www.statnews.com
Envision may (and likely will) go away - the work, however, will not. This has been predicted by some of us for quite a while and I suspect that even before it becomes public that HCA will have a plan for a transition. The ED and the procedural areas drive revenue and earnings for every hospital/health system. Mission critical activities get attention and I suspect that the clinicians will find out very quickly that if they like where they work that a job will be there. Without the burden of meeting a private equity ROI some of these "money losing" departments will likely not look bad financially.
Well said.
People repeatedly say this, but it is without merit. Perhaps this was true 2010-2022 where the markets were perpetually green, but this is a new era. Inflation, war, politics, post covid burnout has changed that landscape. For PE to sell there needs to be a buyer and that buyer is typically funded by different PE money and debt. With interest rates up, cash reserves being held back for the coming recession, the cost of labor skyrocketing, there may not be a "greater fool" out there who wishes to take over the asset that is Envision.
Agreed - I think they will smolder and burn into bankruptcy, then they’ll probably cannibalize the parts to sell off (eg try to sell the practice elements with consulting fees to the hospitals themselves with a threat to sue on noncompetes). I doubt another PE will want to buy in because with surprise billing gone they have no way to make (sketchy) money.
At some point there is a correction. It's easy to make money when everyone is making money and the markets only go up, circa 2010-2022. The people, states, and institutions putting money into private equity at some point wise up or get sued into wising up due to their fiduciary duty to investors. If you keep losing money or losing more money than in "safe" investments, eventually you pull your money out or you retreat to safety. This will happen to PE too and either they will have to use their own cash reserves, charge less, accept lower returns, or dissolve.
All three business models face risks..albeit different ones to some extent.
Just because it is logical to retain staff does not mean that happens. Look at what the hospitals did with nurses, they paid pie in the sky locums rates and did everything they could to get their experienced staff to leave except firing them. Now they still have to give raises and a huge pool of the nursing staff has no experience. Same goes for physicians--we had a hospital terminate our ICU contract in the middle of the covid pandemic and bring on a PE staffing company and the care there suffered so much the CT surgery and neurosurgery programs shut down to go to the hospital with a properly staffed ICU. Years later they finally have it staffed but it has cost them multiples more than it would have to just keep our group from the astanomical locums they had to pay. The geniuses running hospitals do **** like this all the time.
I learned many years ago that hospital administrators believed us to be fungible in every sense of the word. One of the refreshing things (being facetious now) about this turmoil is that we anesthesia clinicians are not so fungible after all.
very similar thing happened with my group!
This is also true, it takes good leadership and knowledge of the market to realize that changes need to be made in how facilities approach their anesthesia providers so they can recruit and retain them. Just like any other business, the ones that do a good job will remain successful and the ones that continue with the old approach will continue to suffer .
Until the last 1-2 years I would completely agree with this assessment.
As my career has started to require more administrative work I have learned that hospital administrators aren’t that smart or even accomplished. Look up their credentials, these are not the top of the top MBA grads, mostly career bureaucrats. Most of the ‘cabinet’-level administrators like COO and CNO are career clipboard nurses. They run meetings like bad dictatorships where there’s no debate and everything is rubber stamped. You would find much more talented leadership in pretty much any other American industry, including those much smaller and less well-paid.
That is the thing--it literally doesn't matter what the cost is to the admin. If it was about saving money then they wouldn't do stupid crap like lose all their staff and blow their entire covid wad on locums just to end up with massive staffing holes and a deveatated workforce with no pride in their employer. There is some nonsensical budgeting and metric wizardy that drives the upper levels in order to propel then to the next upper level. The ruins of whatever they leave behind doesn't matter to them.
I'm not sure credentials matter much but the results definitely reflect the low tier of leadership that exists (though they seemingly get paid as much as a big 4 consulting partner). We worked in two different hospitals--the one that fired us had a CEO who didn't come to the ICU a single time during the onset of the pandemic, didn't join any of the emergency planning meetings, nothing--she decided to replace the ICU physician staffing with no coherent plan, lost the hospital's most lucrative surgical lines, then got promoted to go run the system at a regional level. The guy in the other hospital didn't get promoted but the CEO would visit the ICU daily and help prone people. That ICU lost almost none of their nurses despite the flat pay. He knew showing up and being there was what was needed and it worked. It coat him nothing but time to do and it was really inspiring.
That might have been a promotion that got her in a job with less direct power so it was harder for her to screw things up. You see that sort of thing sometimes.
They already bled the investment dry. They'll be walking away with a loss on paper but millions in their pockets
Most likely, Somebody else will be signing their paychecks. Whether things will get better or worse will depend on the local practice.
My bet would be hospitals try direct employment. The problem with destruction of private practice groups in every field has been that medicine is so complex that once the groups are gone, no one has the expertise or willingness to rebuild them from the ground up again when PE/corporations make their exit. This leads to direct employment more often than not by hospitals and large healthcare conglomerates
www.bloomberg.com
Good executives are worth their weight in gold though. YNHHS comes to mind- they had fantastic leadership and incredible employee satisfaction for the better part of two decades largely owing to great leadership. When those leaders transitioned out last year, the entire operation went from printing black to bleeding red with the first layoffs in the history of the system and employee satisfaction rapidly declining. I've seen good and bad leadership over the years, with most hospitals leaning more towards the bad side of things and good being a rarity that pays enormous dividends
Physician executives are often pretty bad too. Many seem to ride the same train the non physician execs do.
Cms is cutting by another 8 percent
They just write off losses anyway
Fascinating article!The Private Equity Business is “Not All It’s Cracked Up to Be”
Institutional investors in private equity are getting shortchanged, says Jeff Hooke, a Carey Business School senior lecturer and expert in finance and investment banking.carey.jhu.edu
Envision is not too big to fail. IMHO private equity has not been a positive in health care for the most part.
Sure, I'll buy that. The only problem is that anesthesia practice is a money loser.
Women have ruined medicine. They belong in the kitchen and if they must work, they should be nurses with cute dresses and hats.
I always enjoy when these places tout the benefits package like they’re somehow exceptional. At my academic shop for example they claim they “match 10%” till you realize it’s got a 5 year vesting and they match 10% that ends at 250K, plus oops last two years the hospital was strapped so they contributed nothing. And everyone says “oh but the benefits are really good”.
Up front I'll say that I agree with you. Many of, at least the places that come to my mind, that don't do it I imagine can't honestly afford to or don't need to based on where the practice located or some combination of both.
not sure how those jobs are our peer level... law firm/PE partners make many times doctors make, without the loans.
I work for envision and know upper level leadership. In a market with reduced anesthesia supply envision has a large number of personnel. That means they have the leverage to successfully negotiate subsidies or they can just sell the non competes of personnel they have in failing markets. Either way the companies that successfully negotiate subsidies as the ones that will survive.
