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New PESP report explores Envision Healthcare’s risk for bankruptcy

New PESP report explores how Envision Healthcare has transformed from a profitable company to one at high risk for bankruptcy while under KKR’s ownership

Envision Healthcare: A Private Equity Case Study

In light of up Envision Healthcare’s (owned by KKR) starring role in America’s surprise medical billing problem, as well as recent headlines around its potential bankruptcy and its ongoing feud with UnitedHealthcare, the Private Equity Stakeholder Project has released a new report on Envision Healthcare as a case study to demonstrate some of the pitfalls of private equity investment in healthcare.

The report details how under Kohlberg Kravis Roberts’ (KKR’s) ownership, Envision Healthcare, a physician staffing and management group, has transformed from a profitable company—and a desirable acquisition target purchased in one of the largest leveraged buyouts since the financial crisis—to a financially distressed one at high risk for bankruptcy and reputational fallout from its business practices.

At the time of KKR’s acquisition, Envision was already facing mounting scrutiny for its role in surprise medical billing. This billing practice occurs when a patient seeks care at a supposedly in-network provider but is treated by out-of-network physicians, resulting in unexpected and sometimes exorbitant medical bills.

Despite the negative attention and scrutiny around surprise medical billing, KKR acquired Envision for $9.9 billion dollars,[1] using about $7 billion in debt to do so—approximately 70.7% of the deal value. This debt was not taken on by KKR, but rather loaded onto Envision.[2]

As cited in the report, Eileen Appelbaum and Rosemary Batt, writing for TheAmerican Prospect, explain that “loading patients who sought emergency care with often unpayable medical debt was KKR’s secret sauce. It was as simple as that.”[3]

Yet KKR’s “secret sauce” became a liability as policymakers began working to protect consumers from surprise medical bills. Despite Envision’s dark money campaign against federal legislative attempts to regulate surprise billing,

Envision would become a major liability for the medical group as the regulatory landscape around surprise billing began to shift. Additionally, the pandemic disrupted operations-as-usual for both the emergency physician staffing arm of Envision’s business, as well as its ambulatory surgery center staffing and management business.

Envision Healthcare’s extractive business model that can saddle medical debt onto patients has come full circle. The healthcare company now faces a high risk of major restructuring or bankruptcy itself, saddled with debt by its private equity owner and amidst the regulatory challenges posed by the No Surprises Act.16

Unlike the ordinary Americans who may end up in life-changing bankruptcies because of their medical debt, the report shows how Envision’s private equity investors will likely come out relatively unscathed and may, in fact, come out even better than before.[6] Envision’s story should not be read as an unfortunate anomaly in our healthcare system and economy but rather a natural consequence of the stranglehold that private equity and other special interests have on our healthcare and our political system.

You can download the full report HERE.


[1] Stinnet, Joel. “Envision Healthcare Completes $9.9 Billion Sale to KKR.” Nashville Business Journal. Accessed October 13, 2022. https://www.bizjournals.com/nashville/news/2018/10/11/completion-of-9-9b-deal-leaves-nashville-with-one.html.

[2] Ronalds-Hannon, Eliza, and Davide Scigliuzzo. “The Debt Deal That Shows How Ugly Things Are Getting for Lenders.” Bloomberg.Com, October 5, 2022. https://www.bloomberg.com/news/articles/2022-10-05/kkr-s-envision-deal-shows-how-ugly-creditor-battles-are-getting.

[3] Appelbaum, Eileen, and Rosemary Batt. “Envision Healthcare Hits the Skids.” The American Prospect, March 14, 2022. https://prospect.org/api/content/dee32e40-a176-11ec-bb52-12f1225286c6/.

[4] Sanger-Katz, Margot, Julie Creswell, and Reed Abelson. “Mystery Solved: Private-Equity-Backed Firms Are Behind Ad Blitz on ‘Surprise Billing.’” The New York Times, September 13, 2019, sec. The Upshot. https://www.nytimes.com/2019/09/13/upshot/surprise-billing-laws-ad-spending-doctor-patient-unity.html.

[5] American Medical Association. “Implementation of the No Surprises Act.” Accessed October 26, 2022. https://www.ama-assn.org/delivering-care/patient-support-advocacy/implementation-no-surprises-act.

[6] Appelbaum, Eileen, and Rosemary Batt. “Envision Healthcare Hits the Skids.” The American Prospect, March 14, 2022. https://prospect.org/api/content/dee32e40-a176-11ec-bb52-12f1225286c6/; Ronalds-Hannon, Eliza, and Davide Scigliuzzo. “The Debt Deal That Shows How Ugly Things Are Getting for Lenders.” Bloomberg.Com, October 5, 2022. https://www.bloomberg.com/news/articles/2022-10-05/kkr-s-envision-deal-shows-how-ugly-creditor-battles-are-getting.

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