Thread by @doctorow

The most remarkable thing about the #SurpriseBilling crisis is how its architects thought they'd get away with it. In 2018, @KKR_Co (slogan: "Integrity. Trust. Partnership") bought @EnvisionHealth with a plan to make billions with Emergency Room fraud.

pluralistic.net/2020/04/04/a-m… 1/

Here's how surprise billing works: a company like Envision convinces a hospital to let its emergency room doctors form a private company that doesn't take any insurance (especially not the insurance the hospital accepts). 2/

When gravely injured, seriously ill, unconscious and dying people present at the ER, they are tricked into signing paperwork saying they'll pay whatever Envision charges. 3/

Now, the AMA bans non-doctors from owning medical practices, so nominally all of these private "doctors' groups" are run by ER doctors. 4/

The true owners, though, are private equity looters - you can tell, because whenever one of these "doctor-owners" objects to an inhumane practice, they're summarily fired:

pluralistic.net/2020/05/21/pro… 5/

KKR's buyout of Envision followed the private equity playbook: buy a business, load it up with debt, pay the "investors" giant bonuses and management fees, cut wages and service, and raise prices. 6/

This left Envision with billions in debts, which it would have to make up by gouging dying people and impoverishing medical personnel. 7/

And that's the amazing part: that KKR really believed that it could destroy the entire national emergency healthcare capacity of the United States of America without running into any kind of public policy response. 8/

I mean, I understand how they came to that conclusion. America is, after all, a country willing to give billions in bailouts to private equity firms that had mismanaged emergency rooms into the ground:

pluralistic.net/2020/04/11/soc… 9/

But over time, the stories of *fully insured* sick and injured people who are financially ruined after going to an ER at a hospital that was *covered by their insurance* became harder and harder to ignore. 10/

Private equity even figured out how to gouge people who *weren't* having medical emergencies or using their booby-trapped ERs. Take Caitlin Wells Salerno, who went into labor and went to the Poudre Valley Hospital in Ft Collins, CO. 11/

The hospital had locked all its doors except for the ER, meaning she had to pass through the ER to get to the maternity ward. The ER insisted on doing her intake, and "upcoded" her as a "Level 5 emergency" and stuck her with a $2,755 bill.

pluralistic.net/2021/10/27/cro… 12/

Stein's Law predicts that "If something cannot go on forever, it will stop." Even by American standards, the idea that fully insured people can be financially ruined by surprise billing was a bridge too far. 13/

Anti-surprise-billing legislation was introduced in Congress. 14/

The surprise billing companies (who'd slashed doctors' pay, claiming they were too broke to maintain a living wage) found millions to spend on astroturf campaigns insisting that surprise billing was *good* for patients:

pluralistic.net/2020/04/21/all… 15/

(Even more amazing: surprise billing companies were able to scrape together vast fortunes for these campaigns *after* blowing billions on stock buybacks). 16/

The campaign to establish surprise billing as a permanent fixture in American health-care was viciously fought:

pluralistic.net/2020/02/21/plu… 17/

Top Democrats like @RepRichardNeal emerged as easily bought cheerleaders for surprise billing, bravely sticking up for the right of private equity to destroy the lives of sick people:

pluralistic.net/2020/07/13/you… 18/

Despite all this, the No Surprises Act passed in December 2020 and the Biden administration ordered an end to surprise billing in July 2021:

pluralistic.net/2021/07/02/spo… 19/

The Biden order was a far cry from perfect. It included an arbitration clause that denied patients and their insurers a day in court, though it did require arbitrators to start negotiations from the median in-network rates for disputed procedures. 20/

Last month, a federal judge in Texas struck down this provision, allowing private equity-backed emergency rooms to insist that their hugely inflated prices were a fair starting point:

healthcaredive.com/news/texas-jud… 21/

Despite this, the surprise billing industry is on the skids. As @EileenAppelbaum and Rosemary Batt write for @TheProspect, Envision Health is circling the drain.

prospect.org/health/envisio… 22/

Its $5.3b first-lien term loan is now "in distressed-debt territory" at $0.73 on the dollar, and its unsecured debt is trading at $0.53/dollar. The company narrowly avoided bankruptcy thanks to a $100m CARES Act bailout, but it is in serious trouble. 23/

That's long-run good news, because Envision is a fucking abomination, a predator that gorges on the sick and injured. 24/

But as Appelbaum and Batt write, in the short term, it's even more bad news. Envision's debt deals allow it to transfer $2-2.5b in assets to an unrestricted subsidiary. 25/

This is the same structure that allowed PE-backed demolitions like Sears, J Crew and Nine West to create a "bad" company that held all the debts and a "good" company that held all the assets. 26/

If that's the plan - and it looks like it, based on Envision's talks with looters like Apollo Global Management - then the company's next move is to slash its ERs even further, starving them of supplies and staff, and starving its medical personnel with rock-bottom wages. 27/

This will make the care in those ERs even worse. It's life-threateningly terrible now, thanks to the punishing metrics that Envision illegally forces on its doctors:

nbcnews.com/health/health-… 28/

We already know what this looks like. When @OneCarlyle bought and destroyed @nurserehabjobs, it pocketed billions, laid off hundreds of nursing home employees, and turned its nursing homes into fatal nightmares:

washingtonpost.com/business/econo… 29/

That's the trajectory of the ERs under Envision's (mis)management. It's going to get worse before it gets better. 30/

Image:
Michael Pregel (modified)
commons.wikimedia.org/wiki/File:A_we…

(The Wellcome Trust incorrectly claims a CC BY 4.0 license on this public domain image: creativecommons.org/licenses/by/4.…) 31/

ETA - If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2022/03/14/unh…