What private equity neglected to consider as it gobbled up physicians groups

The main threat to healthcare providers’ business isn’t legislation currently in Congress to clamp down on surprise billing.

The bigger threat is simply this: Americans can’t afford to pay healthcare providers for services rendered. Take the case of emergency physicians groups, which have seen dramatic investment by private equity firms in recent years.

Back when these groups could send the overwhelming majority of its bills for service to insurance companies, the declining fortunes of low- and middle-income Americans wasn’t much of a problem. It didn’t matter for the groups - or for the private equity firms which had invested in them - that patients couldn’t afford the bills. Insurance companies were paying them.

But all that has changed due to one big - and apparently unforeseen - development: the sharp rise in high deductible health plans.

According to a now infamous 2018 report from the Federal Reserve on Americans’ financial wellbeing, fully 40 percent of Americans don’t have $400 in savings to cover an emergency. Meanwhile, 47 percent of Americans enrolled in commercial insurance now have a high deductible insurance plan. And the average visit to the ER now costs $1,389, according to the Health Care Cost Institute.