Letters to the Editor is a periodic feature. We welcome all comments and will publish a selection. We edit for length and clarity and require full names.

Envy for-profit US healthcare? Check out this MD whose wife is a medical billing expert who spent over a year challenging an egregious billing error. After it all they still paid $1200. These are resourceful knowledgeable people who got taken for a ride. https://t.co/fnlUz3KTJb

— Raghu Venugopal MD (@raghu_venugopal) October 26, 2022

— Dr. Raghu Venugopal, Toronto

A Plea for Sane Prices

I just read your story about the emergency room billing for a procedure that was not done (“A Billing Expert Saved Big After Finding an Incorrect Charge in Her Husband’s ER Bill,” Oct. 25). We too had a similar experience with an emergency room and a broken arm that was coded at a Level 5, and it was a simple break. No surgery needed, and it took them only 10 minutes to set and wrap the broken arm but charged us over $9,000. I disputed the charges, and it took six months to get them to reduce the bill but they never admitted that they coded a simple break incorrectly to jack up the price of the bill. If it had been a Level 5 issue, we would not have sat in the waiting room for six hours before being seen. It was a horrible experience, and I think ERs all over the nation are doing this to make up for the non-payers they treat every day. It is robbery.

— Terrence Campbell, Pocatello, Idaho

It would be great if the vaulted @KHNews would clearly distinguish between the ED pro fee billing & hospital charges as it is not entirely clear here w/ in network svs.—Billing Expert Saved Big After Finding an Incorrect Charge in Her Husband’s ER Bill https://t.co/jRFAYb5F0P

— Ed Gaines (@EdGainesIII) October 25, 2022

— Ed Gaines, Greensboro, North Carolina

As you said, CPT codes should always be examined. This case is probably more than “just an error.” As a retired orthopedic surgeon, chief of surgery, and chief of staff at a North Carolina hospital, I have seen care such as this coded exactly like this with the rationale that, “Hey, this was a fractured humerus and it was manipulated and splinted.” 24505 is correct IF that is the definitive treatment, which it was not here. Even code 24500 would indicate definitive treatment without manipulation. This was just temporary care until definitive care could be done later. It should be billed as a visit and a splint. The visit for this, if it was an isolated problem (no other injury or problems), would qualify only as a Level 2 visit. That frequently gets upcoded as well by adding a lot of non-pertinent family, medical, and social history and a complete physical exam (seven systems at least) and a whole lot of non-pertinent “medical decision making.” All of that should be documented in the medical records even if the hospital stonewalls on the CPT codes.

Look closely at medical records and you will find frequent upcoding, if you are familiar with the requirements for different levels of treatment.

— Dr. Charles Beemer, Arvada, Colorado

Never attribute to Baumol's cost disease that which is adequately explained by malice. https://t.co/RbKOlBgCmp

— Shashank Bhat (@shashank_ps) October 26, 2022

— Shashank Bhat, San Francisco

A number of years ago, I was billed using a code that described a treatment that was not carried out. In similar fashion, I talked with my insurance company, which basically said it did not care whether the treatment took place or not as all it required was for a valid code to appear. I also contacted the Virginia Bureau of Insurance, which approves the various policies, and it said it had no jurisdiction over claims. I decided to let the hospital sue me for the disputed amount and defended myself in district court. Despite their attorney and four “witnesses,” the case was thrown out because the hospital was both unwilling and unable to justify the charges to the satisfaction of the judge. They did not want anybody in power to testify because of the questions they would have been asked, so they left it to people who were completely clueless. The takeaways from this were:

• Hospitals make up the numbers and leave them grossly inflated so they can claim that they are giving away care when they give discounts on the made-up numbers.
• Hospitals turn employees into separate billing entities so they can double-charge.
• Hospitals open facilities such as physical therapy in hospital locations because insurance companies will pay higher amounts when treatment is carried out in a hospital environment.
• Insurance companies and state insurance agencies do not act as gatekeepers to protect their clients/taxpayers.
• The insurance companies and the providers have a shared interest in the highest possible ticket prices and outrageous charges because the providers get to claim how generous they are with “unremunerated care,” and if the prices were affordable then they could not justify the high prices for insurance premiums and the allowed administration/profit share of 20% would be based on a far smaller amount.

In any other industry, this would have resulted in multiple antitrust suits. U.S. health care is a sad example of government, health care industry, and insurers all coming together against the interests of consumers. After this court case, I wanted to form a nonprofit to systematically challenge every outrageous charge against people who, unlike myself, did not believe or know how to defend themselves. If hospitals and other providers were forced to go to court to justify their charges on a systematic basis, pricing sanity would eventually prevail.

— Philip Solomon, Richmond, Virginia

The obvious solution to prosecute the hospital for fraud followed by a civil suit"A hospital charged nearly $7,000 for a procedure that was never performed" https://t.co/wPNNZ5cZey

— Barry Ritholtz (@ritholtz) October 31, 2022

— Barry Ritholtz, New York City

Patients as Watchdogs

Thank you for the article on Lupron Depot injections (Bill of the Month: “$38,398 for a Single Shot of a Very Old Cancer Drug,” Oct. 26). Last year, I was diagnosed with prostate cancer, though my case is not anywhere as severe as that experienced by Mr. Hinds.

Last month my urologist scheduled an MRI update for me at a facility owned by Northside Hospital Atlanta. At the suggestion of my beloved wife, I called my insurance company, UnitedHealthcare, to make sure the procedure was covered. Fortunately, it was. That being said, the agent from UnitedHealthcare mentioned that Northside Hospital’s fee was “quite a bit higher than the average for your area.” It was. Before insurance, the charge for an MRI at Northside was $6,291. I canceled the appointment at Northside and had the MRI done by a free-standing facility. Their charge, before insurance, was $1,234.

Every single encounter that I have with the health care system involves constant vigilance against price-gouging. When I have a procedure, I have to make sure that the facility is in-network,. that each physician is in-network, that any attending specialist such as an anesthesiologist or radiologist is in-network (and their base-facility as well). If I have a blood test, I have to double-check if the cost is included in a procedure or if it is separate. If it is a separate fee, I have to ensure that the analysis is also covered, and, if it is not, that it is not done through a hospital-owned facility but instead through a free-standing operation.

I have several ongoing conditions in addition to my prostate cancer — Dupuytren’s contracture, a rare bleeding disorder similar to thrombocytopenia, and arthritis. Needless to say, navigating our byzantine, inefficient, and profit-driven health care system is a total nightmare.

Health care in the United States has become so exceedingly outrageous. I cannot understand why it is not an issue that surfaces during election years or something that Congress is willing to address.

Again, thank you for your excellent reporting.

— Karl D. Lehman, Atlanta

Why capitalism without guardrails is a pipedream. Own the patent, control the pricing, and this is the result: $38,398 for a Single Shot of a Very Old Cancer Drug https://t.co/BLes77QN7F via @khnews

— Brian Murphy (@NorwoodCDI) October 26, 2022

— Brian Murphy, Austin, Texas

I was a medical stop-loss underwriter and marketer for over 30 years. Most larger (company plans for 100-plus employees) are self-funded, meaning the carrier — as in this case, UnitedHealthcare — is supplying the administrative functions and network access for a fee, while using the employer’s money to pay claims.

Every administrator out there charges a case management fee, either as a stand-alone charge or buried in their fees. Either way, they all tout how they are looking out for both the employer and the patient.

Even if this plan was fully insured, wouldn’t it have been in the best interest of all parties when they became aware of the patient’s treatment (maybe after the first payment) to reach out to the patient and let them know there are other alternatives?

The question in these cases is who is minding the store for both the patient and the employer. The employer, the insurer, and the patient could have all saved a lot of money and pain, if someone from case management had actually questioned the first set of charges.

— Fred Burkacki, Sarasota, Florida 

I did a few rounds of Lupron in my 20s for severe #endometriosis, and I had to fight my insurance company to get approved. Now, this is how much it costs for some people. https://t.co/UlB1TTtW40 #healthcare #prostatecancer

— Amanda Oglesby 🌊 (@OglesbyAPP) October 26, 2022

— Amanda Oglesby, Neptune, New Jersey

‘Bill of the Month’ Pays Off

I received a $1,075 refund on a colonoscopy bill I paid months earlier after listening to the KHN-NPR “Bill of the Month” segment “Her First Colonoscopy Cost Her $0. Her Second Cost $2,185. Why?” (May 31) and finding out the procedure should be covered under routine health care coverage. Thank you!

— Cynthia McBride, University Place, Washington

We have to close legal loopholes to make sure that cancer diagnostic procedures have the same insurance coverage as screening. Colonoscopies must be fully covered whether a polyp is found or not #ACA #colorectalcancer #CancerScreening https://t.co/slE6p3FvHe

— Erica Warner, ScD (@ewarner_12) May 31, 2022

— Erica Warner, Boston

Removing Barriers to Benefits

In the story “People With Long Covid Face Barriers to Government Disability Benefits” (Nov. 9), you stated: “Many people with long covid don’t have the financial resources to hire a lawyer.” This is incorrect. When applying for disability, you don’t need financial resources. There are law firms that specialize in disability claims and will not charge you until you win your claim. And, according to federal law, those law firms can charge only a certain percentage of the back pay you would get once the claim has been won. Also, if you lose the claim, and the law firm has appealed as many times as possible, you don’t owe anything. Please don’t make it more difficult for those who are disabled with misinformation.

— Lorrie Crabtree, Los Angeles

People unable to work due to Long Covid are facing barriers to obtaining government disability benefits.https://t.co/zWQfW5CkOS

— Ron Chusid (@RonChusid) November 10, 2022

— Ron Chusid, Muskegon, Michigan

Vaccine Injuries Deserve Attention, Too

I read your long-covid article with interest because many of the barriers and some of the symptoms faced by people with long covid are similar to those experienced by people with vaccine injuries. I’m really concerned about how there is even less attention and support for people who suffered adverse vaccine reactions.

Long covid and vaccine injuries are both issues of justice, mercy, and human rights as much as they are a range of complex medical conditions.

It’s nearly 20 months since someone I know sustained a serious adverse reaction, and it is heartbreaking how hard it has been for her to find doctors who will acknowledge what happened and try to help. There’s no medical or financial support from our government, and the Countermeasures Injury Compensation Program is truly a dead end, even as other countries such as Thailand, Australia, and the United Kingdom have begun to acknowledge and financially support people who sustained vaccine injuries.

I’ve contacted my congressional representatives dozens of times asking for help and sharing research papers about vaccine injuries, but they have declined to respond in meaningful ways. Similarly, my state-level representatives ignore questions about our vaccine mandate, which remains in place for state employees, despite at least one confirmed vaccine-caused fatality in a young mother who fell under the state mandate in order to volunteer at school.

There have been a few articles, such as …

• Why Is It So Hard to Compensate People for Serious Vaccine Side Effects?
• Feds Pay Zero Claims for Covid-19 Vaccine Injuries/Deaths
• Covid Vaccine Injury Plaintiffs Face Long Odds in U.S. Compensation Program
• Covid-19: Is the US Compensation Scheme for Vaccine Injuries Fit for Purpose?

… but no new ones have come to my attention recently, and it is concerning that the media and our political and public health leaders seem OK with leaving people behind as collateral damage.

Please consider writing a companion piece to highlight this need and the lack of a functional safety net or merciful response. My hope is that if long covid and vaccine injuries were both studied vigorously, new understanding would lead to therapeutics and treatments to help these people.

— Kathy Zelenka, Port Angeles, Washington

Given how long it took Congress to eventually approve "Agent Orange" and "Burn Pit" benefits for disabled veterans, it is at least a 15-20 year time frame and they don't have the backing or societal standing that veterans do. https://t.co/idt6tSioHc

— Matthew Guldin (@MRG_1977) November 11, 2022

— Matthew Guldin, West Chester, Pennsylvania

More on Mammograms

The article “Despite Katie Couric’s Advice, Doctors Say Ultrasound Breast Exams May Not Be Needed” (Oct. 28) does a disservice to women and can cause harm. An ultrasound is saving my life. I had two mammograms with ultrasounds this year. Although the first mammogram showed one cyst that was diagnosed as “maybe benign,” I knew it wasn’t. Why? Because I could feel the difference. I insisted on a second, and sure enough a large-enough cyst that’s definitely malignant was found. I had breast surgery on Oct. 31, followed by radiation treatment and, if needed, chemotherapy later. This article will deprive other, less aggressive and experienced women who do not have health care credentials or a radiologist for a husband to be harmed by being lulled into complacency.

— Digna Irizarry Cassens, Yucca Valley, California

Why do some women with dense breasts get additional screening while others do not? ⁦@CNN⁩ explains. ⁦@IronwoodCancer⁩ https://t.co/uFZZKo6RO4

— Patricia Clark (@patriciaclarkmd) October 27, 2022

— Patricia Clark, Scottsdale, Arizona

Your article on breast cancer screening neglected to present the supplemental option of Abbreviated Breast MRI (AB-MRI). The out-of-pocket cost at many clinics ranges from $250 to $500. For a national listing of clinics that offer this supplemental screening option, please go to https://timetobeseen.org/self-pay-ab-mri. For benefits, just Google “Abbreviated Breast MRI.”

— Elsie Spry, Wexford, Pennsylvania

Why didn’t more #SeniorCitizens leave for safer havens during Hurricane Ian as recommended? ⁦@judith_graham⁩ rightfully suggests that learning why is critical as the population of older people grows and #NaturalDisasters become more frequent. https://t.co/7k8bvNQxug

— Donald H. Polite (@DonaldPolite) November 2, 2022

— Donald H. Polite, Milwaukee

Preparation Plans for Seniors: All for One and One for All

At least 120 people died from Hurricane Ian, two-thirds of whom were 60 or older. This is a tragedy among our most vulnerable population that should have been prevented (“Hurricane Ian’s Deadly Impact on Florida Seniors Exposes Need for New Preparation Strategies,” Nov. 2).

Yes, coming together and developing preparedness plans is one way to protect seniors and avoid these kinds of tragedies in the future, but since this is not a one-size-fits-all situation, organizations that help seniors across the country must first look internally and be held accountable by making sure their teams always have a plan in place and are prepared to activate them at a moment’s notice.

During Hurricane Ian, I saw firsthand what can happen when teamwork and effective planning come together successfully to protect and prepare seniors with chronic health conditions like chronic obstructive pulmonary disease who require supplemental oxygen to breathe.

Home respiratory care providers and home oxygen suppliers worked tirelessly to ensure our patients received plenty of supplies to sustain them throughout the storm, and when some patients faced situations where their oxygen equipment wasn’t working properly inside their homes, staff members were readily available to calmly talk the patient through fixing the problem. After the winds receded, mobile vans were quickly stationed in safe spaces for patients or their family members to access the oxygen tanks and supplies they needed. If patients were unable to make it to these locations, staff members were dispatched to deliver tanks to their homes personally and check in on the patient.

Patients were also tracked down at shelters, and a team of volunteers was formed around the country to find patients who could not be reached by calling their emergency backup contacts, a friend, or family member. Through these established systems, we were able to remain in contact with all of our patients in Ian’s path to ensure their care was not impeded by the storm.

Organizations should always be ready and held accountable for the seniors they care for in times of disaster. I know my team will be ready. Will yours?

— Crispin Teufel, CEO of Lincare, Clearwater, Florida

Understanding the impact of #Climatechange on older people is critically important as the population expands and #naturaldisasters become more frequent and intense.https://t.co/RKB7pA28nr

— Ashley Moore, MS, BSN Health Policy (@MooreRNPolicy) November 2, 2022

— Ashley Moore, San Francisco

The Tall and the Short of BMI

I am amazed that in your article about BMI (“BMI: The Mismeasure of Weight and the Mistreatment of Obesity,” Oct. 12) you never mentioned anything about the loss of height. If a person goes from 5-foot-2 to 4-foot-10, the BMI changes significantly.

— Sue Robinson, Hanover, Pennsylvania

I've been against this since after gastric bypass surgery I got down to 164 pounds but at 5'7" BMI still considered me overweight. How an overreliance on BMI can stand between patients and treatment https://t.co/OawzhO0aOk

— Steve Clark (@blindbites) October 10, 2022

— Steve Clark, Lee’s Summit, Missouri

Caring for Nurses’ Mental Health

During the pandemic, when I read stories about how brave and selfless health care heroes were fighting covid-19, I wondered who was taking care of them and how they were processing those events. They put their own lives on the line treating patients and serving their communities, but how were these experiences affecting them? I am a mother of a nurse who was on the front lines. I constantly worried about her as well as her mental and physical well-being (“Employers Are Concerned About Covering Workers’ Mental Health Needs, Survey Finds,” Oct. 27). I was determined to find a way to honor and support her and her colleagues around the country.

I created a large collaborative art project called “The Together While Apart Project” that included the artwork of 18 other artists from around the United States. It originated during the lockdown phase of the pandemic, a time when we were all physically separated yet joined by a collective mission to create one amazing art installation to honor front-line workers, especially nurses. Upon its completion, this collaboration was recognized by the Smithsonian Institute, Channel Kindness (a nonprofit co-founded by Lady Gaga) and NOAH (National Organization of Arts in Medicine). After traveling around the Southeast to various hospitals for the past year on temporary exhibit, the artwork now hangs permanently in the main lobby at the University of Virginia Medical Center in Charlottesville, Virginia.

I wanted to do something philanthropic with this art project to honor and thank health care heroes for their dedication over the past two years. It was important to find a way to help support them and to ensure they are not being forgotten. Using art project as my platform, I partnered with the American Nurses Association and created a fundraiser. This campaign raises money for the ANA’s Well-Being Initiative programs, which support nurses struggling from burnout and post-traumatic stress disorder and who desperately need mental and physical wellness care. Fighting covid has taken a major toll on too many nurses. Some feel dehumanized and are not receiving the time off or the mental and physical resources needed to sustain them. Many are suffering in silence and have to choose between caring for themselves or their patients. They should not have to make this choice. Nurses are the lifeline in our communities and the backbone of the health care industry. When they suffer, we all suffer. Whether they work in hospitals, doctors’ offices, assisted living facilities, clinics or schools, every nurse has been negatively impacted in some way by the pandemic. They are being asked to do so much more than their jobs require in addition to experiencing greater health risks, less pay, and longer hours. Nurses under 35 and those of color are struggling in larger numbers.

The American Nurses Foundation offers many forms of wellness care at no charge. They rely heavily on donations to maintain the quality of their offerings as well as the ability to provide services to a growing number of nurses. I am an artist, not a professional fundraiser, and I have never raised money before. But I feel so strongly about ensuring that nurses receive the support and care they deserve, that I am willing to do whatever it takes to advocate and elevate these health care heroes.

The Together While Apart Project’s “Thank You Nurses Campaign” goal is $20,200, an amount chosen to reflect the numbers 2020, the year nurses became daily heroes. So far, I have raised over $15,500 through gifts in all amounts. For example, a $20 donation provides a nurse with a free one-hour call with a mental health specialist. That $20 alone makes a big difference and can change the life of one nurse for the better. The campaign has provided enough funding (year to date) to enable 940 nurses to receive free one-hour wellness calls with mental health specialists.

The online fundraiser can be found at https://givetonursing.networkforgood.com/projects/159204-together-while-apart-fundraiser.

— Deane Bowers, Seabrook Island, South Carolina

CEAPs, is it time to offer more #mentalhealth services? Nearly 1/2 of employers (w/ 200 workers) report a growing share of workers using mental health services. Yet 56% report they lack #behavioralhealth providers for employees to access to timely care. https://t.co/Vpkkwlq6C6

— EAPA (@EAPA) October 27, 2022

— Employee Assistance Professionals Association, Arlington, Virginia

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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His parents sued the Kool Smiles dental clinic in Yuma, Arizona, and its private equity investor, FFL Partners. They argued the procedures were done needlessly, in keeping with a corporate strategy to maximize profits by overtreating kids from lower-income families enrolled in Medicaid. Zion died after being diagnosed with “brain damage caused by a lack of oxygen,” according to the lawsuit.

Kool Smiles “overtreats, underperforms and overbills,” the family alleged in the suit, which was settled last year under confidential terms. FFL Partners and Kool Smiles had no comment but denied liability in court filings.

Private equity is rapidly moving to reshape health care in America, coming off a banner year in 2021, when the deep-pocketed firms plowed $206 billion into more than 1,400 health care acquisitions, according to industry tracker PitchBook.

Seeking quick returns, these investors are buying into eye care clinics, dental management chains, physician practices, hospices, pet care providers, and thousands of other companies that render medical care nearly from cradle to grave. Private equity-backed groups have even set up special “obstetric emergency departments” at some hospitals, which can charge expectant mothers hundreds of dollars extra for routine perinatal care.

As private equity extends its reach into health care, evidence is mounting that the penetration has led to higher prices and diminished quality of care, a KHN investigation has found. KHN found that companies owned or managed by private equity firms have agreed to pay fines of more than $500 million since 2014 to settle at least 34 lawsuits filed under the False Claims Act, a federal law that punishes false billing submissions to the federal government with fines. Most of the time, the private equity owners have avoided liability.

New research by the University of California-Berkeley has identified “hot spots” where private equity firms have quietly moved from having a small foothold to controlling more than two-thirds of the market for physician services such as anesthesiology and gastroenterology in 2021. And KHN found that in San Antonio, more than two dozen gastroenterology offices are controlled by a private equity-backed group that billed a patient $1,100 for her share of a colonoscopy charge — about three times what she paid in another state.

It’s not just prices that are drawing scrutiny.

Whistleblowers and injured patients are turning to the courts to press allegations of misconduct or other improper business dealings. The lawsuits allege that some private equity firms, or companies they invested in, have boosted the bottom line by violating federal false claims and anti-kickback laws or through other profit-boosting strategies that could harm patients.

“Their model is to deliver short-term financial goals and in order to do that you have to cut corners,” said Mary Inman, an attorney who represents whistleblowers.

Federal regulators, meanwhile, are almost blind to the incursion, since private equity typically acquires practices and hospitals below the regulatory radar. KHN found that more than 90% of private equity takeovers or investments fall below the $101 million threshold that triggers an antitrust review by the Federal Trade Commission and the U.S. Justice Department.

Spurring Growth

Private equity firms pool money from investors, ranging from wealthy people to college endowments and pension funds. They use that money to buy into businesses they hope to flip at a sizable profit, usually within three to seven years, by making them more efficient and lucrative.

Private equity has poured nearly $1 trillion into nearly 8,000 health care transactions during the past decade, according to PitchBook.

Fund managers who back the deals often say they have the expertise to reduce waste and turn around inefficient, or moribund, businesses, and they tout their role in helping to finance new drugs and technologies expected to benefit patients in years to come.

Critics see a far less rosy picture. They argue that private equity’s playbook, while it may work in some industries, is ill suited for health care, when people’s lives are on the line.

In the health care sphere, private equity has tended to find legal ways to bill more for medical services: trimming services that don’t turn a profit, cutting staff, or employing personnel with less training to perform skilled jobs — actions that may put patients at risk, critics say.

KHN, in a series of articles published this year, has examined a range of private equity forays into health care, from its marketing of America’s top-selling emergency contraception pill to buying up whole chains of ophthalmology and gastroenterology practices and investing in the booming hospice care industry and even funeral homes.

These deals happened on top of well-publicized takeovers of hospital emergency room staffing firms that led to outrageous “surprise” medical bills for some patients, as well as the buying up of entire rural hospital systems.

“Their only goal is to make outsize profits,” said Laura Olson, a political science professor at Lehigh University and a critic of the industry.

Hot Spots

When it comes to acquisitions, private equity firms have similar appetites, according to a KHN analysis of 600 deals by the 25 firms that PitchBook says have most frequently invested in health care.

Eighteen of the firms have dental companies listed in their portfolios, and 16 list centers that offer treatment of cataracts, eye surgery, or other vision care, KHN found.

Fourteen have bought stakes in animal hospitals or pet care clinics, a market in which rapid consolidation led to a recent antitrust action by the FTC. The agency reportedly also is investigating whether U.S. Anesthesia Partners, which operates anesthesia practices in nine states, has grown too dominant in some areas.

Private equity has flocked to companies that treat autism, drug addiction, and other behavioral health conditions. The firms have made inroads into ancillary services such as diagnostic and urine-testing and software for managing billing and other aspects of medical practice.

Private equity has done so much buying that it now dominates several specialized medical services, such as anesthesiology and gastroenterology, in a few metropolitan areas, according to new research made available to KHN by the Nicholas C. Petris Center at UC-Berkeley.

Although private equity plays a role in just 14% of gastroenterology practices nationwide, it controls nearly three-quarters of the market in at least five metropolitan areas across five states, including Texas and North Carolina, according to the Petris Center research.

Similarly, anesthesiology practices tied to private equity hold 12% of the market nationwide but have swallowed up more than two-thirds of it in parts of five states, including the Orlando, Florida, area, according to the data.

These expansions can lead to higher prices for patients, said Yashaswini Singh, a researcher at the Bloomberg School of Public Health at Johns Hopkins University.

In a study of 578 physician practices in dermatology, ophthalmology, and gastroenterology published in JAMA Health Forum in September, Singh and her team tied private equity takeovers to an average increase of $71 per medical claim filed and a 9% increase in lengthy, more costly, patient visits.

Singh said in an interview that private equity may develop protocols that bring patients back to see physicians more often than in the past, which can drive up costs, or order more lucrative medical services, whether needed or not, that boost profits.

“There are more questions than answers,” Singh said. “It really is a black hole.”

Jean Hemphill, a Philadelphia health care attorney, said that in some cases private equity has merely taken advantage of the realities of operating a modern medical practice amid growing administrative costs.

Physicians sometimes sell practices to private equity firms because they promise to take over things like billing, regulatory compliance, and scheduling — allowing doctors to focus on practicing medicine. (The physicians also might reap a big payout.)

“You can’t do it on a scale like Marcus Welby used to do it,” Hemphill said, referring to an early 1970s television drama about a kindly family doctor who made house calls. “That’s what leads to larger groups,” she said. “It is a more efficient way to do it.”

But Laura Alexander, a former vice president of policy at the nonprofit American Antitrust Institute, which collaborated on the Petris Center research, said she is concerned about private equity’s growing dominance in some markets.

“We’re still at the stage of understanding the scope of the problem,” Alexander said. “One thing is clear: Much more transparency and scrutiny of these deals is needed.”

‘Revenue Maximization’

Private equity firms often bring a “hands-on” approach to management, taking steps such as placing their representatives on a company’s board of directors and influencing the hiring and firing of key staffers.

“Private equity exercises immense control over the operations of health care companies it buys an interest in,” said Jeanne Markey, a Philadelphia whistleblower attorney.

Markey represented physician assistant Michelle O’Connor in a 2015 whistleblower lawsuit filed against National Spine and Pain Centers and its private equity owner, Sentinel Capital Partners.

In just a year under private equity guidance, National Spine’s patient load quadrupled as it grew into one of the nation’s largest pain management chains, treating more than 160,000 people in about 40 offices across five East Coast states, according to the suit.

O’Connor, who worked at two National Spine clinics in Virginia, said the mega-growth strategy sprang from a “corporate culture in which money trumps the provision of appropriate patient care,” according to the suit.

She cited a “revenue maximization” policy that mandated medical staffers see at least 25 patients a day, up from 16 to 18 before the takeover.

The pain clinics also overcharged Medicare by billing up to $1,100 for “unnecessary and often worthless” back braces and charging up to $1,800 each for urine drug tests that were “medically unnecessary and often worthless,” according to the suit.

In April 2019, National Spine paid the Justice Department $3.3 million to settle the whistleblower’s civil case without admitting wrongdoing.

Sentinel Capital Partners, which by that time had sold the pain management chain to another private equity firm, paid no part of National Spine’s settlement, court records show. Sentinel Capital Partners had no comment.

In another whistleblower case, a South Florida pharmacy owned by RLH Equity Partners raked in what the lawsuit called an “extraordinarily high” profit on more than $68 million in painkilling and scar creams billed to the military health insurance plan Tricare.

The suit alleges that the pharmacy paid illegal kickbacks to telemarketers who drove the business. One doctor admitted prescribing the creams to scores of patients he had never seen, examined, or even spoken to, according to the suit.

RLH, based in Los Angeles, disputed the Justice Department’s claims. In 2019, RLH and the pharmacy paid a total of $21 million to settle the case. Neither admitted liability. RLH managing director Michel Glouchevitch told KHN that his company cooperated with the investigation and that “the individuals responsible for any problems have been terminated.”

In many fraud cases, however, private equity investors walk away scot-free because the companies they own pay the fines. Eileen O’Grady, a researcher at the nonprofit Private Equity Stakeholder Project, said government should require “added scrutiny” of private equity companies whose holdings run afoul of the law.

“Nothing like that exists,” she said.

Questions About Quality

Whether private equity influences the quality of medical care is tough to discern.

Robert Homchick, a Seattle health care regulatory attorney, said private equity firms “vary tremendously” in how conscientiously they manage health care holdings, which makes generalizing about their performance difficult.

“Private equity has some bad actors, but so does the rest of the [health care] industry,” he said. “I think it’s wrong to paint them all with the same brush.”

But incipient research paints a disturbing picture, which took center stage earlier this year.

On the eve of President Joe Biden’s State of the Union speech in March, the White House released a statement that accused private equity of "buying up struggling nursing homes” and putting “profits before people.”

The covid-19 pandemic had highlighted the “tragic impact” of staffing cuts and other moneysaving tactics in nursing homes, the statement said.

More than 200,000 nursing home residents and staffers had died from covid in the previous two years, according to the White House, and research had linked private equity to inflated nursing costs and elevated patient death rates.

Some injured patients are turning to the courts in hopes of holding the firms accountable for what the patients view as lapses in care or policies that favor profits over patients.

Dozens of lawsuits link patient harm to the sale of Florida medical device maker Exactech to TPG Capital, a Texas private equity firm. TPG acquired the device company in February 2018 for about $737 million.

In August 2021, Exactech recalled its Optetrak knee replacement system, warning that a defect in packaging might cause the implant to loosen or fracture and cause “pain, bone loss or recurrent swelling.” In the lawsuits, more than three dozen patients accuse Exactech of covering up the defects for years, including, some suits say, when “full disclosure of the magnitude of the problem … might have negatively impacted” Exactech’s sale to TPG.

Linda White is suing Exactech and TPG, which she asserts is “directly involved” in the device company’s affairs.

White had Optetrak implants inserted into both her knees at a Galesburg, Illinois, hospital in June 2012. The right one failed and was replaced with a second Optetrak implant in July 2015, according to her lawsuit. That one also failed, and she had it removed and replaced with a different company’s device in January 2019.

The Exactech implant in White’s left knee had to be removed in May 2019, according to the suit, which is pending in Cook County Circuit Court in Illinois.

In a statement to KHN, Exactech said it conducted an “extensive investigation” when it received reports of “unexpected wear of our implants.”

Exactech said the problem dated to 2005 but was discovered only in July of last year. “Exactech disputes the allegations in these lawsuits and intends to vigorously defend itself,” the statement said. TPG declined to comment but has denied the allegations in court filings.

‘Invasive Procedures’

In the past, private equity business tactics have been linked to scandalously bad care at some dental clinics that treated children from low-income families.

In early 2008, a Washington, D.C., television station aired a shocking report about a local branch of the dental chain Small Smiles that included video of screaming children strapped to straightjacket-like “papoose boards” before being anesthetized to undergo needless operations like baby root canals.

Five years later, a U.S. Senate report cited the TV exposé in voicing alarm at the "corporate practice of dentistry in the Medicaid program.” The Senate report stressed that most dentists turned away kids enrolled in Medicaid because of low payments and posed the question: How could private equity make money providing that care when others could not?

“The answer is ‘volume,’” according to the report.

Small Smiles settled several whistleblower cases in 2010 by paying the government $24 million. At the time, it was providing “business management and administrative services” to 69 clinics nationwide, according to the Justice Department. It later declared bankruptcy.

But complaints that volume-driven dentistry mills have harmed disadvantaged children didn’t stop.

According to the 2018 lawsuit filed by his parents, Zion Gastelum was hooked up to an oxygen tank after questionable root canals and crowns “that was empty or not operating properly” and put under the watch of poorly trained staffers who didn’t recognize the blunder until it was too late.

Zion never regained consciousness and died four days later at Phoenix Children’s Hospital, the suit states. The cause of death was “undetermined,” according to the Maricopa County medical examiner’s office. An Arizona state dental board investigation later concluded that the toddler’s care fell below standards, according to the suit.

Less than a month after Zion’s death in December 2017, the dental management company Benevis LLC and its affiliated Kool Smiles clinics agreed to pay the Justice Department $24 million to settle False Claims Act lawsuits. The government alleged that the chain performed “medically unnecessary” dental services, including baby root canals, from January 2009 through December 2011.

In their lawsuit, Zion’s parents blamed his death on corporate billing policies that enforced “production quotas for invasive procedures such as root canals and crowns” and threatened to fire or discipline dental staff “for generating less than a set dollar amount per patient.”

Kool Smiles billed Medicaid $2,604 for Zion’s care, according to the suit. FFL Partners did not respond to requests for comment. In court filings, it denied liability, arguing it did not provide “any medical services that harmed the patient.”

Covering Tracks

Under a 1976 federal law called the Hart-Scott-Rodino Antitrust Improvements Act, deal-makers must report proposed mergers to the FTC and the Justice Department antitrust division for review. The intent is to block deals that stifle competition, which can lead to higher prices and lower-quality services.

But there’s a huge blind spot, which stymies government oversight of more than 90% of private equity investments in health care companies: The current threshold for reporting deals is $101 million.

KHN’s analysis of PitchBook data found that just 423 out of 7,839 private equity health care deals from 2012 through 2021 were known to have exceeded the current threshold.

In some deals, private equity takes a controlling interest in medical practices, and doctors work for the company. In other cases, notably in states whose laws prohibit corporate ownership of physician practices, the private equity firm handles a range of management duties.

Thomas Wollmann, a University of Chicago researcher, said antitrust authorities may not learn of consequential transactions “until long after they have been completed” and “it's very hard to break them up after the fact.”

In August, the FTC took aim at what it called “a growing trend toward consolidation” by veterinary medicine chains.

The FTC ordered JAB Consumer Partners, a private equity firm based in Luxembourg, to divest from some clinics in the San Francisco Bay and Austin, Texas, areas as part of a proposed $1.1 billion takeover of a rival.

The FTC said the deal would eliminate “head-to-head” competition, “increasing the likelihood that customers are forced to pay higher prices or experience a degradation in quality of the relevant services.”

Under the order, JAB must obtain FTC approval before buying veterinary clinics within 25 miles of the sites it owns in Texas and California.

The FTC would not say how much market consolidation is too much or whether it plans to step up scrutiny of health care mergers and acquisitions.

“Every case is fact-specific,” Betsy Lordan, an FTC spokesperson, told KHN.

Lordan, who has since left the agency, said regulators are considering updates to regulations governing mergers and are reviewing about 1,900 responses to the January 2022 request for public comment. At least 300 of the comments were from doctors or other health care workers.

Few industry observers expect the concerns to abate; they might even increase.

Investors are flush with “dry powder,” industry parlance for money waiting to stoke a deal.

The Healthcare Private Equity Association, which boasts about 100 investment companies as members, says the firms have $3 trillion in assets and are pursuing a vision for "building the future of healthcare.”

That kind of talk alarms Cornell University professor Rosemary Batt, a longtime critic of private equity. She predicts that investors chasing outsize profits will achieve their goals by “sucking the wealth” out of more and more health care providers.

“They are constantly looking for new financial tricks and strategies,” Batt said.

KHN’s Megan Kalata contributed to this article.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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