KKR’s Envision Weighs Handing Control to Creditors in a Bankruptcy

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They don’t have to. If anything the bank collapse is a reason not to.
Lots of banks fail over the years. There’s nothing wrong with getting unhealthy banks out of the game. The Fed is stuck. They can’t go lower. They could stay the same but will likely have to go higher. Rates will be elevated much longer than they admit. There will be pain no matter what the Fed says.

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Our CMG was asking us to stop asking for bonuses for shifts since that’s what caused Envison’s downfall
 
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Our CMG was aking us to sto asking for bonuses for shifts since that’s what caused Envison’s downfall
“Hey guys, quit asking for money for working because it goes against our business plan.”

Your CMG is toast.
 
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Our CMG was aking us to sto asking for bonuses for shifts since that’s what caused Envison’s downfall

Hospital w2 here. Picking up shift for "omggg we need helppppppp please considerrr" less than 24 hours in advance gets me $500 bonus before taxes.

Nah I'll stay home and lift and spare myself the toxicity.
 
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Hospital w2 here. Picking up shift for "omggg we need helppppppp please considerrr" less than 24 hours in advance gets me $500 bonus before taxes.

Nah I'll stay home and lift and spare myself the toxicity.

500?

"Those are rookie numbers; you gotta pump up those numbers."
 
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Our CMG was aking us to sto asking for bonuses for shifts since that’s what caused Envison’s downfall
It amazes me that no matter thoroughly leadership screws the pooch, they instinctively blame the laborers for the ensuing disaster.

"I know there's been a lot of talk about not moving into the online space quickly enough, and that servicing the debt from the leveraged buyout making it mathematically impossible for us to turn a profit. But let's look at the real reason we're closing.... your refusal to come in early on your day off to help stock just because you're grandma was insensitive enough to die during the Christmas season, Timmy." -some Toys'R'Us exec
 
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Our CMG was asking us to stop asking for bonuses for shifts since that’s what caused Envison’s downfall
Yeah when volume goes down, they sure won't hesitate to cut hours and send docs home.
 
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Yeah when volume goes down, they sure won't hesitate to cut hours and send docs home.

I remember team wealth tried to pull this **** on me when I traveled for them. Nope, I'm literally here to work, nice try.
 
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Word on the street is that envision had mandatory meeting today informing everyone on the formal bankruptcy filing
 
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Related Reddit thread:

Does it change a lot? I hope so, but I don't think so.

Am I still going to open a literal bottle of champagne when I get home over this? (It helps that it's my birthday too. So I'll tell the wife it's for that) absolutely ****ing yes I will
 
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Does it change a lot? I hope so, but I don't think so.

Am I still going to open a literal bottle of champagne when I get home over this? (It helps that it's my birthday too. So I'll tell the wife it's for that) absolutely ****ing yes I will

It might not change much in the short term

in the long term hospital system will become more hesitant to sign with large cmgs and favor SDGs
 
It might not change much in the short term

in the long term hospital system will become more hesitant to sign with large cmgs and favor SDGs

Alternatively..... TH, SCP, ApolloMD, Sound, USucks, and hundreds of locums companies both within and external to them. All of these entities are just salivating at gaining a foothold
 
Alternatively..... TH, SCP, ApolloMD, Sound, USucks, and hundreds of locums companies both within and external to them. All of these entities are just salivating at gaining a foothold

True

However they’re all in a similar boat as Envision, just not out as far in the deep sea. Yet.

Feds raised rates again by 25 basis points yesterday

The long game with SDGs has to be in play

2 years hopefully will see seismic shifts
 
Alternatively..... TH, SCP, ApolloMD, Sound, USucks, and hundreds of locums companies both within and external to them. All of these entities are just salivating at gaining a foothold
You'd be surprised. Envision got here for a reason. They have a ton of contracts that aren't profitable. I don't foresee companies wanting to take on more debt to gain non-profitable contracts.
 
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You'd be surprised. Envision got here for a reason. They have a ton of contracts that aren't profitable. I don't foresee companies wanting to take on more debt to gain non-profitable contracts.
It depends. There's clearly a market for bundling a lot of bad investments from an otherwise solid market sector together to give the appearance of respectability. That seems to be APPs current strategy. Of course no one's telling the docs they're joining on to be part of what boils down to a "pump and dump" scheme.
 
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What makes a single site unprofitable, however? To me it's simple; the hospital hasn't offered an adequate subsidy for the service of being able to offer a 24/7 Emergency Department.

By bundling these contracts and offering to staff these departments at a loss, they allow these hospitals to think that they offer enough volume to support an ED. By cutting bait with these contracts, an alternative SDG can come in and explain what terms it would take to staff their ED, or the hospital can try to pay for it themselves by employing their physicians, or they can close the ED.
 
What makes a single site unprofitable, however? To me it's simple; the hospital hasn't offered an adequate subsidy for the service of being able to offer a 24/7 Emergency Department.

By bundling these contracts and offering to staff these departments at a loss, they allow these hospitals to think that they offer enough volume to support an ED. By cutting bait with these contracts, an alternative SDG can come in and explain what terms it would take to staff their ED, or the hospital can try to pay for it themselves by employing their physicians, or they can close the ED.
I don’t think it’s quite that simple. Profitability depends on operations, staffing, charting, billing, among other things. Hospital subsidies matter but it’s a small piece of the pie except in areas with exceptionally poor payer mix.
 
What makes a single site unprofitable, however? To me it's simple; the hospital hasn't offered an adequate subsidy for the service of being able to offer a 24/7 Emergency Department.

By bundling these contracts and offering to staff these departments at a loss, they allow these hospitals to think that they offer enough volume to support an ED. By cutting bait with these contracts, an alternative SDG can come in and explain what terms it would take to staff their ED, or the hospital can try to pay for it themselves by employing their physicians, or they can close the ED.
Good luck ever having knuckle dragging admins ever think the ED is anything more than a money pit. They’re salivating every time a new residency opens.
 
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I think it would be very difficult to get a hospital to do a subsidy. The two most difficult part with a SDG is you only bill for the professional fees and billing can be drawn out/complex. If you do start a SDG, partners need to be aware that they may take a pay haircut some months which would be difficult for many to handle.

I personally would never start a SDG b/c there just is not enough meat on the bone and the income ceiling is relatively capped. PLUS, you will always be a target of a takeover at the whim of the CEO.
 
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I guess this is where my geographic bias showing, since I am surrounded by small hospitals with a poor payor mix and it's standard for hospitals to offer EM group subsidies. Even the CMGs get subsidies from these hospitals.

Operations, staffing, etc. are necessary but generally static. You know the costs of your business should be relatively fixed. Staff the ER, pay for billing/coding services, etc. ED volume tends to be fairly predictable (outside of acts of God, like COVID) and the payor mix tends to run static for a given location (I.e. you don't just suddenly have a few months where you get all uninsured patients). So you run your business pro-forma with all this in place and you figure out what kind of subsidy you need from the hospital to get to a staffing cost that gets you warm bodies in the door, assuming the volume/payor mix itself cannot support minimal staffing. The subsidy may be a small piece of the pie but it's the least static portion of it.
 
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I guess this is where my geographic bias showing, since I am surrounded by small hospitals with a poor payor mix and it's standard for hospitals to offer EM group subsidies. Even the CMGs get subsidies from these hospitals.

Operations, staffing, etc. are necessary but generally static. You know the costs of your business should be relatively fixed. Staff the ER, pay for billing/coding services, etc. ED volume tends to be fairly predictable (outside of acts of God, like COVID) and the payor mix tends to run static for a given location (I.e. you don't just suddenly have a few months where you get all uninsured patients). So you run your business pro-forma with all this in place and you figure out what kind of subsidy you need from the hospital to get to a staffing cost that gets you warm bodies in the door, assuming the volume/payor mix itself cannot support minimal staffing. The subsidy may be a small piece of the pie but it's the least static portion of it.
Hospitals dont want to pay a subsidy but be clear this envision bankruptcy is about their ED, hospitalist and radiology business. They already split off amsurg which is their ASC business.

If Envision cant run a site profitably it is unlikely another CMG can either. It is much more likely in the NSA world that revenue per insurer will normalize and level. In the old system everyone agreed that on par the CMGs had better contracted rates, hammered the OON patients and insurers and generated more money. That being said BCBS, Cigna and UHC have said that they arent playing anymore. BCBS kicked out TeamHealth from being in network. its a new landscape we are all trying to sort out.
 
Of the folks above who are saying "it's SDG time!", it takes a ton of financing to start up a group – something that isn't cheap anymore. Days in accounts receivable is a huge issue with obstructive payors.

I suspect large hospitals aren't going to be interested in rolling the dice with a new startup group in this environment, more likely whatever CMG makes the best pitch for seamless stability. Small hospitals may offer different opportunities.
 
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Of the folks above who are saying "it's SDG time!", it takes a ton of financing to start up a group – something that isn't cheap anymore. Days in accounts receivable is a huge issue with obstructive payors.

I suspect large hospitals aren't going to be interested in rolling the dice with a new startup group in this environment, more likely whatever CMG makes the best pitch for seamless stability. Small hospitals may offer different opportunities.
Billing companies will front you the dough. But yes it would be hard to do for an SDG. In some places other SDGs have scooped up the contracts. I know this happened in california.
 
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Die a hero or live long enough to become the villain.

Then once the sdg becomes profitable the founders of the SDG sale out to usucks/TH

And the cycle of sucking the life out of our speciality continues
 
Word on the street is that envision had mandatory meeting today informing everyone on the formal bankruptcy filing

Is Envision has one of those ponzi schemes where you "buy shares" for x and then 5-10 years later you get to sell those same shares for "more than x?"
If so that's going out the door
 
I thought these CMGs could just lower their doc pay as much as they feasibly could do to become profitable. Why isn't that the case here?
 
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I thought these CMGs could just lower their doc pay as much as they feasibly could do to become profitable. Why isn't that the case here?
Envision can't service its (leveraged buyout acquired) debt and pay its people. Take away either COVID/insurer pushback on billing or the debt from the buyout and Envision doesn't make as much profit as expected but is still viable. Both together spells doom.

You could maybe push through a 10-20% haircut (love the flippancy of that term) on the docs and still keep them given the uncertainty of the labor market in EM. A lot of companies did that during peak COVID slowdown. When you're asking docs to take a 50% hike to service company debt, they're going to bounce.
 
Envision can't service its (leveraged buyout acquired) debt and pay its people. Take away either COVID/insurer pushback on billing or the debt from the buyout and Envision doesn't make as much profit as expected but is still viable. Both together spells doom.

You could maybe push through a 10-20% haircut (love the flippancy of that term) on the docs and still keep them given the uncertainty of the labor market in EM. A lot of companies did that during peak COVID slowdown. When you're asking docs to take a 50% hike to service company debt, they're going to bounce.

I work for Envision. We actually got a raise earlier this year.
 
KKK and Envisions knew what was going to happen. They all got their $$$$, hoped to increase numbers to put it back on the market to take a final bite of the apple. Physician services is a low margin, inelastic product. Add a heavy debt load and unless everything lines up, it doesn't matter. But regardless, they knew it and already took their money out.

Nothing new, happens all the time in the equity market.
 
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I work for Envision. We actually got a raise earlier this year.
Wonder if that means you were paid below market for a while? Locally its been pay cuts but i know another group out west who got a pay raise. Of course they got nothing for 5 years. So in a work of 9% inflation, and the CPI-U up 14% since 2019 getting a less than 5% pay raise isnt even keeping up with inflation.

This upcoming year will be my first $/hr pay cut in my career other than a job change. The NSA is taking its piece of flesh as insurers are brazen in their actions.
 
Wonder if that means you were paid below market for a while? Locally its been pay cuts but i know another group out west who got a pay raise. Of course they got nothing for 5 years. So in a work of 9% inflation, and the CPI-U up 14% since 2019 getting a less than 5% pay raise isnt even keeping up with inflation.

This upcoming year will be my first $/hr pay cut in my career other than a job change. The NSA is taking its piece of flesh as insurers are brazen in their actions.

Talk around the campfire was that we were indeed slightly underpaid compared with other groups in our metro. This also was the first pay raise since Envision took over the contracts in ~2018. This was out west, too. Maybe you know my group.
 
Talk around the campfire was that we were indeed slightly underpaid compared with other groups in our metro. This also was the first pay raise since Envision took over the contracts in ~2018. This was out west, too. Maybe you know my group.
Maybe but i know their MO more.

WSJ article saying envision may file their chapter 11 this weekend. Yipee.
 
Maybe but i know their MO more.

WSJ article saying envision may file their chapter 11 this weekend. Yipee.

Some of the juicy bits:

“Much of Envision’s debt will be swapped for shares in the reorganized company, the people said.”

“Other private-equity backed physician-staffing companies, which help hospitals staff emergency rooms and other departments, have also suffered. Bonds due in 2025 for TeamHealth, which Blackstone bought for $3 billion in 2017, are trading at 51 cents on the dollar, according to MarketAxess.”

And this my favorite:

“That, along with broader wage inflation, have led labor costs, particularly for anesthesiolo-gists, to skyrocket.”

Nice that other specialties seem to be just fine keeping wages matched to inflation while we continue to see only downward wage pressure…
 
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“That, along with broader wage inflation, have led labor costs, particularly for anesthesiolo-gists, to skyrocket.”
High-revenue ortho/cards/neurosurgeons can't operate without an anesthesiologist, but the caveman meatgrinder "life savers" are just pushin' pills and admittin' slugs for nursing home placement.
 
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High-revenue ortho/cards/neurosurgeons can't operate without an anesthesiologist, but the caveman meatgrinder "life savers" are just pushin' pills and admittin' slugs for nursing home placement.
PLus Noctors plus non EM docs working as EM replacements. ACEP finally decided to join the rest of the house of medicine and tell folks we aren’t paid enough..
 
And this my favorite:

“That, along with broader wage inflation, have led labor costs, particularly for anesthesiolo-gists, to skyrocket.”

Nice that other specialties seem to be just fine keeping wages matched to inflation while we continue to see only downward wage pressure…
That's because the anesthesiologists have been willing to walk if they didn't get paid better. The hospital system I work in has contracts with 2 different anesthesia groups and both of them have negotiated better contracts because they also both said they'd just walk away from them if they didn't get what they wanted.
 
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So it looks like this is actually happening according to the wsj.

What does an envision bankruptcy mean for the docs working there? Lost jobs? New CMG contract? 401k match disappears? New physician contracts with envision 2?

Wondering how this plays out for the docs.
 
It's chapter 11. As far as I know, it allows Envision to operate business as usual while restructuring their debt. Don't think much will change.
 
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Yawn.

The goal of Chapter 11 is to help businesses emerge from bankruptcy with a viable plan for the future. This may involve reducing debt, renegotiating contracts, selling assets, or other measures to improve the company's financial position.

They sure have no asset. They sure will not be increasing income from carriers. So if they have no asset to sell. Can't increase income. What is there left to do?

1. reduce/cancel debt - Hey dumb hedge fund/VC, we got nothing. You either restructure and we may pay you 10cents on the dollar or we cancelling it all. We have no assets so really there is no meat on the bone
2. Renegotiate contracts - Drop bad contracts, keep good contracts. Most MDs will not have a drop in income b/c you have a contract they are obligated to pay. YOU are an employee and NOT a creditor. Your current TH overlord will likely drop some bad contracts and you will have a new overlord.
 
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Yawn.

The goal of Chapter 11 is to help businesses emerge from bankruptcy with a viable plan for the future. This may involve reducing debt, renegotiating contracts, selling assets, or other measures to improve the company's financial position.

They sure have no asset. They sure will not be increasing income from carriers. So if they have no asset to sell. Can't increase income. What is there left to do?

1. reduce/cancel debt - Hey dumb hedge fund/VC, we got nothing. You either restructure and we may pay you 10cents on the dollar or we cancelling it all. We have no assets so really there is no meat on the bone
2. Renegotiate contracts - Drop bad contracts, keep good contracts. Most MDs will not have a drop in income b/c you have a contract they are obligated to pay. YOU are an employee and NOT a creditor. Your current TH overlord will likely drop some bad contracts and you will have a new overlord.
Unless you're 1099. Then you actually are a creditors.
 
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