Gretchen Morgenson reports for NBC News.com on a medical director fired after exposing the risks of emergency treatment at his hospital in Kansas City. Inadequate staffing jeopardized patient safety. But, his private-equity employers, Kolberg Kravis (KKR) and, before that, Clayton, Dubilier & Rice, like other for-profit owners of medical groups, were focused on maximizing profits.
Ray Brevont, the medical director and independent contractor, complained about the fact that, at times, understaffing in the emergency department meant no physician was present when a patient’s life was at risk. Brevont was let go. How often does this happen? For sure, many other doctors in Brevont’s position fear speaking out against their employers and putting their jobs at risk.
Today, four in ten emergency departments are controlled by for-profit entities, which are responsible for the staffing. KKR, which owns Envision Healthcare, and Blackstone, another private equity group, which owns TeamHealth, are two big companies in this space.
Private equity firms are generally in the business of buying up companies, finding ways to increase their profits, often through cutting costs, and selling them off a few years later at a profit. Because emergency departments are big profit centers, private equity firms are buying up control of these departments and have been charged with interfering in the practice of medicine to the detriment of patients.
Private equity firms implement policies in hospital emergency departments that are often unavailable for public scrutiny. But, Brevont claimed that KKR’s “code blue” policy put patients’ lives in danger. Emergency room physicians were expected to care for patients outside the hospital’s emergency department. The consequence: No emergency room physician in the emergency department.
Brevont sued Emcare, the company that hired him, which is a subsidiary of Envision, saying he had been wrongfully let go. Under federal law, the emergency department was required to have a physician present at all times. Brevont’s boss told him that profits explained the failure to have a physician present but “Profits are in everyone’s best interest.”
This is not the first suit against KKR for interfering wrongly in the practice of medicine. Recently, ER physicians in California sued KKR’s Envision Healthcare for wrongful interference in the practice of medicine.
Brevont won $26 million in damages. Envision blamed a hospital policy for the understaffing and took no responsibility. The appellate court ruling stated that Envision “makes a physician the owner of these subsidiaries to comply with the regulations, which prohibit a publicly traded company from providing medical services.” Of note, the named physician owner had nothing to do with the emergency departments he allegedly owned.
Most states require physicians to be owners of these companies as nonphysicians cannot be practicing medicine or directing decisions about treatment. But, for-profit companies find ways around the issue. When they are found to violate the law, they tend not to be penalized in a way that would deter future activity of the same sort. The penalty too often does not fit the crime.
Why is the profit motive so dangerous? Companies might decide how much time a physician can spend with a patient, what tests the physician can administer and whether the patient needs to see a physician at all, with little focus on evidence-based medical practice or patient needs.
For reasons that are impossible to justify, the federal government often continues to allow these companies to continue their businesses after they have been found guilty of fraud and other wrongs if they say they will commit to behaving appropriately down the line. Curious how we throw people in jail for the rest of their lives for far less serious crimes.
Here’s more from Just Care:
- Round up: Emergency care
- How a for-profit program that should provide all-inclusive care neglects its elderly patients
- Dental fraud: How to protect yourself
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Biden administration bent on privatizing traditional Medicare