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KKR and Blackstone-owned Firms Have Spent Millions to Oppose a Ban on Surprise Medical Billing

September 18, 2019

A new report by the New York Times last week revealed that medical staffing firms owned by private equity managers KKR and Blackstone have poured millions into opposing legislation that would ban surprise medical billing.[i]

Through a shadowy lobbying group called Doctor Patient Unity, they have spent more than $28 million on ads and direct mail campaigns to voters in dozens of congressional districts over the last year.[ii]

As a result, Congressional Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) launched a bipartisan investigation into the role of private equity firms in surprise billing.[iii]

In letters to Blackstone, KKR and Welsh Carson, Anderson, & Stowe, the Congressmembers wrote that they are “concerned about the increasing role that private equity firms appear to be playing in physician staffing in our nation’s hospitals, and the potential impact these firms are having on our rising health care costs.”[iv]

Some states have already outlawed surprise medical billing, including California, New York, and Oregon. Their retirement systems remain heavily invested in the asset managers that own the companies that do it.[v]

Media coverage and academic research:

Surprise Medical Billing

As hospitals have increasingly outsourced physician staffing services, surprise medical billing has arisen as a critical concern for patients. Because physicians hired through third party staffing services are often out of network, patients may unintentionally receive services out-of-network at a hospital within network.[vi]

When people with urgent medical concerns go to the ER or another specialized service where their physician is outsourced, they can get stuck with unexpectedly high medical bills that would otherwise be covered by their insurance.[vii]

Two of the largest physician staffing companies are Blackstone-backed Team Health and KKR-backed Envision. Together, they make up about 30% of the market for physician staffing services.[viii]

Academic analyses have found evidence of the firms’ excessive use medical billing practices.

A 2017 Yale study analyzed insurance company filings and found that when KKR’s Envision entered a market, out-of-network billing rates increased between 81 and 90 percentage points. Blackstone’s Team Health triggered a rate increase of 33 percentage points.[ix]

A September 2019 report from the Institute for New Economic Thinking details the asset managers’ relationships to the staffing companies and analyzes the implications of their business models for patient care.[x]

Team Health was acquired by Blackstone Capital Partners VII in a public-private LBO in 2017.[xi]

Envision was acquired by KKR Americas Fund XII in a public-private LBO in October 2018.[xii]

[i]“Mystery Solved: Private-Equity-Backed Firms Are Behind Ad Blitz on ‘Surprise Billing’,” NY Times, Sept 13, 2019.

[ii]“Mystery Solved: Private-Equity-Backed Firms Are Behind Ad Blitz on ‘Surprise Billing’,” NY Times, Sept 13, 2019.

[iii]“Pallone and Walden Launch Bipartisan Investigation into Private Equity Firms’ Role in Surprise Billing Practices,” Media release, Sept 16, 2019.

[iv]See letters linked at the end of the Pallone-Walden press release.

[v]“How Private Equity Keeps States Invested in Medical Billing Practices They’ve Banned,” Bloomberg, Jul 3, 2018.

[vi]“Private Equity Tries to Protect Another Profit Center,” The American Prospect, Sept 9, 2019.

[vii]“Private Equity Tries to Protect Another Profit Center,” The American Prospect, Sept 9, 2019.

[viii]“Investors’ Deep-Pocket Push To Defend Surprise Medical Bills,” Kaiser Health News, September 11, 2019.


[x]“Private Equity and Surprise Medical Billing,” Institute for New Economic Thinking, Sept 4, 2019.

[xi]Pitchbook, accessed September 18, 2019.

[xii]“Envision Healthcare to be Acquired by KKR for $46.00 Per Share in All-Cash Transaction,” KKR press releasem June 11, 2018.

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