ERs staffed by private equity firms want to hire fewer doctors

A Case Study of the Use of Nurse Practitioners in a Family Practice: An Empirical Study of Tennova, South Carolina, Using Private Equity Investors

When she was pregnant with her first child, Natasha went to the hospital for treatment of a bleeding body part. She didn’t know much about miscarriage, but this seemed like one.

In the emergency room, she was examined then sent home, she said. She went back when her cramping became excruciating. Then home again. After she saw the doctor, she realized it had taken three trips to the ER in a row, generating three separate bills.

The privacy of the patient was why the hospital declined to discuss Valle’s care. But 17 months before her three-day ordeal, Tennova had outsourced its emergency rooms to American Physician Partners, a medical staffing company owned by private equity investors. APP employs fewer doctors in its ERs as one of its cost-saving initiatives to increase earnings, according to a confidential company document obtained by KHN and NPR.

The American Physician Partners said it’s a way to ensure all ERs remain fully staffed and allow doctors, nurse practitioners and physician assistants to provide care to their fullest potential.

A document says that the company is looking at cost saving initiatives and that there is a “shift of staffing” between mid-level practitioners and M.Ds.

Critics say the quest to save money leads to treatment meted out by someone with far less training than a physician, which leaves patients vulnerable to misdiagnos and higher medical bills. And these fears are bolstered by evidence that suggests dropping doctors from ERs may not be good for patients.

In October of this year, the National Bureau of Economic Research published a paper that analyzed 1.1 million visits to the Veterans Health Administration’s 44 ERs.

The study found that ER patients treated by a nurse practitioners were more likely to be readmitted to the hospital for a preventable reason within 30 days despite the small risk of being readmitted.

The findings are not an indictment of nurse practitioners in the ER according to Yiqun Chen, an assistant professor of economics at the University of Illinois-Chicago and co-author of the study. Instead, she said, she hopes the study will guide how to best deploy nurse practitioners: in treatment of simpler cases or in circumstances when no doctor is available.

Chen said that it wasn’t just a question of if we can replace physicians with nurse practitioners. It’s dependent on how we use them. If we just use them as independent providers it doesn’t seem to be a good use.

“Worse patient outcomes haven’t really been shown across the board,” he said. “And I think until that is shown, then they will continue to play an increasing role.”

Private equity and the shift in the ER: A study of a metro area emergency medicine practitioner’s interview with Arthur Smolensky

Over the last decade, private equity funds have invested over a trillion dollars in Health care transactions, according to industry tracker PitchBook.

Dr. Arthur Smolensky, a Tennessee emergency medicine specialist attempting to measure private equity’s intrusion into ERs, said his review of hospital job postings and employment contracts in 14 major metropolitan areas found that 43% of ER patients were seen in ERs staffed by companies with nonphysician owners, nearly all of whom are private equity investors.

These staffing companies have been among the most aggressive in replacing doctors to cut costs, said Dr. Robert McNamara, a founder of the American Academy of Emergency Medicine and chair of emergency medicine at Temple University.

It is a relatively easy equation, McNamara said. The top expense is the board- certified emergency physician. They are going to want to keep the expense low.

The “shift” is nearly invisible to patients because hospitals rarely promote branding from their ER staffing firms and there is little public documentation of private equity investments.

He hopes to publish his full study later this year in 55 metro areas. But this research will merely quantify what many doctors already know: The ER has changed. Demoralized by an increased focus on profit, and wary of a looming surplus of emergency medicine residents because there are fewer jobs to fill, many experienced doctors are leaving the ER on their own, he said.

Most of the people that we supervise in medicine are not as well trained as we are. We want to take care of patients.

Why Do Nurse Practitioners at ERs Work? The Case of Joshua Allen, the Kentucky Emergency Room Nurse, and the American Physician Partners Preferred Staffing Strategy

Joshua Allen, a nurse practitioner at a small Kentucky hospital, snaked a rubber hose through a rack of pork ribs to practice inserting a chest tube to fix a collapsed lung.

The ER where Allen worked had been restructured, with shifts reduced from two to one. Once Allen had placed 10 tubes under a doctor’s supervision, he would be allowed to do it on his own.

“I guess we’re the first guinea pigs for our ER,” he said. “If we do have a major trauma and multiple victims come in, there’s only one doctor there. … We need to be prepared.”

They have master’s degrees and get a lot of specialized school, but they don’t get as much training as doctors. Many are permitted to diagnose patients and prescribe medication with little or no supervision from a doctor, although limitations vary by state.

There is no mystery about why. Emergency Medicine doctors are paid about $310,000 a year on average, while nurse practitioners and physician assistants make less. Generally, hospitals can bill for care by a midlevel practitioner at 85% the rate of a doctor while paying them less than half as much.

For example, Envision once encouraged ERs to employ “the least expensive resource” and treat up to 35% of patients with midlevel practitioners, according to a 2017 PowerPoint presentation posted by the company online. The presentation was taken down from the site after drawing ridicule on social media.

Envision declined a request for a phone interview. According to Aliese Polk, the company doesn’t tell physician leaders how to care for patients but rather suggests a concept guide that does not represent current views.

American Physician Partners touted roughly the same staffing strategy in 2021 in response to the No Surprises Act, which threatened the company’s profits by outlawing surprise medical bills. In its confidential pitch to lenders, the company estimated it could cut almost $6 million by shifting more staffing from physicians to midlevel practitioners.