Private Equity’s Strong Grip on Healthcare

In my first article about surprise medical billing, I highlighted the value of the new Texas law that would eliminate surprise medical billing for health plans regulated at the state level. Featured in my second article in this series are health plans that are self-funded through an employer. These type of health plans are also federally regulated. In addition to this, the article also revealed that there is a gap between state and federally regulated health plans. The new Texas state law does not cover federally regulated health plans.

There have been bipartisan attempts to pass the elimination of surprise medical billing at the federal level with limited success. This article uncovers the powerful influence Private Equity companies has over the healthcare system.

To better understand how Private Equity companies influence the healthcare system it’s helpful to learn about their strategy. There are Private Equity backed companies that own physician practices and staff emergency rooms around the country. Private Equity based physician practices funnel millions of dollars into special interest groups.

For example, there is a special interest group called Doctor Patient Unity that is funded by two Private Equity companies (TeamHealth and Envision Healthcare) that opposes health insurance proposals for government setting rates. In short, this is the process of the health insurance company entering into a contract with providers in regards to their rates for incoming patients. Under this type of agreement the providers are in-network.

The Private Equity companies don’t benefit financially from in-network provider and health insurance company rate contracts. However, these companies do benefit when patients seek out-of-network emergency medical care or out-of-network specialists.

Thousands of doctors and specialists are employed by Private Equity companies. These healthcare providers are out-of-network. In this case, there isn’t the protection of a contract between the provider and the health insurance company, nor is there protection for federally regulated plans. When there is a discrepancy in the amount that the insurance company pays to the provider the patient is usually burdened with paying the balance of the bill. This consequence is highly disturbing to patients especially, when some providers charge 100% or more over the amount that Medicare would pay for the same services.

Lessons learned:

  • When selecting your healthcare plan check with your health insurance company about emergency facilities that are in-network.
  • Are you planning for a medical procedure this year? Will a specialist be needed for this procedure?
  • Confirm with your health insurance company that your doctor and hospital are in-network.
  • When specialists are necessary for the procedure, find out their names and their National Provider Identification number (NPI). Then call your health insurance with the doctor’s name and NPI number to confirm if your specialist is in-network.
  • If your specialist is out-of-network contact your health insurance company for a specialist that’s in-network in your area.
  • Write a letter to your House Representative or Senator urging them to pass the elimination of Surprise medical billing into law at the federal level.

It’s clear that in a life or death emergency, consumers can’t shop around for providers that are in-network. In all other scenarios, it’s worth the extra effort to find out from your health insurance company if your providers are in-network. At the end of the day, you can save yourself thousands of dollars and prevent unnecessary stress by taking these extra steps.


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