ER Outsource to Lowest Bidder

Yves here. We’ve been amplifying the considerable work of Eileen Appelbaum and Rosemary Batt on the way that private equity controls big swathes of hospital operations to their profit and the detriment of patients. Many hospitals have outsourced emergency rooms and hospitalists and speciality practices like orthopedics by contracting with private equity firms that provide and control the staff in these activities.

Hospitals have used these outsourced staffing arrangement to engage in “surprise billing” by deliberately putting doctors in operating room teams who are not part of the network of practitioners covered by his insurance to jack up prices. Despite press and legislative scrutiny, efforts to rein in surprise billing have been only partly successful.

Dr. Ming Lin, and healthcare providers like him, are fighting to take back control of medicine from private equity firms that are gobbling up practices and facilities. Should Wall Street make life and death decisions based on the bottom line?

But of course! Shareholder Value!


The nurses are on strike at the big non-profit Providence Health Care system in Portland. CEO says “we lost over $1 Billion last year and we can’t afford nurses’ salary demands”. But the CEO is fine with bringing in scab travel nurses at double the cost to keep the hospital open. And the nurses ask, “If we’ve lost $1 Billion why hasn’t the non-profit CEO cut his $12 million/yr salary?” Non-profit, just means that there are no shareholders so more money can be diverted to excessive Executive Compensation.

Nurses union accuses Providence of breaking Oregon law |



There’s a simple solution for that. And it’s already used in other professions.

I am a CPA. I have restrictions on how I can organize my practice. One of those is that CPAs must own the majority interest in any CPA firm. I think lawyers have a similar restriction.

So why don’t doctors have that? Why aren’t the owners of hospitals and other health care facilities limited to doctors?



Doctors used to be able to own hospitals, diagnostic labs, and medical imaging centers, but they found that doctor-owned facilities led to unnecessary medical care to pad the bottom line.



Might vary from state to state, but they still can, at least in Oklahoma. Not sure if this is the one I read about 15-20 years ago when a group went out on a limb. I thought it was quit funny the original article (which I can’t find), the surgeons became much more cost aware when overtime pay for nurses, etc., OR personal essentially came out of their pocket. IF I had a nickel for every “emergency” case I did that was in reality for surgeon convenience, my net worth would be double.

And here is a list/review of 56 physician owned hospitals.

Of course definition of “hospital” varies. Could be what most would consider a hospital to one that is strictly orthopedic surgery with overnight stay capabilities.

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