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Federal investigation into private equity hospital staffing, patient care in Southern Colorado

COLORADO SPRINGS, Colo. (KRDO) - The U.S. Senate Committee of Homeland Security and Governmental Affairs is investigating private equity-owned hospital staffing companies after receiving dozens of complaints from physicians across the country claiming they put their bottom line above patient care.

On April 1, U.S. Senator Gary Peters (D-MI) sent multiple letters to private equity-owned hospitals and staffing companies, asking for information about business operations, staffing decisions, and patient care and safety at several emergency departments across the country, including CommonSpirit hospitals in Colorado Springs and Canon City.

According to that letter, private equity-owned or controlled physician staffing groups operate nearly one-third of all emergency departments across the country. One of those groups, US Acute Care Solutions (USACS), manages the emergency department staffing for CommonSpirit hospitals in Southern Colorado.

The committee interviewed more than 40 emergency medicine physicians across the country, who “raised significant concerns about patient care at private equity-owned physician staffing companies and private equity-owned hospitals, as well as their ability to provide care in the event of a major emergency, such as a mass casualty event, terrorist attack or future pandemic.”

“While private equity firms that are publicly traded have an obligation to their investors, physicians have a duty to serve the best interest of their patients, and these two duties are often in conflict,” the committee's letter said.

Jonathan Jones, a physician and the president of the American Academy of Emergency Medicine, said the private equity model creates a barrier between the relationship of patients and physicians.

“The driving factor has to be what's best for that patient,” he said. “We take an oath to do that. Corporations don't. They take an oath to protect their shareholders. That is actually their ethical responsibility, not to the patient. They look at metrics and numbers and generally the bottom line, ‘How do we make this contract that we purchase, that we're investing in, and how do we make it profitable as opposed to how do we serve the patients best?’”

This topic has grabbed multiple federal lawmakers’ attention. The U.S. Senate Subcommittee on Health, Education, Labor, and Pensions held a hearing last week about private equity-owned hospitals and staffing companies and their impact on patient care.

“What we see is high attrition rates across the board,” said Hannah Drummond, an Ashville, Tennessee, nurse who works in a hospital owned by a private equity firm and testified during the hearing. “We see nurses leave after just a year in the profession because they are being pushed out of their training faster and then they are being put in charge of training other new nurses when they don’t even have a year of experience yet.”

USACS is financed by private equity firm Apollo Global Management. Peters’ letter to the two groups claims that inadequate staffing has forced physicians to see 20 patients at once and nurse practitioners and physician assistants are left to diagnose and treat patients with acute care.

Jones said he saw about eight to 10 patients at a time before his hospital was bought by a private equity firm. After the purchase, he said he saw about 20. This is also a problem Ellana Stinson, an emergency medicine physician, experienced at multiple private equity-owned hospitals on the east coast.

“Increasingly daunting metrics required by physicians and other staff to meet were unattainable and unsafe in many instances but very much expected,” Stinson said during last week’s hearing. “Practicing medicine in private equity-led places is no longer about patient safety or quality but about making medical decisions and judgments due to corporate decisions made with profit motives at the expense of patients.”

The U.S. Senate Committee of Homeland Security and Governmental Affairs is looking into this because they are concerned these hospitals associated with private equity firms won’t be able to handle an influx of patients in a mass casualty event.

“Apollo and USACS business decisions may compromise the ability of emergency departments in the Pikes Peak Region to provide quality patient care and respond to a mass casualty event, pandemic, or other event that would require the treatment of high volumes of patients,” the committee’s letter said.

USACS told KRDO13 Investigates its physicians in Colorado Springs cared for many of the victims of the Club Q shooting.

“All hospitals and emergency departments have mass casualty plans, and the hospitals in this area are staffed and prepared for unexpected events. As emergency medicine physicians, we take our obligations to serve the community seriously. In the event any number of people need our help, we are ready to provide it.”

KRDO13 Investigates also reached out to CommonSpirit, which is contracted with USACS, but we are still waiting for a response.

There are still many unanswered questions as Peters said “USACS’s restrictive contracting practices, such as non-interference clauses, may impede physicians’ ability to raise patient safety concerns without fear of retaliation.”

He’s requesting both Apollo and USACS provide their contractual agreements, including the terms of investment, and communications about the emergency departments in the Pikes Peak Region, including protocols on staffing and medical coding.

“(Emergency rooms) are exacerbated by the private equity business model, which hinges on highly leveraged debt, little equity, and the need to obtain outsized returns within a limited time,” the committee’s letter said.

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Quinn Ritzdorf

Quinn is a reporter with the 13 Investigates team. Learn more about him here.


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