By Consumers for Quality Care, on September 22, 2023
One of the largest emergency physician staffing companies, American Physician Partners (APP), unexpectedly shut down this summer, negatively effecting medical personnel, staff, and patients, according to The American Prospect.
APP, a private equity–owned operator, controlled nearly 135 emergency departments and “freestanding” hospital-owned emergency departments in 18 states. The company shut down in late July due to financial issues stemming from the failure of a planned merger with another medical company. Now, multiple former employees of APP-owned emergency departments have come forward to share their stories, alleging that APP often cut corners and put profits before patients.
Between 2012 and 2021, private equity firms have financed over 1,000 physician practice buyouts. Since then, several of these private equity-owned physician practices have shut down, cutting staff and services all while growing their investment portfolio, leaving the health care system in disarray.
Private equity companies have also become extremely savvy in using bankruptcy protection to minimize financial losses and to create the illusion they are working to protect their staff.
Bankruptcies can offer some protection and predictability for staff, who are often viewed as valuable assets in the health care delivery system. What makes this case different is the fact that APP has yet to file for bankruptcy. As a result, The American Prospect reports that some APP physicians may not be getting paid for July, or possibly as far back as June. In addition to lost wages, APP physicians have also lost their malpractice insurance, and are now scrambling to regain coverage elsewhere.
While staff and consumers pay the price, APP executives rake in massive profits. One of the company’s three co-founders, a sitting Congressman, listed a loan to the company as one of his assets in his financial disclosures, valued to be between $5 million and $25 million. Meanwhile, a pending lawsuit filed by eight doctors in Houston allege that in a five-year period, they were underpaid by nearly $14 million.
The corporatization of medicine hurts overall health care delivery for consumers, with private equity firms contributing to the collapse of hospital systems around the country. CQC is deeply troubled by the new trend of private equity-owned medical companies, especially given that the business tactics they use can ultimately hurt consumers. CQC urges lawmakers, regulators, and other stakeholders to fix this deeply broken system. Health care providers – and the companies that own them – should always put patients before profits.