The Corporate Practice of Medicine- the rise and fall of Envision and what it means for practicing docs

July 3, 2024

Contributors: Dr. Kenan Bouzida and Dr. Robert McNamara

In this podcast we review the corporate practice of medicine- a touchy topic in Emergency Medicine. Over the last few decades, we have let these corporate agencies into our work environment, with sometimes disastrous results- termination without cause, overbilling, understaffing, just to name a few. Many of these corporate groups have taken heat of late for their shady dealings, but they are still out there, buying up EM physician groups across the country. In this two part podcast we review the history of the more well-known corporate medicine groups, Envision, and how many docs are taking a stand against their practices. In Part 1 we have Dr. Kenan Bouzida, a medical student at Tufts University reviewing the rise and fall of Envision. In Part 2 Kenan is joined by Dr. Bob McNamara, a man who has dedicated much of his life to fighting the corporate practice of medicine.

Part 1- The Rise and Fall of Envision

Part 2- Physician Advocacy with Dr. Robert McNamara

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What is Envision Healthcare?

Envision Healthcare (originally EMCare), rebranded in 1992, was initially focused as a physician management company on providing outsourced medical services to hospitals, theoretically increasing each hospital’s service capabilities. Their mission was to streamline operations, keeping management responsibilities in the background while physicians could concentrate on patient care. The profitable nature of private ED billing quickly attracted multiple private investors like CD&R, Onex Capital, and KKR, allowing Envision to rapidly expand by consolidating emergency physician, radiology, and anesthesia groups all over the country.

What did they do wrong?

Envision, in attempts to maximize profits and their investors’ returns, set company-wide employee policies dictating performance-based compensation models. Doctors were pressured to work longer hours and handle higher patient volume, in some instances even pushed to upsell services! Envision’s 2016 merger with AmSurg raised the stakes, creating one of the largest healthcare service providers in the United States with a total enterprise value of around $15 billion dollars, and applied the same profit directed practices to surgical, anesthesia, and Obstetric healthcare.

Envision pursued an even more aggressive pricing strategy with insurance payors, demanding exorbitant rates for physician services. This didn’t go over well with most insurance companies, best exemplified by UnitedHealthcare’s decision to expand Optum, it’s own healthcare management company, while denying claims sent by Envision stating their rates for services didn’t match cost of services models. Envision, in a last ditch, morally lacking attempt to recoup losses, adopted balance billing and going out of network, resulting in surprise bills for unsuspecting patients. By 2017, a startling 18% of all emergency room visits had at least one out-of-network charge.

How did Envision fall apart?

The No Surprises Act (https://www.cms.gov/nosurprises) was signed in 2020, aiming to shield patients from surprise medical bills. This shifted the balance of power in negotiations from charging companies like Envision to Payor companies like UnitedHealth Group. Lawsuits, disputes, and a tarnished public image contributed to a downward spiral. In 2020, Envision generated a robust $1 billion, but just two years later, that number plummeted by 75% to $250 million. Ratings agencies downgraded Envision debt to junk levels, and in May 2023, the company filed for Chapter 11 bankruptcy, leaving thousands of physicians and hospitals, let alone millions of patients, without Emergency Department Healthcare services.

What do we do about it:

What happened with Envision Healthcare demonstrates the delicate balance between growth, ethics, and financial strategy in the healthcare industry. It serves as a stark reminder that transparency and ethical practices are paramount; advocating for positive changes becomes not just a choice but a responsibility. Effective methods of advocacy include leaving comments to the FTC on healthcare consolidation/private equity practices (https://www.regulations.gov/docket/FTC-2024-0022) as well as participating in national organizations like AAEM in developing policy and having a greater voice in government to combat the corporatization of healthcare. You can be heard here at Take Medicine Back (https://takemedicineback.org).

Hear from the expert!

I thought it most important to hear from someone with first hand knowledge and understanding of how Envision impacted physicians, patients, and the modern American healthcare system. I was very lucky to have a one-on-one interview with Professor and Chair of Emergency Medicine at Temple University, and the Chief of Medicine of Temple University Physicians, Dr Robert McNamara!