Radiology provider Envision Healthcare’s bankruptcy could serve as a warning for further impending trouble in the physician services industry, one MD editorialist contends.
The Nashville-based multispecialty group officially filed for chapter 11 on Monday, May 15, looking to restructure its $7.7 billion in debts. In an opinion piece for MedPage Today, N. Adam Brown, MD, MBA, expounded on what private equity-backed Envision's demise means for radiology and other specialties.
“Bankruptcy in healthcare is not new, and it accelerated during and after the COVID pandemic due to inflation costs and staffing challenges. But Envision's bankruptcy still could have significant ripple effects on the industry. And it is different,” wrote Brown, a practicing emergency physician, founder of consultancy ABIG Health, and professor at UNC’s Kenan-Flagler Business School. “Of the 46 healthcare bankruptcies filled in 2022, only five had liabilities over $500 million. Envision's financial collapse would likely be more significant—and it could be one of the first canary in the provider services and hospital-based coal mine.”
In backing his argument, Brown cited the growing power of vertically integrated conglomerates such as UnitedHealth Group, among other factors. The company includes America’s largest health insurance plan, alongside the largest provider network through Optum (60,000-plus physicians), and its accompanying pharmacy benefits management business line. A May 11 analysis from S&P Global highlighted health plan UnitedHealthcare’s A+ credit rating, amassing more than $297 billion in revenue last year with adjusted earnings on that tally of 7.1% (or $21 billion).
“While payers profit, around 50% of hospitals finished 2022 in the red. Hospital closures mean less patient access, which often leads to worse outcomes for patients,” Brown wrote. “If Envision could not make it in this environment, how can smaller providers?”
He encouraged radiologists and other providers to educate themselves about these trends and develop the business knowledge to respond. “To my fellow physicians I say: Understand the issues, and the financial incentives, and advocate for patients and yourselves.”
Read the entire editorial from MedPage—including a lively comment section with nearly 20 responses—below.
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.