EMERGENCY ROOMS: Private staffing companies focus of government inquiry

Apr. 14—TRAVERSE CITY — Michigan's U.S. Sen. Gary Peters, chairman of the senate's Homeland and Governmental Affairs Committee, is seeking documents from four private companies that provide staffing to U.S. hospital emergency departments, after dozens of physicians expressed alarm over patient safety.

"I am concerned by the risks these physicians have raised and their potential impact on patients and families as well as the homeland security implications," Peters said in an April 1 letter.

Peters told leaders of companies which staff a combined 1,340 emergency departments, including several in Michigan, financial instability of private staffing companies could impact the nation's ability to respond to terrorist acts or a future pandemic.

"I am concerned by the risks these physicians have raised and their potential impact on patients and families as well as the homeland security implications," Peters said, "such as the ability of emergency departments to respond to a mass casualty event, terrorist attack, pandemic, or other emergency that would require treating high volumes of patients."

Between September 2023 and March 2024, Homeland Security Committee staff interviewed more than 40 unnamed emergency medicine physicians, some from Michigan, working in hospitals across the U.S., records show.

"Many physicians also told the Committee they could not voluntarily discuss their patient safety and staffing concerns out of fear for their livelihoods," Peters said, in the letter.

Several physicians working in Michigan, some under contract with hospital emergency departments and some practicing in other specialties, previously shared similar concerns with the Record-Eagle, declining to speak on the record, citing their fears of retaliation.

"The goals of investors to make profits and the goals of physicians to care for our patients do not align and I could lose my job just for saying that," a physician with admitting privileges at a Michigan hospital told the Record-Eagle in November.

Leaders of state medical organizations here raised the alarm months ago.

In October, Michigan State Medical Society leaders contacted state Attorney General Dana Nessel, asking her to investigate what they said were widespread violations of the state's ban against unlicensed for-profit businesses practicing medicine.

Laws in many states, including Michigan, prohibit for-profit businesses owned by those who do not have medical licenses, from practicing medicine.

Physician practices must be owned by licensed clinicians, and it's their job to make treatment decisions about patient care.

Commonly referred to as a Corporate Practice of Medicine doctrine, Michigan's version of the law provides exceptions for nonprofit hospitals and includes provisions allowing non-medical personnel to make billing, accounting, IT and related decisions.

The Michigan State Medical Society is a state branch of the American Medical Association, and CEO Tom George, a Kalamazoo anesthesiologist, previously said members had concerns that for-profit companies were circumventing state law.

"There may be instances where there have been egregious violations; there may be others where companies have found loopholes to evade the intent of the law," George said.

A nationwide concern

Peters' inquiry extends well beyond Michigan's borders — he requested documents from Envision Healthcare, Nashville, Tenn., TeamHealth, Knoxville, Tenn., Lifepoint Health, Brentwood, Tenn., and US Acute Care Solutions, Canton, Ohio.

Traverse City radiologist Leah Davis, who serves on the Michigan State Medical Society's board, said the efforts were not coordinated.

"But the fact that Sen. Gary Peters has initiated an investigation of private equity groups at the same time that MSMS and MOA (the Michigan Osteopathic Association) have called for an investigation into violations of the corporate practice of medicine law in Michigan is evidence of how widespread and concerning CPoM has become," Davis said.

Private equity and physician staffing companies are subject to frequent mergers, acquisitions and even some bankruptcies, making it difficult to determine ownership and service locations.

Court records, federal SEC filings, corporate websites and financial reporting gives some information about each of the four companies' staffing contracts in Michigan.

Envision Healthcare

Envision, which employs about 20,000 medical workers across the U.S., was created in 2016, court records show, when Envision Healthcare Holdings, Inc. and another medical group, AMSURG Corp., merged.

In 2018, a New York private equity firm, KKR, acquired Envision for $9.9 billion, a California physician group sued Envision in 2021, accusing the company of violating that state's ban on the corporate practice of medicine and, in 2023, Envision filed for bankruptcy.

Ownership was later turned over to the company's creditors, court documents show.

An Envision spokesperson on Monday confirmed the company was among those Peters' contacted.

"Envision intends to work transparently with Senator Peters on his request," the company spokesperson wrote in an emailed statement.

Emergency Physicians Medical Group of Ann Arbor identifies itself online as an Envision Physician Services provider, staffing hospital emergency departments in five states, including 24 hospitals in Michigan.

Emergency Physicians Medical Group, on its website, lists Munson Hospital in Grayling and Munson Hospital in Cadillac as among these staffing clients, although a Munson Healthcare spokesperson said the hospital system has contracted with another private equity group, SCP Health.

"Emergency Physicians Medical Group did previously provide staffing for MHC Grayling and MHC Cadillac hospitals," said Megan Brown, chief marketing and communications officer. "However, we transitioned to SCP Health in 2023 to provide emergency medicine services across the system with both of those hospitals already transitioned."

All Munson Healthcare emergency departments will be staffed by SCP Health-contracted physicians by July, Brown said, adding that most existing emergency medicine providers either have made, or will make, the transition to SCP Health.

SCP Health, based in Atlanta, works with 469 healthcare facilities in 36 states, according to its website.

Brown said working with a staffing company that is 30-percent physician-owned and whose board chair is an emergency medicine physician were among deciding factors as far as the hospital system working with SCP Health.

Earlier this month, Jonathan Jones, a physician and president of the American Academy of Emergency Medicine, sent a letter to Munson Healthcare Board Chair Kenneth Bloem, expressing concerns about the SCP Health contract and requesting a board review.

"It is our belief at the AAEM that emergency physicians must remain free of corporate influence because of their difficult role as advisers for the uninsured patient," Johnson said. "Certainly we feel that it is in the best interest of the patients to have emergency physicians unencumbered by the profit concerns of a corporation."

SCP Health is owned by private equity firm Onex.

Munson Healthcare does not have current contracts with any of the four firms Peters is seeking documents from, Brown said.

"Senator Peters has demonstrated a longstanding commitment to healthcare — and especially rural healthcare in Michigan," Brown said. "We appreciate his support and leadership on efforts to protect patients and ensure high-quality, safe care."

TeamHealth

Blackstone, a New York private equity firm, acquired TeamHealth in 2017 for $6.1 billion, according to the company's website. TeamHealth employs about 15,000 medical workers and has contracts to staff about 600 emergency departments, including Ascension St. John Hospital in Detroit.

In July, Ascension St. John emergency department physicians voted to unionize, negotiations have yet to result in a new contract and, on Monday, its emergency physicians and physician assistants said they planned to strike.

Dr. Michelle Weiner, who said her contract is with St. John Emergency Services, which has a business connection to TeamHealth, detailed what she described as unacceptable working conditions.

"At night we were covering 37 beds, when most physicians are only supposed to cover around 12," Weiner said.

Physicians were expected to cover the emergency department and the pediatric emergency department, which are at different ends of the building, with separate entrances, separate security offices and separate support staff, she said.

"What they were asking us to do would be to cover our modules in the main ER with the adults, including all the traumas, and run over and try to see the sick kids," Weiner said. "People are not willing to take chances when it comes to kids — that was the line in the sand."

TeamHealth, in a public statement, said Ascension St. John's emergency room department is fully staffed, the company puts patient care and clinician well-being first and wait times averaged minutes, not hours as some had claimed.

Weiner said TeamHealth "door-to-doc times" — statistics on how quickly patients are seen by a doctor — could be misconstrued, as they measured how long it takes emergency department staff, not necessarily physicians, to conduct a medical screening exam or place an order for services such as a blood test.

"Then the patient goes back into the waiting room to wait for another 10 hours ... or however much time they wait, to see a doctor and get treated," Weiner said. "A lot of hospitals are doing this to make the hospital look better."

A one-day strike is planned April 18; on April 10, Jones of the American Academy of Emergency Medicine, sent a letter to Ascension St. John, similar in tone and message, as his April 4 letter to Munson Healthcare.

Lifepoint Health

Apollo Global Management, a New York private equity firm, in 2018 acquired Lifepoint Health for $5.6 billion, records show, which included ownership of Michigan hospitals in Hancock, Ishpeming and Marquette.

UP Health System in Marquette is the Upper Peninsula's only Level II trauma center and some physicians employed there told Homeland Security Committee staff a promised joint venture with Duke LifePoint Healthcare had not materialized.

Physicians also said cuts to the hospital's cleaning staff resulted in unclean conditions at the facility and medical staff having to spend time cleaning rooms.

Lifepoint, in a statement, said the company looked forward to responding to Peters' inquiry and furthering conversations with senators who have an interest in the company's operations and community commitment.

US Acute Care Solutions

Apollo Global Management in 2021, also invested $470 million in US Acute Care Solutions, a physician staffing company treating patients in 26 states, including in about 300 hospital emergency departments, according to its website.

US Acute Care Solutions Vice President Marty Richmond acknowledged Wednesday the company was among those who are providing documents.

"We are in receipt of Senator Peters' letter, and we will gladly participate in his Committee's work as USACS is confident our physician-owned model of care is in the best interests of patients, physicians and hospitals," Richmond said.

US Acute Care Solutions provides emergency department staffing to one Michigan hospital, Ascension Genesys in Grand Blanc, according to the company's website.

The company is physician-owned, although Peters in his letter, said the company's financial arrangement with Apollo raised questions about physicians' clinical independence.

A cautionary tale

The recent closure of another physician staffing company, American Physician Partners, is read by some as a cautionary tale for hospitals, physicians, patients and investors in Michigan and beyond.

In 2015, Brown Brothers Harriman, a private equity firm and investment bank, started American Physician Partners, which by 2023 had contracts with more than 150 emergency departments and walk-in clinics in 18 states, including several in Michigan.

Brown Brothers Harriman is influential — records show Alan Greenspan, former chairman of the U.S. Federal Reserve, once worked there and Prescott Bush, President George H. W. Bush's father, was one of the company's founders.

American Physician Partners stopped services in mid-July, filed for bankruptcy in September, citing debt, pandemic losses and a new federal law, the No Surprises Act, which is aimed at protecting patients from unexpected medical bills.

A spreadsheet compiled by clinicians and published online lists hospitals and clinics that had contracted with APP — some of whom had two weeks to secure medical coverage for their emergency departments.

One of those hospital systems, McLaren Health Care, previously said they took over their own staffing and patients experienced no gap in access to care.

An unknown number of APP's emergency room staffing contracts were assumed by TeamHealth, US Acute Care Solutions and other private equity staffing firms, hospital reporting shows.

Peters' letter asked the four firms to respond with documents by April 17 and schedule a meeting with the Homeland Security Committee by May 3.