Where Envision Healthcare stands today

Envision Healthcare, a network of more than 25,000 clinicians across the U.S., provides care for around 30 million patients per year. It's one of the largest healthcare networks in the U.S. and backed by private equity firm KKR.

It's also embroiled in controversy and was near bankruptcy last year. Moody's flagged the Nashville, Tenn.-based network of ASCs and physician staffing services as being on the brink of bankruptcy in September and downgraded its credit rating to "C."

The downgrade came weeks after Bloomberg reported Envision had a $26 million loss for second quarter EBITDA in 2022, down from $221 million gains a year prior.

Moody's said Envision's capital structure was "unsustainable" in its report and the probability of either bankruptcy or a major restructuring was high; recovery rates for Envision's debt would be low, according to the report. Nearly five months later, Envision hasn't revealed any leadership shake-ups or new strategic directions.

Jim Rechtin has been CEO of the company since joining in 2020, after serving as president of OptumCare and senior vice president of corporate strategy of DaVita Medical Group and president of DaVita Medical Group's California market. Henry Howe also joined the company in 2020 as executive vice president of enterprise strategy and became CFO a year later.

Envision's profitability had been trending downward ahead of the credit downgrade, and the organization went out-of-network with UnitedHealthcare in 2021, and the organizations subsequently traded lawsuits. The No Surprises Act legislation that went into effect last year further challenged the company's business model.

KKR also had a tough 2022. The private equity firm reported $5.7 billion in total revenue, down from $16.2 billion the year prior. The company reported $910 million in losses for 2022, compared to $4.5 billion gains in 2021.

Envision was in the spotlight again in December, when the American Academy of Emergency Medicine Physician Group sued the company, alleging it violated corporate practice of medicine laws in California. The lawsuit accuses Envion of using shell business structures to keep ownership of emergency room staffing groups despite California's laws against the corporate practice of medicine.

In addition to physician services, Envision also has a large ambulatory surgery center business, AmSurg, which has 250 ASCs in 34 states. The surgery centers are primarily focused on gastroenterology and ophthalmology procedures, and as of last year the company had more than 2,000 physician partners in its network.

Envision has more than 650 facilities in its network and supports more than 30 million patient encounters, according to its 2021 impact report, and is looking ahead. In January, the company released a "roadmap" to healthier communities.

"Healthcare is in a reset. The industry has minimized clinicians' roles in driving healthcare improvement, and as a result, hospitals and health systems nationwide face challenges they never have before. Envision Physician Services is helping hospitals meet these challenges by putting clinicians back in the driver's seat," according to the organization.

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