundry now it is done by a private company. The same is true for the janitor services. The head of the hospital used to be a doctor. Now the head is an MBA. This hospital is considered a nonprofit hospital. Since all of these changes has been happening I have noticed that care has become just another business transaction. Tho corporations own everything , even doctors who are now employees. If you need to see a doctor immediately you now have to go to one of two walk in clinics. Health care in my area has become just another money making business. This is a county in upstate NY with a population of about 100,000 people. There are only 2 corporations providing all of the care. Both operate with the same business plan. My doctor of 13 years decided to move out of the area. Instead of the health care organization hiring a replacement his patients were left out in the cold to find a new doctor. My wife has had 5 primary care doctors in the last 2 years. Health care has become just another money making business with no real competition.

    Reply
    1. Susan the other

      There are lots of dimensions to the outsourcing going on in American hospitals. My experience last summer is instructive. My husband (on Medicare) got sepsis from a carpet tack, he’s diabetic so it was very dangerous and I took him to the ER on instructions from his podiatrist. The ER hemmed and hawed, tried to confirm with the podiatrist who just happened to turn off his beeper so the ER called Bill’r regular doctor. His regular doctor was playing the system like a violin: because he gets bonuses for any cost saving measures he achieves. This was one – so instead of getting Bill on an emergency IV, his doctor sent him home with some crappy antibiotics, which he threw up; we lost a good 24 hours which could have been the diff between life and death. I was furious and I called all the people I knew on the board of the new hospital to complain. We returned to the ER the next morning and I was already a cat-5 tornado. They got Bill on an IV and they literally hid from me. After 10 days he was cured but his nitwit doctor (to cover his own ass) recommended some expensive anerobic antibiotics for another 7 days – by mouth. The gave me a prescription to get filled. No pharmacy in town had the stuff – it was special order only and took up to 3 days. Long-short when I finally got my hands on the pills, I called the hospital complaint line and told them how inept they were to let a patient go from the hospital with an un-fillable prescription – and she told me that that was not hospital policy, that hospital policy was to send such a patient home with a 3 day supply for the interim. So I only wish I had had the phone number of the person paying Bill’s doctor his bonus for endangering his recovery in such a callous and insouciant manner. I tried to get through to Medicare to complain about him but I was blocked every time. It’s a shame because that’s first class malpractice in my opinion – and the system that encourages it is unconscionable. All those cost cuts by the system are death by a thousand cuts for patients – and an equivalent amount of profits in the pockets of the corporation.

      Reply
  3. cnchal

    >. . . But what does it mean to own a physician practice if the practice has no assets and no possibility to exist on its own?

    Public sector pension funds are investors in Pirate Equity, in case anyone has forgotten, so you could ask them or at the Trump’s press conference today, ask him. He would know.

    Reply
    1. JTMcPhee

      Pensioners don’t have much, if any, say in how the people who run the pension funds do what they do. The long look we have had at CalPERS gives some idea of the corruption and malfeasance that’s going on, protecting the “fees” and extractions of the “advisers” who in turn get their spiffs from the “market.”

      Not sure what your point is. The structuring of the “deal” obviously seems to be to maximize all looting possibilities and to shed any possible “legal” avenues of either control or redress by any of the institutions of governance.

      Reply
    2. Bryan

      Luring the public sector pension funds into private equity was the historical turning point. Private equity has now lashed itself to the ship of state, its main goal.

      Reply
    1. Tom Doak

      Instead of calling them private equity “firms” and “executives “, we should start consistently labeling them in the same way The New York Times labels the dictators we don’t like with unflattering terms.

      Since they have a long and questionable history in medicine, I nominate the term “private equity leeches”.

      Reply
      1. Billy

        Tom, Don’t be such a easy going pushover, how about

        “Health Criminals”
        =
        “War Criminals”

        They should be identified, shamed and or prosecuted the same way authentic Nazis and Human Rights violators were, and are, in the U.S.

        Reply
    1. JBird4049

      “The list included: if you wear it, everybody will want to wear PPE and we don’t have it,”

      In her termination phone call, Buckalew asked to see the policy saying she couldn’t wear a mask.

      “I need to have it in writing that you are asking me to leave because I want to protect myself,” Buckalew said.

      Still, she said nobody has been able to show her that policy. She was informed though that she was officially labeled as insubordinate, incompetent, and unethical for her actions.

      I wonder how the hospital would handle mass death? Financially of course seeing as ethics don’t matter.

      Reply
    2. Paul Jurczak

      The most telling sign that we are firmly in the post-truth era is the non-response statement from Encompass Health:
      “We are continuing to tap every resource available to provide personal protective equipment that meets the needs of our patients and staff […bla, bla, bla]”.
      Corporate PR considers not addressing the issue and spewing some unrelated sugar coated BS a normal operating procedure these days. Before you think that corporations are bad people, think about bad people inside the corporations. There are thousands of middle class employees who are writing these kinds of statements on behalf of their paymasters. Humanity has a lot of rot in it.

      Reply
      1. Billy

        Call me “The Listmaster”

        Keep every letter, every email, better yet, email them back and ask for clarification about who authorized, authored, directed the policy. If you phone, record the call. Look up the board of directors, save the webpage, their names.
        This will be useful in the future for potential prosecutions at the judicial and activist level.

        Reply
        1. pricklyone

          Sorry Billy, it IS good advice, but others have suggested similar, like “when signing the authorization for treatment, include a statement…about in-network only…”.
          While logical, in every hospital, doctors office, clinic, etc, in my network, you sign all of these authorizations on a “signature pad” attached to a computer. No addendums or changes can be made by the patient, and the staff are not authorized to alter it either.
          Anything you want as a hard copy, they tell you you can print from the “patient portal”
          on the web…THEIR version, of course, perhaps not the same as the one you signed.
          In the case of any legal actions, their politically connected 18 lawyer team will select their preferred judge, who will promptly throw out all of your careful documentation…
          MBAs and automation/IT run amok.

          Reply
  4. Rod

    With 8b$ in the bank a ‘non-profit” Atrium compensates the top well:

    Atrium Health ‘s top 11 executives made a combined $27.6 million in 2019, the Charlotte-based health system said on Friday. That’s a nearly 15% jump from a combined $24.05 million in 2018. Atrium CEO Gene Woods was at the top of the list with $7.25 million in compensation in 2019.

    Here’s what Atrium Health’s top executives earned in 2019
    http://www.bizjournals.com/charlotte/news/2020/02/07/heres-what-atrium-healths-top-exe…

    Reply
    1. Rod

      Here’s a trick they used to get to that Executive pay which was stopped in 2018–

      The Department of Justice announced a settlement with Atrium Health, formerly known as Carolinas HealthCare System, that prohibits Atrium from using “anticompetitive steering restrictions” in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. The settlement, revealed Thursday, also bans Atrium from seeking contract terms or acting in such a way as to prohibit, prevent, or penalize steering by insurers in the future.

      Reply
  5. jfleni

    SUprise billing is just a pluticrat swindle that will increase by millions when Biden gets in; Bernie was right and every body knows
    it. Consider every advanced country has medicare for all BUT not
    here in plutocrat heaven; Bernie was totally right!!!

    Reply
    1. rd

      Other countries have systems different from Medicare for all, especially some of the European ones. But they are heavily regulated which eliminates all of the efficiencies and improvements you get with a free market….. I assume that is why we have such an inexpensive and effective system compared to the heavily regulated ones.

      Reply
    2. Noel Nospamington

      From a Canadian perspective I don’t understand why the vast majority of Americans don’t support political candidates which promote universal single payer healthcare.

      Maybe healthcare isn’t something most people think about until they have the misfortune of accidents or illnesses.

      If there is one positive outcome from the current pandemic, it might be that many more Americans will be shown how badly broken their health care is, including the per capita death rate compared to other countries.

      However right wing parties are masters of deception, and they are likely working on some dog whistle issues to change the focus away from health care after the pandemic settles down.

      Reply
      1. Jonathan

        Because most have been brainwashed since birth and couldn’t imagine better governance exists elsewhere.

        From a Singaporean perspective, US is such a crappy place in terms of income versus overall cost of living + public safety + government efficiency + convenience that it makes me LOL whenever I hear Americans dissing us as “an authoritarian nanny state”. Well, I say they have the freedom to keep believing whatever that floats their rotten boats.

        Reply
  6. rob

    What is mind boggling is the dysfunction that can be wrought by lawyers.
    It seems to me that the fulcrum under private equity’s; arrogance,greed,uninhibited vile existence leading to the takeover of the public medical infrastructure ; rests on peoples ability to “BS” some excuse to a bunch of lawyers…. and have it “cleaned” up into some legal footing that can be defended. Not because of the merit of the idea…. but because of some standing granted to a “legal framework” of some kind.
    The reality completely divorced from the effort to promote the scheme.
    On all sides.
    Not only the vile, morally repugnant private equity types.
    But the people on the other side of the negotiation, who are enticed to make a quick buck ,by selling out the ship the passengers without a lifeboat, are floating on.
    And all of this dealing is made “right” ,by lawyers….
    Is it because there is some contagion in law school? that divorces people from “right and wrong” Or is it partly, sociopaths finding a setting where they fit right in?
    Whether it is the prosecutors all over the country, “legally” screwing nominally guilty people of all kinds of things, making money for their systems… by taking it from the general public…
    Or the ones who fight to allow every scumbag with a dollar to get non disclosure agreements , so they can “pay off” justice and continue to go about damaging society.
    Or the ones who allow these medical ownership rule “work-arounds” by saying to private equity,” now , we all know that you are looking to plunder a population… but hey…. we can just say… “you’re helping them on to their final journey”… and “it all meets the requirements”…. so sign here…how about a round of golf ,down at the club?…

    Reply
    1. Felix_47

      Great comment. That is the real cancer we are facing in this society. I note Joe Biden is a lawyer, I believe he said he was at the top of his class at Syracuse, and Sanders is not a lawyer. Americans seem to want lawyers as leaders because they know how to make everything look fine and they can keep a straight face saying it.

      Reply
    2. DJ

      Whatever else is going wrong, at the root we are experiencing a crisis of integrity. Such a word, “integrity.” It requires that we say it like it is. “The state of being whole and undivided” the dictionary says. It is not, of course, a state that we, being human, can fully achieve. But it is something that we, as humans, must aspire to achieve. Our huckster society places no value on the simple virtue of telling the truth. It is a loser’s creed, a false refuge of Pollyannas, we are told by the grizzled veterans of economic warfare. In fact, though, it is the lubricant that ensures the smooth functioning of all of society. We are awash in falsehood, victims of Bill Black’s “Gresham’s Dynamic.” We can get back on course by punishing false representation, starting at the highest levels, where the greatest damage is done by those entrusted with the greatest responsibility, who should be punished accordingly. We should do this not out of a sense of retribution against the bad guys (a class which, in fairness, may include many of us), but as a necessary means of survival.

      Reply
      1. David in Santa Cruz

        Former SIGTARP Neil Barofsky was interviewed by Bill Moyers earlier this week. Barofsky expressed his concern that we have developed a culture of casual lying at every level of our society:

        It is different. They lied then. They lied now. That hasn’t changed. But the way those lies are perceived, and how people have their alternate realities, I think that’s very different, and very scary as we go into this next crisis.

        https://billmoyers.com/story/here-we-go-again/

        The human race is entering its extinction event, and there is no longer any such thing as long-term thinking. Personal honor was the first casualty. Many people suddenly feel entitled to “get theirs” at the expense of everyone else.

        I see this sort of casual lying every day now.

        Reply
        1. Billy

          That is a symptom of civic decay, not a cause. Once moral relativism is acceptable in “choices”, then it becomes so in civics, then contracts then the entire society. You reap what others have sowed and you casually accepted.

          Reply
    1. periol

      I’ll take Universal Service and High Quality for $400, Alex

      Answer: Daily Double

      I’ll risk everything.

      Answer: How do we MAGA?

      Reply
  7. Jesper

    Private equity might be leading the decline, however, the decline happens everywhere. In the public sector it might be seen less but it happens due to New Public Management (NPM): https://www.managementstudyguide.com/new-public-management.htm

    As far as I can tell the story is:
    Once an organisation gets large enough (private or public) then it starts to attract management accountants (often MBA degree holders). The management accountant believe they can improve efficiency using the tools that (often) worked in improving efficiency in manufacturing. Process flow-charts and statistical analysis leading to the use of Key Performance Indicators (KPI). Sadly the management accountants are often lacking in knowledge and they are often insecure so they don’t dare to ask questions. Their understanding of statistics is either bad or they simply decide to torture data to get their preferred (or indeed any as they need an) answer.
    The end result is often KPIs which are seldom Key and often not even Indicators of Performance.
    (Their own KPI is billable hours which can and often does affect the quality/usefulness of their work)

    In medicine then it might result in something like providing a doctor with a KPI of number of patients seen during a day. Seems reasonable, right?
    The problem with that KPI is that the patients differ, some visits are short and some take longer. That might lead to a doctor deciding to call in patients who might as easily have been helped over the phone. The doctor needs the quick and easy visits to meet the KPI, the patient might end up with a two hour trip for something that might have been resolved over the phone but the doctor might have no choice but doing this to meet the KPI.
    Or alternatively, if the KPI is about resolving queries over the phone then patients who needs to come to the office are instead refused to come in and instead treated/diagnosed (or as it happens, not) over the phone.

    The drive for efficiency can lead to more waste and worse outcomes, when it comes to management accountants then my opinion is: A little knowledge (and that is all they have, a little) can be a dangerous thing. Their lack of knowledge has caused and is continuing to cause a lot of waste and a lot of problems for many people.

    Reply
    1. Oregoncharles

      What struck me about the story is that the hospital(s) are every bit as guilty as the PE’s. Why would they sign these contracts? There must be some sort of kickbacks for them. Ultimately, it’s nothing but a way to squeeze more blood out of the turnips – and that seems to be exactly the way they think of patients.

      Technical question: are hospitals legally responsible for the quality of care and honesty of billing in their own emergency rooms? Seems to me that question should be settled by a big, expensive lawsuit by cheated patients.

      Reply
      1. Jesper

        My guess is that the hospital first tried outsourcing the canteen and the outsourcing of the canteen might have worked well so they then decided to outsource something else. Why the ER was chosen for the outsourcing might be related to wanting to be able to blame the outsourcer for things that might cause bad publicity. Surprise-billing in the ER might cause bad publicity. By outsourcing the ER the hospital might get more money from the ER and deflect blame for the surprise-billing to the outsourcer.
        And I would not be surprised if another reason for signing those deals might have generated some personal benefits for the people who signed the agreement on behalf of the hospital. Probably not a common occurrence but there is a risk that it could happen.

        Reply
        1. jrkrideau

          I have worked for an industrial catering firm and properly managed by the contracting organization contracting out a peripheral function such as as food services can work well. Contracting out your key business is madness.

          Reply
          1. Billy

            Sodexo-Marriot has replaced many fine in house hospital cafeterias.

            From “just OK, to excellent food” has become corporate, tasteless, expensive, profit wringing slop.

            Boycott any place that tries to foist that off on you in a captive audience situation.

            Reply
      2. pricklyone

        I have been operating under the hypothesis that the escape from legal liability was key to these subcontracting deals.
        I am not an insider and have not direct knowledge of such a mechanism, but JTMcPhee may have some insight, if he thinks about it for a few…

        Reply
        1. JTMcPhee

          There’s probably no way a hospital, as a business entity, can avoid being sued In a malpractice situation. The law on this is murky and fact-driven. Plaintiffs’ attorneys sue all deep pockets where there is a “colorable claim” and assets and insurance behind the defendant. The hospital corps have deep pockets that fund the best lawyers and expert opinion providers that money can buy. They can drown many victims in paper and procedure. So your lawyer can sue the hospital, but will have an uphill battle piercing through to the imposition of liability on the hospital.

          Here’s an article discussing the issue of entity liability in malpractice:

          https://www.plaintiffmagazine.com/recent-issues/item/when-is-a-hospital-liable-for-a-physician-s-malpractice

          Often a case against the hospital turns on whether “vicarious liability” can be established. As you note, the structure discussed is an effort to maximize the distance between the hospital entity and the physician. And of course the PE real-party-in-interest owners of the profitable part of the business are even further removed.

          I’ve got to say, firing Dr. Lin was maybe unwise since it establishes a much closer link between the PE entity as controlling the physician’s practice and thus makes it easier to establish agency, direct employee and vicarious liability by the PE entity. Though of course those snakes are very careful to revise their own trench-warfare defenses against personal liability in constructing their shells and disconnects.

          Reply
  8. Jeff

    Yves, I don’t get it. Why would a hospital not hire these docs in the ER and give up that revenue stream to a private company? If it’s so profitable, why would a hospital just give that money away? I can see why a small rural hospital or single site facility might not have the consistent ER volume to justify multiple ER docs, but larger hospital groups can move er docs around in a geography to cover greater needs.

    Reply
    1. Felix_47

      As a doc the answer is management and cost control. If they have a lot of doctors they get a hefty discount on malpractice premiums which can be in the hundreds of thousands or they self insure with umbrella coverage. ER billing is a huge issue. It requires full time people and a lot of phone calls and follow up and tons of paperwork. Don’t forget the insurance carriers see their job as looking for loopholes to not pay and the doctor groups see their job as bypassing those loopholes. If it is a large group and someone goes on vacation or is sick or can’t make a shift coverage has to be maintained. A large pool of doctors makes that possible. A lot of ER doctors chose the specialty because they did not want to be tied down to an office and a business. They want to do the job and then have time off. For that they are willing to take a substantial cut in pay. Overhead costs could easily be over 50%. Pay for doctors has really not kept up with inflation over the last 30 years….unless they cheat….and the more the payers cut them the more that happens. And consider the risk of seeing children with fevers brought in to ERs by non English speaking people often without insurance at 3 in the morning. One case of meningitis, and a certain small percentage will have it, and you could be wiped out. The lawyers are all over it. Think about the two febrile kids who died with ICE a few months ago as they were brought over the border by the parents. Combining these sorts of high risk cases with our legal system is more than a single doc or small group can handle. For example, I alway saw the problem with the asylum wave to be more the legal risk of holding these folks than anything else. I think there were hefty settlements in those cases and I am sure the doctors did not do much wrong….just bad luck….but their careers might well have been significantly impacted. The only answer is a national health system with significant tort reform in medicine. Doctors should be on government salary just like firemen. There is no reason the payment structure should change between the most important moments of care like 911 and the next part after you go through the swinging doors of the ER. If health care is a government guaranteed right then it should be free of profiteering and should be provided by the government and that goes for the pharma and hospital industry as well. The recent primary suggests that Americans like the health care they have and the way it is done. It is no accident the health insurance stocks bumped up to 30% the day after Super Tuesday.

      Reply
      1. Rod

        thanks for this insight overall.
        You state the bottom line:

        The only answer is a national health system with significant tort reform in medicine.

        Reply
      2. Societal Illusions

        I’m not convinced the “only” answer is the one you provide – national healthcare with significant tort reform.

        that said, it certainly is one answer. i wonder if most any answer could be worse than what we have currently.

        wonder how the super tuesday voting would have changed if done over now?

        Reply
    1. cripes

      lyman alpha blob:

      I commend your healthy lifestyle choices that have kept you from an ER visit over the past 10 years or so and from the out-of-network double billing that is now endemic. Everywhere.

      Reply
  9. vegeholic

    People have developed an exquisitely tuned sensitivity to some swindles, such as when the oil companies collude to increase gasoline prices, with or without justification. They even invented a phrase to describe the practice called “price gouging”, and demand action from their elected representatives. Everyone becomes a raging, full-throated socialist when being squeezed by this particular variety of market leverage. Yet when faced by other, even more egregious looting, such as described in this post, they fall in line like compliant sheep being led to the slaughter. I don’t get it. Maybe someone can explain this.

    Reply
    1. a different chris

      I am not going to claim to be able to explain it, but:

      I *think* it’s the horrible cross-pollination of the complexity issue vs the dire outcome of the wrong choice.

      You can, although most won’t, find a way to save gas. It’s pretty understandable, your vehicle gets X MPG and you drive so many miles. You can adjust the second usually, and also occasionally adjust the first. You have a chance (even if your in negative territory you can buffer that period with a credit card) to somehow buy time while you make the adjustments.

      How the heck do you figure out if you really need to be cut open (your GP choice), who to actually cut you open (references?) and where to have him/her do it (if the surgeon works across hospitals).

      And if the GP is right, the clock is ticking….

      Reply
      1. Oregoncharles

        Medicine is a massive example of market failure, for the reasons your example outlines. So all that stuff about “choice” and “markets” is just self-serving BS.

        Reply
  10. K teh

    The University Hospital Complex system is the most corrupt part of the economy, and as we now see it is the weapon being employed. The curtain comes down.

    Government essentially guarantees private corporate revenue, so those corporations can focus on minimizing costs, which are…labor. The non-profits sow up the trap with legal exemptions, generating profit that is not taxed. The three-headed hydra is the least common denominator of herd behavior, distilling labor.

    That money supply chart is essentially an implosion ripe for explosion. You want to harness that and direct parts of that energy toward some useful function.

    Reply
  11. K teh

    If you gotta go, talk to the overnight secretary and get the best nurse and PA to keep an eye on you.

    The doctors signed their life away when their education began.

    Reply
  12. Dean

    Is there a place on the web where these relationships and transactions are published / researched? State boards of medicine? State Attorney’s General? Or is this another opaque backwater where the details don’t see the light of day?

    Reply
  13. jef

    Private equity is like someone standing between you and the milk at the grocery store where you say “excuse me I need to get a gallon of milk” and he says “Ok, that will be six dollars” and you say “but it says four dollars right there” he says “well I say six dollars is the new price take it or leave it”.

    It’s about time we told these a$$hole$ to get the hell out of the way.

    Reply
  14. JTMcPhee

    A little anecdote from my Army basic training experience that might be a potential scenario as all this goes “healthSouth:”

    Troop barracks used to be these two-story buildings with “Open plan” layout — ten double bunks down each side, a latrine (bathroom facilities with a row of unenclosed toilets and sinks and gang showers.) If you have seen “Full Metal Jacket,” you remember the drill. In any event, forty males on each floor sharing everything including microbes.

    My experience was at Ft. Leonard Wood (“Fort Lost-In-The-Woods, in the state of Misery”,) in the fall and early winter of 1966. Meningitis started in the troop population, so the Commanding General mandated that all the windows were alternately to be kept open 9 inches, top and bottom, to air the place out. This with outside air temps being in the 20s.

    So despite the window-open attempts to limit the spread of this infectious disease in a pretty bad kind of social propinquity situation, one of the guys in in my barracks, a draftee farm kid from Iowa, started having really bad headaches and a stiff neck. He was finally allowed to go to “sick call” at the dispensary, the equivalent of the Emergency Room. He went, they gave him Tylenol, and sent him back to duty. This was repeated for three days.

    On the morning of the fourth day, his squad members found him in convulsions with a raging fever and he was carted off by a GI ambulance. He died that night in the base hospital, from meningitis. We troops were then made to remove his gear and bedding which was burned, and also to “GI” (“deep clean”) the whole barracks with some nasty disinfectant from a 55-gallon drum in GI green.

    A week or so later, the guy’s father showed up with a shotgun. He’d collected his son’s body Earlier, but someone had told him about his son’s failed efforts to get treatment. He wanted to find the NCOs, officers and the sick bay doctor and staff that were responsible. The MPs showed up in force and hauled him off to the stockade (jail).

    I wonder if there have been episodes like this happening in our current looting-based system? For sure, they are not likely to be reported very widely.

    And the corporate scum have done a pretty good job of insulating themselves from visibility, let alone responsibility and liability. Kind of unfair to shoot the ER doctor or the mope in the billing department that was “just following orders.”

    Reply
  15. rd

    Expect COVID-19 case numbers to spike upwards soon along with deaths attributed to it. Trump rejected re-opening Obamacare and therefore hospitals will rely on Federal CARES dollars for reimbursement of Covid testing and care. So they will have every incentive to test everything but a dog or cat that walks through their door to ensure they will get paid because they will only be assured of being paid by the Feds if it is Covid.

    Reply
    1. ambrit

      They can also test cats and dogs, since, supposedly, they can catch it from humans, and bill it to the Agriculture Department.

      Reply
  16. antidlc

    About a third of hospital emergency rooms are staffed by doctors on the payrolls of two physician staffing companies—TeamHealth and Envision Health—owned by Wall Street investment firms. Envision Healthcare employs 69,000 healthcare workers nationwide while TeamHealth employs 20,000. Private equity firm Blackstone Group owns TeamHealth, Kravis Kohlberg Roberts (KKR) owns Envision.

    Anybody know if these guys have anything to do with Envisionrx?
    https://envisionrx.com/

    Reply
  17. antidlc

    About a third of hospital emergency rooms are staffed by doctors on the payrolls of two physician staffing companies—TeamHealth and Envision Health—owned by Wall Street investment firms. Envision Healthcare employs 69,000 healthcare workers nationwide while TeamHealth employs 20,000. Private equity firm Blackstone Group owns TeamHealth, Kravis Kohlberg Roberts (KKR) owns Envision.

    Same Envision as envisionrx — or is envisionrx owned by something else?
    https://envisionrx.com/

    Reply
  18. Carla

    The whole story here is that for-profit medicine won’t work. And in the U.S. of A., ALL medicine is for-profit, including our beloved (which has always required supplemental insurance, and now with “Advantage” plans is increasingly crapified) Medicare system.

    Capitalism and Caring Cannot Co-Exist.

    Give it up!

    Reply
  19. CanCyn

    As a Canadian, I had to stop reading this article when I got to the paragraph about Dr. Ming Lin working for a staffing company. I. Can’t. Even.
    The entire US healthcare system is complete and utter insanity! I don’t know how anyone can even try to have a rational discussion about it.
    Privatization and for profit craziness is creeping around the edges of Canada’s system and has f’d up our long term care system (certainly in Ontario where I live). It scares the bejeezus out of me to think that anyone in Canada would want to go down the US road and I hope I never live to see the day.
    The head or our provincial, Conservative, gov is quite to the right (fun fact : he is the brother of the crazy Toronto drug using mayor, Rob Ford, whose notoriety some of you may remember from a few years back) …his mother-in-law is apparently in long term care, where Covid is hitting hard here in Canada and Ontario. I am hoping (faint though the hope might be) that this personal experience wakes him up to the complete and utter wrong that is profit in healthcare.

    Reply
    1. jrkrideau

      It’s hard to tell but I almost get the feeling Doug is growing up. I think the Covid-19 pandemic was a real awake call for him.

      Once we are out of the worst of it he probably go back to being an ***hole but I hope a better one.

      BTW, we should be able to get Dr. Ming Lin an expedited visa and provisional licensing in no time.

      Reply
  20. Tom Stone

    I have long been aware that the only way the American Healthcare system could be reformed was if it totally collapsed, which is happening now.
    Lots of unnecessary pain and death.

    As many of you know I have in excess of $300K in medical debt accrued in roughly 18 months, the last trip to the Hospital ran $88K and change for a 32 hour stay.

    If I had any easily ascertainable assets I’d have been sued multiple times already.
    Fortunately every spare penny for the last 5 years has gone to my Daughter Rosetta’s 529 plan, between that and a very nice scholarship she will graduate debt free.
    And yes, that really is her name.
    She’s cool with it and we’re planning to get matching Mohawks when I’m done with Chemo, I’ll likely go with the same cobalt blue I did when I knew Chemo was on the way.
    A man’s gotta do…

    Reply
    1. Jonathan

      All of that medical debt would be $0 if you lived in Singapore and opted in to pay ~USD300 per year in cash premiums for upgraded govt insurance, assuming you are in the 30-40 age bracket Even if you didn’t opted in and without employer insurance, you most likely won’t fork out more than USD 20K cash copay cash after all is said and done.

      Also, you would probably pay only <1% of your total yearly income in income taxes and not be blowing some USD 2-3K in rent every month.

      So frankly I have NO idea how you Americans can tolerate living in that "exceptional" sh!thole called the US.

      Reply
  21. mrtmbrnmn

    In Pagan days human sacrifices were thrown into the fiery pits to appease the Mad Gods & Big Nature. We may want to revisit that in the present terrible circumstances. High on the list of nominees would be the Werewolves of Wall Street & all those Hedge Fund Hooligans.

    Reply
  22. Sound of the Suburbs

    In Europe, doctors are facing difficult life and death decisions they are not prepared for.
    US doctors are fully prepared to make difficult decisions.
    Do you have health insurance?
    If not, get lost.

    That’s what I like to see.
    Markets forces at work.
    If you can’t afford it, you get nothing.

    Reply
  23. Colonel Smithers

    Thank you, Yves.

    Readers based in the UK, who I imagine treasure their NHS, will be delighted to hear that my former colleagues in the lobbyist trade call Keir Starmer Pharma Starmer. He employed Ben Nunn as Political Adviser. Nunn is now the Labour Party’s Director of Communications.

    Nunn was the Associate Director of Incisive Health. That is a major driver of NHS privatisation. It was founded by a Special Adviser to former Tory Health Secretary Andrew Lansley and employed former Labour ministers Alan Milburn and Owen Smith.

    Healthcare privatisation isn’t going away from the UK.

    Reply

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