People with Medicare are among the only Americans with health insurance who are spared surprise medical bills. Everyone else lives in fear of going to an in-network hospital and not being able to ensure that the doctors who treat them are also in-network. To date, private equity firms that own doctors’ groups are succeeding at keeping Congress from ending these surprise medical bills.
It’s hard to understand why these moneyed interests have been able to get away with charging enormous sums for care they provide. But, then it’s hard to understand why hospitals and pharmaceutical companies have been able to get away with charging astronomical rates.
The overwhelming majority of Americans want Congress to make health care affordable. It’s a top priority for Republicans and Democrats alike. As it is, one in four Americans say that they skip or delay care because of the cost, even when they have insurance. One in six received a surprise medical bill in 2017.
The power behind surprise medical bills comes from investors in private equity and venture capital firms, according to Kaiser Health News. Particularly in the areas of anesthesia and emergency medicine, investors now own large physician groups. To maximize their profits, they stay out of health insurance networks. And, they charge patients very high prices.
Instead of working for hospitals, these doctors’ groups work for companies owned by hedge funds. And, hospitals contract with these companies for their services, sometimes getting a share of the profits the companies earn. Members of Congress fear taking down these companies. If they act, they are likely to jeopardize their reelection, with these investor-owned companies supporting their opponents.
The two biggest companies that own doctors’ groups are TeamHealth and EmCare, which are owned by Blackstone and KKR respectively, two large private equity firms. They are doing particularly well since, in most states, they have no reason to provide in-network services. They can stay out of network and charge patients with private insurance pretty much what they will on top of what the insurer pays.
The only solution that will rein in health care costs and protect Americans is for the federal government to step in and regulate all provider rates. That is not on the table in Congress. The best solution on the table–proposed by employers and insurers–would have insurers pay out-of-network physicians the average of the rate in-network physicians are paid. That rate is already far higher than Medicare rates.
But, the employers and insurers are being outspent by the private equity firms. Private equity is arguing for arbitration. New York has a state law that settles surprise billing disputes through arbitration and it has served the private equity firms well. Costs have gone up. Because private equity firms have deep pockets, so far, they are winning.
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