Radiology provider Envision Healthcare mulling bankruptcy as COVID-19 dries up business
Investor-owned Envision Healthcare is considering declaring bankruptcy as it grapples with massive amounts of debt and no elective medical procedures to generate revenue.
The Nashville physician services firm has already hired restructuring advisers and is holding back pay from doctors, Bloomberg reported, citing unnamed sources. Envision is reportedly struggling to manage its $7 billion debt load, with bondholders loathe to change terms and help pare down its IOUs.
The news comes after Moody’s previously downgraded Envision to “negative” status amid its current struggles.
“The ongoing spread of the coronavirus will make it increasingly challenging for Envision to manage its labor costs, sustain consistent revenue cycle management, and maintain subsidies that it receives from hospitals,” the investor service noted earlier this month. It’s certainly not alone, as Moody’s has reportedly downgraded a record-high number of companies during the pandemic.
Envision is one of the largest multispecialty, facility-based physician groups in the U.S., leading a team of more than 900 radiologists alongside numerous other provider types. Private equity firm KKR finalized its purchase of the firm last year for nearly $10 billion.
As patients have sought to stay home and postpone elective procedures, Envision has suffered. In two weeks alone, the physician firm’s business decreased by upward of 75% at its 168 ambulatory surgery centers, Bloomberg noted. Private equity-owned firms like Envision have reportedly been shut out of small business bailouts in the first round.
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Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.