Patients seeking emergency treatment at the busy Overland Park Regional Medical Center in Kansas near Kansas City, Missouri, didn’t know their safety was potentially at risk. But the medical director of the emergency department saw the danger in 2012 and for years urged his bosses to address it by adding staff members.
Then he was fired.
What happened to the medical director, a former Army doctor named Ray Brovont, isn’t an anomaly, some physicians say. It is a growing problem as more emergency departments are staffed by for-profit companies. A laser focus on profits in health care can imperil patients, they say, but when some doctors have questioned the practices, they have been let go. Physicians who remain employed see that speaking out can put their careers on the line.
Today, an estimated 40-plus percent of the country’s hospital emergency departments are overseen by for-profit health care staffing companies owned by private equity firms, academic research, regulatory filings and internal documents show. Two of the largest, according to their websites and news releases, are Envision Healthcare, owned by KKR, and TeamHealth, of the Blackstone Group. EmCare, the health care staffing company that managed Brovont, is part of Envision.
Private equity firms have taken over a broad swath of health care entities in recent years. They use large amounts of debt to acquire companies, aiming to increase their profits quickly so they can resell them at gains in a few years.
There’s a reason private equity firms have invested in companies staffing hospital emergency departments, said Richard M. Scheffler, a professor of health economics and public policy at the University of California, Berkeley.
“The money in the hospital is in the ER,” he said. “It is the biggest net generator and a huge profit center for almost all hospitals.” The problem, he said, is that “ER doctors are being told how to practice medicine” by financial managers.
Brovont, the fired Overland Park emergency room doctor, agreed.
“These administrators who make these changes and implement these policies don’t feel the downstream effects of their policy changes,” he said. “They look at the outcome, and the outcome is ‘Hey, we’re making money.’”
Three places at once
As a former military doctor who saw combat in Iraq, Brovont knew how to solve problems quickly. He took that approach to leading the emergency department at Overland Park.
“The goal was to identify an issue before there was a bad outcome,” he said.
One bad outcome Brovont hoped to avoid was related to “code blues,” urgent calls to help Overland Park patients whose hearts had stopped beating or who were no longer breathing. After the HCA-owned hospital doubled its capacity to 343 beds and added a separate pediatric emergency room in 2014, the facility’s code blue policy became unsafe for patients, Brovont and his 18 fellow ER doctors concluded. It required an emergency department doctor to attend to code blues elsewhere in the hospital, which meant leaving the emergency room without a physician.
“My physicians were being asked to be in three places at once,” Brovont said.
Staffing issues had been a concern for Brovont since he joined the hospital in 2012. He had spoken up about them early on, according to documents in a lawsuit he filed alleging wrongful discharge, but got nowhere. The expansion of the hospital made the problem worse and brought the matter to a head.
Staffing at the hospital was handled by EmCare, a health care staffing company owned since 2011 by the private equity firm Clayton, Dubilier & Rice. The firm exited its investment in EmCare in March 2015 after the company issued stock to the public, but EmCare directors affiliated with Clayton, Dubilier & Rice remained on EmCare’s board into 2017. EmCare became Envision Healthcare and was bought by a different private equity company, KKR, in 2018.
In 2015 and 2016, frustrated by the inaction on the code blue policy, Brovont took his and his colleagues’ concerns to Dr. Patrick McHugh, his superior at EmCare. Federal law required Level II trauma centers like Overland Park to make a physician available 24/7 in the emergency department to examine incoming patients, Brovont told McHugh.
Hiring an additional doctor would solve the problem, but that didn’t happen. McHugh acknowledged to Brovont that the decision was financially motivated, court records show, and said in an email to the physicians: “Profits are in everyone’s best interest.”
Continuing to argue for a change in the policy, Brovont sent a memo to management outlining his unit’s fears; he was fired six weeks later, in January 2017. “There is a responsibility as the corporate representative to support the corporation’s objectives,” McHugh told him, according to court filings.
In addition, Brovont was barred from working at nearby hospitals whose emergency departments EmCare oversaw. Because he was an independent contractor for EmCare and not an employee of the hospital, there was no tribunal to which he could petition against his dismissal.
Brovont, who hasn’t spoken out about his case until now, sued EmCare for “wrongful discharge in violation of public policy” in 2017. A jury awarded him $29 million, including $20 million in punitive damages, which was reduced to $26 million on appeal. That ruling was final.
A spokeswoman for Envision, EmCare’s parent, said in a statement that the company complies “with state laws and operates with high ethical standards that put patients’ health and safety first.”
“Envision clinicians, like all clinicians, exercise their independent judgment to provide quality, compassionate, clinically appropriate care based on their patients’ unique needs,” it said. “The concern raised by Dr. Brovont was related to a hospital policy, not an Envision policy, and predates Envision’s current leadership team.”
McHugh didn’t respond to an email and a phone message seeking comment. He no longer works for EmCare. Overland Park Medical Center wasn’t a party to Brovont’s litigation. Clayton, Dubilier & Rice didn’t respond to a request for comment.
Not only does Brovont’s case shed light on pressures emergency physicians face when they are directed by profit-oriented companies; it also illustrates how for-profit health care entities like Envision operate despite laws created to bar corporations from practicing medicine. For example, the appellate court that ruled in Brovont’s favor cited EmCare’s control of medical practices owned, on paper, by physicians, stating that the company “makes a physician the owner of these subsidiaries to comply with the regulations, which prohibit a publicly traded company from providing medical services.”
Envision, based in Nashville, Tennessee, says its emergency medicine group partners with more than 540 facilities in 45 states. As the court noted in the Brovont case, the physician who owned the EmCare subsidiaries wasn’t involved with its daily operation.
Thirty-three states have laws preventing nonphysicians from influencing clinical decisions. They require health care to be provided by entities owned by licensed practitioners. California, Kansas, New York, Ohio, Pennsylvania and Texas are among the states with such laws.
Beginning in the 19th century, states moved to protect patients with such measures. Legislators recognized that although physicians swear a duty to put patients’ interests first, when a for-profit entity enters the picture, a push for revenue may take precedence. Laws can also ban fee-splitting arrangements between medical practitioners and nonlicensed individuals and entities.
But enforcement of the laws has been spotty in recent years. And even when cases are filed against entities practicing medicine illegally, penalties can be modest.
In 2015, for example, then-New York Attorney General Eric Schneiderman moved against Aspen Dental Management, a company providing administrative services to dental offices nationwide. Backed by three private equity firms, Aspen contended it wasn’t performing dentistry. But Schneiderman’s investigators found that Aspen routinely offered incentives or pressured staff members to increase sales of dental services and products in their offices and shared in dentists’ profits, a direct violation of New York law.
Schneiderman’s settlement with Aspen Dental, however, wasn’t even a slap on the wrist. With $645 million in annual revenue at the time, Aspen Dental paid only $450,000 to settle the case. It didn’t admit the allegations and said it hadn’t made decisions about dental care.
In bringing the Aspen Dental case, Schneiderman said it demonstrated the perils of corporations’ practicing medicine. The risks are even greater in emergency departments, said Dr. Robert McNamara, the chairman of emergency medicine at Temple University’s Lewis Katz School of Medicine in Philadelphia and the chief medical officer of the American Academy of Emergency Medicine Physician Group.
“Putting the profit motive in between the patient and the physician can lead to untoward consequences in terms of care,” McNamara said. The companies “choose how many patients an hour your doctor sees. They can direct some of the testing protocols. They can decide whether you’re seen by a doctor or less skilled provider, a physician assistant.”
Asked about McNamara’s criticism, the Envision spokeswoman said the company “follows an operating structure that is common across the health-care sector and widely used by nonprofit, privately-held and public groups as well as hospitals and insurers. Industry-wide legal challenges to that structure have proved meritless.”
A push for profits can also result in inappropriate and costly admissions to hospitals from emergency departments, which was the basis for a 2017 case against EmCare. After physicians came forward with allegations of Medicare fraud involving EmCare and a hospital chain that had hired it, the Justice Department filed civil suits against both entities. EmCare had admitted Medicare patients unnecessarily to the hospitals whose emergency departments it oversaw, prosecutors said, and received remuneration from the hospital chain for doing so. Medicare pays at least three times more for inpatient admissions than it does for care billed as observation or emergency room visits.
Without admitting the allegations, EmCare agreed to pay $29.8 million in December 2017 to settle the Justice Department’s case. (The hospital chain settled with prosecutors later, paying $260 million without admitting the allegations.) When EmCare settled, Envision, its parent, entered into a corporate integrity agreement with the Department of Health and Human Services. As is typical under such a deal, the HHS inspector general agreed not to seek to exclude Envision from participating in Medicare or other federal health care programs if it changed its practices.
Envision committed to “full compliance with all Federal health care program requirements” and created a compliance program with training on anti-kickback measures. Envision’s corporate integrity agreement expires in December.
300 practices in 20 states
How do private equity-backed for-profit health care companies like Envision operate in states barring corporations from practicing medicine? Dr. Gregory J. Byrne, an emergency medicine practitioner in Southlake, Texas, provides a clue.
In recent years, Byrne, 70, has been the owner of up to 300 emergency medicine practices tied to Envision or EmCare in an array of states, a legal filing in the Brovont case shows. Byrne had been hired and paid by EmCare to be the owner, on paper, of the physician practice running the emergency department that Brovont directed at Overland Park.
Until Brovont sued for wrongful termination, however, he said he had neither met nor heard of Byrne. Based on depositions and testimony in the case, Byrne played no role in the department’s oversight, court documents show. McHugh, the EmCare executive, did.
The Missouri appeals judges who ruled with Brovont in his case noted that Byrne had owned hundreds of other EmCare subsidiaries in at least 20 states.
“The exact number of EmCare subsidiaries he owns changes every month,” the ruling said, “and he does not keep track of them or take any management role in any of them. The number does not matter to him because all the profits of the subsidiaries flow to EmCare.”
The judges went on to write that EmCare paid Byrne a salary and that it would forward “operational documents for the physician ‘owner’ of the subsidiary to sign.” Byrne, a graduate of the University of Mississippi medical school, is a past president of the Texas College of Emergency Physicians in Austin.
Reached by phone, Byrne said: “EmCare is a practice management company. We do not manage medical care — that is a physician responsibility.” He declined to comment further.
Recent corporate records show Byrne is listed as an owner at an array of physician practices in 10 states: California, Kansas, Louisiana, Massachusetts, Missouri, New Mexico, Ohio, Oklahoma, Pennsylvania and Texas. Most of the practices have addresses in common with Envision. Seven of the states in which Byrne shows up as owning or managing a physician practice have laws barring the corporate practice of medicine. Byrne declined to say how many practices he oversees.
Today, Brovont practices emergency medicine at a hospital near Overland Park and runs a clinic where he provides alternative treatment options for patients with depression and post-traumatic stress disorder.
Asked whether Overland Park Regional Medical Center had changed its code blue policy, a spokeswoman said, “The hospital provides physician coverage of its pediatric and main emergency departments at all times, and our emergency room physicians do not leave the E.D. to cover code blues in the hospital.”