Why some hospitals are understaffing physicians

Private equity investors are taking over more medical staffing companies, leading to physician cuts being made in emergency rooms to save money and increase profits, NPR reported Feb. 11.

More and more third-party staffing companies are deploying this cost-saving strategy: reduce physician labor and replace them with practitioners, such as nurse practitioners and physician assistants, who can perform many of the same tasks for less than half the pay.

In a statement to Kaiser Health News, American Physician Partners — one staffing company who employed this strategy — said this is a way to ensure all ERs remain fully staffed, calling it a "blended model" that allows doctors, nurse practitioners and physician assistants "to provide care to their fullest potential."

Critics of the strategy fear the quest to save money results in patients being left with lower quality of care and higher medical bills. 

"It's not just a simple question of if we can substitute physicians with nurse practitioners or not," Yiqun Chen, PhD, associate professor of economics at the University of Illinois Chicago, said in the report. "It depends on how we use them. If we just use them as independent providers, especially ... for relatively complicated patients, it doesn't seem to be a very good use."

Private equity investment and the use of midlevel practitioners rose in lockstep in the ER, Cameron Gettel, MD, assistant professor of emergency medicine at Yale, said, and in the absence of game-changing research, the pattern will likely continue.

Private equity companies pool money for wealthy investors to buy and flip business in three to seven years. Nearly $1 trillion in private equity funds has gone into almost 8,000 healthcare transactions over the past decade, according to industry tracker PitchBook, including buying into medical staffing companies. Three firms dominate the industry: TeamHealth and Envision Healthcare, both of which were bought by private equity firms, and American Physician Partners, which is 50 percent owned by a private equity firm.

Critics worry the pressure to make big profits will influence life-or-death decisions that were once left solely to medical professionals.

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