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KKR-backed Envision Healthcare plans bankruptcy filing
It’s happening…
[link=https://www.investing.com/news/stock-market-news/kkrbacked-envision-healthcare-plans-bankruptcy-filing–wsj-3077762]https://www.investing.com…cy-filing–wsj-3077762[/link] -
149 Replies
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Hallelujah
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Jesus, it’s about time.
Now I’m just waiting for RadPartners to eat it.-
What does this mean for the Envision radiologist who works on site or remotely as a nighthawk? Do they still show up and work with the expectation they will be paid for the shifts they work?
Quote from knightrider
Jesus, it’s about time.
Now I’m just waiting for RadPartners to eat it.
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Interesting thought. They are reoganizing under Chapter 11. What happens to the contracts they had with the hospitals? I also wonder if any of the group buyouts were paid over time and there is still money on the table or even paid with Envision shares?
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Think bond holders and creditors get paid first. Then shareholders if there is anything left over. Guessing rads are free to leave.
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Whatever the rads are due for work performed before the bankruptcy filing and has NOT been paid yet — they will be lucky to receive pennies on the dollar, if anything at all. AKOMAN is on top of it.
I saw this nice summary on a business journal:
1. If a company goes into bankruptcy liquidation, all of its assets are distributed to its creditors based on a pre-determined priority order.
2. Secured creditors are first in line, as their claims over assets are often secured by collateral and a contract.
3. Some assets may have multiple liens placed upon them; in these cases, the first lien has priority over the second lien.
4. Unsecured creditors are divided between preferred and non-preferred, as certain unclaimed creditors like employees and tax agencies are given priority.
5. Shareholders are often last in line to receive proceeds with preferred stock shareholders getting better treatment than common stock shareholders.
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Ive seen two bankruptcies. Radiologists stopped getting paid but were promised the checks were coming. The checks never came. Both were much smaller entities than Envision though. Likely apples and oranges in this case.
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Quote from AKOMAN
Guessing rads are free to leave.
Unlikely, expect RP to go dumpster diving and pick up the better pieces for pennies on the dollar. Maybe in smaller markets/rural areas where there is no buyer might rads get free and clear. However those non-competes are assets, unlikely that another player doesnt try and snatch them up for cheap.-
What type of bankruptcy did they file?
If its Chapter 11 bankruptcy a company can reorganize and re-emerge
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Why doesnt KKR just sell it
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Probably because they paid 9 billion for it and its not worth 40% of that
Really high labor costs
Shrinking reimbursement
Who would want to buy it
Basically KKR got Fd for being stupid
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I’m glad neither RP or Envision owe me money now. For those currently employed by these entities I feel your trepidation.
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Yepper
They are both dying a slow death
Rad partners is the one trick pony
Sounds like envision has much less of a radiology presence compared to anesthesia and ER involvement
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If I were at RP or Envision now I would not be very interested in bonus work. These pay checks are often delayed by a quarter- of course that last quarter will not be paid.
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If rads working at either shop are not paid on time it voids the contract and non compete. If either one of these scumbag PEs threatens to enforce non compete. Find a lawyer and start a class action suit. Should give you back your freedom.
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Quote from Chirorad84
Probably because they paid 9 billion for it and its not worth 40% of that
Really high labor costs
Shrinking reimbursement
Who would want to buy it
Basically KKR got Fd for being stupid
Youd be surprised to find out that KKR probably broke even or still made money with this deal. The PE model is to put in little of your own money and a lot of investor money. PE firms have a very shortterm mindset about turningna profit which theyve likely already done. Once theyve recouped their initial stake, they dont really care if the company goes bankrupt or not.
Read the book- Plunder: Private Equity’s Plan to Pillage America. Their gameplan works the vast majority of the time. Problem us that is leaves collateral damage in its wake. What PE has done to nursing homes is unconscionable.
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Quite possible
I honestly think these geniuses of high finance bought so far into Artificial Intelligence replacing many physicians that they grossly underestimated the costs of labor in our industry
Reasonably intelligent people operating on minimal information that they just dont completely comprehend
Just my opinion
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Quote from Chirorad84
Quite possible
I honestly think these geniuses of high finance bought so far into Artificial Intelligence replacing many physicians that they grossly underestimated the costs of labor in our industry
Reasonably intelligent people operating on minimal information that they just dont completely comprehend
Just my opinion
I highly doubt AI influenced them.
Now reaching for yield after a decade of historically low interest rates…..
Or thinking the soft rads market would stay that way….. -
Only when the tide goes out do you discover who’s been swimming naked- Warren Buffett
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My overall point is this
The venture capital money was heavily influenced in the AI is going to replace us
Yes we will pay the radiologist for a few years but as soon as AI starts replacing them we will take over medical imaging
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Quote from Chirorad84
My overall point is this
The venture capital money was heavily influenced in the AI is going to replace us
Yes we will pay the radiologist for a few years but as soon as AI starts replacing them we will take over medical imaging
If computers can do radiology reads why have Radpartners? Hospital can get a software license and cut Radpartners out.
Now if Radpartners created the software it could license it to whoever- that was never the model of RP.
I think what you are getting at is RP would bill for physician services even though no physician service was being performed. Doubt payers would pay those bills.
Of course an RP stooge could sign off on 500-1000 reports a day but this would be flagged and investigated by feds.
Medicare would likely roll AI interpretation into the technical and get rid of pro fee. -
These companies are just rent seekers they are not innovators.
RP has potential in the tech/AI space if they pivot tho. They could then say they are a Tech company and get crazy high Tech IPO exit valuation.
Rad would make out well in this scenario as well. I know a couple who hold millions in RP stock….. -
“Providing emergency care can be very lucrative, as people cannot anticipate or plan for emergencies, and thus cannot research ahead of time if the emergency department where they receive care (and the clinicians there who will take care of them) are in-network. As such, emergency care is defined by inelastic demand, which means that demand for services will not change even when prices do. Envisions business model has historically relied on the inelastic demand of emergency medical care coupled with a strategy of out-of-network billing to charge much higher than average rates to patients.”
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[link=http://www.bloomberg.com/news/articles/2018-03-06/unitedhealth-is-said-to-join-bids-for-envision-healthcare-unit]UnitedHealth Group[/link], [link=https://www.healthcaredive.com/news/hca-kkr-envision-possible-buyout/523949/]HCA[/link], Carlyle Group and TPG Global were all named as having an interest in the company. [link=https://www.bloomberg.com/news/articles/2018-03-06/unitedhealth-is-said-to-join-bids-for-envision-healthcare-unit]UnitedHealth was particularly interested[/link] in the companys ambulatory surgery business.
[link=https://www.bloomberg.com/news/articles/2018-03-06/unitedhealth-is-said-to-join-bids-for-envision-healthcare-unit#xj4y7vzkg]https://www.bloomberg.com…lthcare-unit#xj4y7vzkg[/link]
If you can’t buy them sue them? -
Air ambulances are another major driver of surprise medical bills and balance billing. A Brookings report found that compared to other types of air ambulance providers, private equityowned air ambulance companies, in particular, are less likely to be in-network, with 89% of their transports from 2014-2017 being out-of-network. Bills from private equity-owned and publicly traded air ambulance companies also tend to be higher than those from hospital, nonprofit, and independently-owned providers, and surprise bills for the former grew by 50% between 2014 and 2017 and averaged $26,507 in 2017.
KKR and private equity firm American Securities controlled nearly two thirds of the air ambulance market as of 2017.
KKR envisioned radiology to go like the Air ambulance business- it hasn’t. -
Quote from drad123
Air ambulances are another major driver of surprise medical bills and balance billing. A Brookings report found that compared to other types of air ambulance providers, private equityowned air ambulance companies, in particular, are less likely to be in-network, with 89% of their transports from 2014-2017 being out-of-network. Bills from private equity-owned and publicly traded air ambulance companies also tend to be higher than those from hospital, nonprofit, and independently-owned providers, and surprise bills for the former grew by 50% between 2014 and 2017 and averaged $26,507 in 2017.
Insurers whine that HEMS providers remain out of network but then offer only a pittance to those who are in-network. It costs lots of money for blades to turn and there are often transports that remain completely unpaid as the patient is uninsured and/or available insurance is depleted before HEMS gets their bite at the apple. -
Quote from PPRad
What does this mean for the Envision radiologist who works on site or remotely as a nighthawk? Do they still show up and work with the expectation they will be paid for the shifts they work?
Quote from knightrider
Jesus, it’s about time.
Now I’m just waiting for RadPartners to eat it.A. I would never take (nor have I ever taken) a PE job. B. If I somehow found myself in this position, I would do the ABSOLUTE minimum to maintain my employment and spend the rest of the time looking for a new job.C. If you’re so inclined (which most rads aren’t), you could potentially approach the hospital you’re currently working at and offer to start a group, if they cut ties with Envision. This is probably the most lucrative option, but also the most short to intermediate term work.
Quote from Chirorad84
Probably because they paid 9 billion for it and its not worth 40% of that
Really high labor costs
Shrinking reimbursement
Who would want to buy it
Basically KKR got Fd for being stupidThey’re not stupid. This is baked into the business plan. I doubt THEY, kkr, lost money on this. Their investors may have, but they didn’t.
Quote from AKOMAN
If rads working at either shop are not paid on time it voids the contract and non compete. If either one of these scumbag PEs threatens to enforce non compete. Find a lawyer and start a class action suit. Should give you back your freedom.
You say this with such confidence. Where did you get this information? Case law? Laws passed through the legislative process? Please provide more info.While this sounds like a great story, I’m not buying it just yet.
Quote from drad123
Quote from Chirorad84
Quite possible
I honestly think these geniuses of high finance bought so far into Artificial Intelligence replacing many physicians that they grossly underestimated the costs of labor in our industry
Reasonably intelligent people operating on minimal information that they just dont completely comprehend
Just my opinionI highly doubt AI influenced them.
Now reaching for yield after a decade of historically low interest rates…..
Or thinking the soft rads market would stay that way…..Yes, EXACTLY. Servicing $5 Billy in debt at 1-2% is not the same as servicing at 7-9%
Quote from Chirorad84
My overall point is this
The venture capital money was heavily influenced in the AI is going to replace us
Yes we will pay the radiologist for a few years but as soon as AI starts replacing them we will take over medical imagingEVENTUALLY, yes. There’s a million jobs for AI to replace before us. Let’s do long haul trucking first, which is still god knows how long away. Until they can find a computer good enough to replace a driver, I’m not holding my breath.
Quote from drad123
Founded in 1992,4 Envision has cycled in and out of private equity ownership over the course of its lifespan. In 2005, Onex Capital purchased it via a leveraged buyout and brought it public later that year.5 It went private again when Clayton, Dubilier & Rice acquired it for $3.2 billion in 2011,6 and then had a successful initial public offering (IPO) in 2013.7 In 2016, it merged with AMSURG, a physician staffing and management group for ambulatory surgery centers. Soon after, Envision combined AMSURGs subsidiary, Sheridan, with Envisions emergency staffing division, EmCare, into a rebranded Envision Physician Services.8 This merger greatly expanded Envisions market power by making it the nations largest physician staffing firm, and allowed it to bid contracts for an entire hospital or system.
This is just the standard PE Ponzi scheme circle jerk in action.
Quote from Chirorad84
Im pretty sure if its a chapter 11 bankruptcy the company gets to continue to function
So dont be shocked if there isnt a sale or some reorganization that happens
Sooooooooooo the company cant continue without its physician work force therefore if envision somehow doesnt pay their doctors its definitely game over
But I doubt that happens at least in the near termUltimately, it comes down to supply and demand (of labor). Imaging volume trend is up and to the right. The supply of rads is basically flat. These MASSIVE companies with huge bureaucracies are too inefficient to function in a market where the labor costs are continuing to go up. They’ll reorganize, but they’re going to be MUCH MUCH smaller.
Quote from fw
Quote from drad123
Air ambulances are another major driver of surprise medical bills and balance billing. A Brookings report found that compared to other types of air ambulance providers, private equityowned air ambulance companies, in particular, are less likely to be in-network, with 89% of their transports from 2014-2017 being out-of-network. Bills from private equity-owned and publicly traded air ambulance companies also tend to be higher than those from hospital, nonprofit, and independently-owned providers, and surprise bills for the former grew by 50% between 2014 and 2017 and averaged $26,507 in 2017.
Insurers whine that HEMS providers remain out of network but then offer only a pittance to those who are in-network. It costs lots of money for blades to turn and there are often transports that remain completely unpaid as the patient is uninsured and/or available insurance is depleted before HEMS gets their bite at the apple.
They’re all just SCUMBAGS playing a game to avoid payments.
[link=https://www.bloomberg.com/news/features/2018-06-11/private-equity-backed-air-ambulances-leave-behind-massive-bills#xj4y7vzkg]https://www.bloomberg.com…assive-bills#xj4y7vzkg[/link] -
A decade of near zero interest rates have promoted a huge amount of malinvestment. Taking over the radiology job market appears to be one of them. Current housing bubble probably an even bigger one. With a FED like this who needs enemies?
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I will miss those guys!
Makes me sad. -
Allegedly it is just strategic bankruptcy and they plan on staying around through re organization.
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Fingers crossed RP is in the news next for bankruptcy. Although I hear their debts dont come due until 2024-2028. My guess is they file in mid 2024 for bankruptcy. Cant wait to see all the rats fleeing the sinking ship. I wont be hiring any RP rads unless they apologize for their mistake in the interview. And I would only accept a non-sellout individual to the group. RP sellouts- I will only offer 5 year partnership track to financial parity and voting rights after 10 years. No way Im letting that toxic mindset enter or group without some penalties
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If RP goes bankrupt I wonder what happens to
The stock that were part of the rads buy outsI suspect when RP goes chapter 11 they will wipe that stock out when they reorganize then we they re emerge the rads will no longer have that skin in the game
Not that many of them felt theyd ever get anything from that stock anyway
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Quote from sartoriusBIG
Fingers crossed RP is in the news next for bankruptcy. Although I hear their debts dont come due until 2024-2028. My guess is they file in mid 2024 for bankruptcy. [b]Cant wait to see all the rats fleeing the sinking ship. I wont be hiring any RP rads unless they apologize for their mistake in the interview. And I would only accept a non-sellout individual to the group. RP sellouts- I will only offer 5 year partnership track to financial parity and voting rights after 10 years. No way Im letting that toxic mindset enter or group without some penalties [/b]
I myself share similar sentiments. Other rads in my mid-sized group on the other hand are more lenient given the difficulty in recruiting and increasingly out of control work-lists.
Its very easy for me to feel like these sellouts are greedy and unethical but I suppose at the end of the day they made a business decision with respect to a practice they owned. The one caveat would be the scr*wing over of associates that were going to make partner. Financial self interest is not unique to these sell-outs however, during tough job market around 2012/2013 there were many private practices that removed their normal partnership tracks and only offered employed positions since they could get away with it. -
Quote from sartoriusBIG
Fingers crossed RP is in the news next for bankruptcy. Although I hear their debts dont come due until 2024-2028. My guess is they file in mid 2024 for bankruptcy. Cant wait to see all the rats fleeing the sinking ship. I wont be hiring any RP rads unless they apologize for their mistake in the interview. And I would only accept a non-sellout individual to the group. RP sellouts- I will only offer 5 year partnership track to financial parity and voting rights after 10 years. No way Im letting that toxic mindset enter or group without some penalties
[link=https://twitter.com/drmoneymatters/status/1656820782260187136]https://twitter.com/drmon…us/1656820782260187136[/link]
RP bonds now paying 38% -
Only 38%???
Even at that rate not worth it. -
If RP really believed in themselves they’d be buying their own bonds. If you bought $380 dollars of their bonds today you’d get back $1416 by the time it matures in in 2028. 368% return on your investment. Where’s our RP shills putting their smart money to work? LOL.
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It’s actually difficult to buy junk bonds as a retail investor. Most discount brokers like Schwab etc won’t let you access junk bonds. -
WD thats because most people would lose their shirts trying to do it. However, there is a great opportunity in junk bonds if you know what you are doing. Look at Howard Marks. Doubt he would find any value in RP bonds.
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I think drrad probably put his life savings into RP bonds. He seems to think they are going to take over the world, even North Korea. Makes sense I guess, literally NK uses forced labor. PE would love that. 100% skim with maybe a few kickbacks to Kim Jung-ill.
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FROM BLUEDEEP
“If RP really believed in themselves they’d be buying their own bonds. If you bought $380 dollars of their bonds today you’d get back $1416 by the time it matures in in 2028. 368% return on your investment. Where’s our RP shills putting their smart money to work? LOL.”
JUNK BONDS ARBITRAGE ANYONE?
THE NEW BUSINESS PE PARADIGM? INTERESTING THE HEDGE FUND QUANTS HAVE NOT FIGURED THIS ONE OUT YET.
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Quote from striker79
Allegedly it is just strategic bankruptcy and they plan on staying around through re organization.
While that may be what they’re selling, ultimately, it’s a fundamentally non-viable business model.
You can’t hire rads to work in Idaho or Iowa for 300k; While our professional employment market does come with ups and downs, 2008-2013 were relative anomalies – a convergence of a down stock market (so people didn’t retire / came out of retirement), PACS (which shot productivity through the roof), VR (which also increased productivity), and the emergence of, in all of this other upheaval, corporate scumbags who were able to slide out the ownership portion of our business from under our feet by promising greedy boomers payouts with money that they will (probably) never see.
Ultimately hospitals are going to have to start supporting their own little groups again; corporates aren’t going to be able to pay people enough to work. It’s not just the money; when people have no ownership in a business, they stop thinking about making the business better and only think about maximizing their own benefits.
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Quote from knightrider
Quote from striker79
Allegedly it is just strategic bankruptcy and they plan on staying around through re organization.
While that may be what they’re selling, ultimately, it’s a fundamentally non-viable business model.
You can’t hire rads to work in Idaho or Iowa for 300k; While our professional employment market does come with ups and downs, 2008-2013 were relative anomalies – a convergence of a down stock market (so people didn’t retire / came out of retirement), PACS (which shot productivity through the roof), VR (which also increased productivity), and the emergence of, in all of this other upheaval, corporate scumbags who were able to slide out the ownership portion of our business from under our feet by promising greedy boomers payouts with money that they will (probably) never see.
Ultimately hospitals are going to have to start supporting their own little groups again; corporates aren’t going to be able to pay people enough to work. It’s not just the money; when people have no ownership in a business, they stop thinking about making the business better and only think about maximizing their own benefits.
I would agree with that. Id like to see small groups near or at implosiok be employed by the hospital before RP or other private equity. All depends on the administration of the hospital and if they are easily seduced by the private equity power point and free steak dinner.
Ultimately private equity rads, the vast majority at least, are clockpunchers. They dont want to give any extra effort to clean the list by the end of the day. They could care less about doing tumor board, especially if it interferes with their RVU quotas. They dont care about making and nurturing clinician relationships. All of these things are needed to run a good practice and one that grows through word of mouth the the referring docs. Why would I as referring doc send my patients to your hospital if you treat me like crap, dont read my studies in a timely manner and/or produce half arse reads. Zero accountability in PE.
If they restructure via Chapter 11 and fail the share obligations to rads, might as well sign them up for Chapter 7. No rad will sign up with RP if they are worried they dont fulfill their promises. Hell, rads shouldnt even sign up with them now if they have half a brain.
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Hospitals are becoming part of larger health systems, which will need large groups, not multiple small individualized practices. So most will be going to an employed model. Some will be well managed, some not, depending on the system.
I dont see smaller, or even medium size, health systems surviving independently. Just look around you. Its coming.
If the PE/corporate model were reliable, they might have a chance as employment models can be challenging to manage. But PE is not about Radiology; its an arbitrage scheme. No way will it work long term, that much is clear. It looked good on paper to some administrators, but no longer. Alternatively, multiple private groups in a single system is not sustainable long term, for many reasons. The less well managed groups in particular will wither away and be absorbed by stronger groups. Ultimately moving towards employment.
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Look at Akumin, Inc.
Stock symbol: AKU
Soon to be delisted and place in the penalty box of “penny stocks” if not another Chapter 11.
The proverbial “dominoes” and “house of cards” are falling apart left and right. -
One point, if a smaller to midsize group can seamlessly offer all the services a hospital needs, than there is little reason for change. In fact, it’s a great way to avoid the headache of employing physicians, which is always more complicated than administrators expect.
But many groups are struggling to offer the desired services, for market reasons and because of unique internal dysfunction, particularly in IR and mammography. So there is a point a hospital/health system is going to give up on such a groups, and decide to control their own destiny. It will happen pretty fast too.
If you look at Dergon’s practice, that is where it is going. -
Quote from drad123
“Providing emergency care can be very lucrative, as people cannot anticipate or plan for emergencies, and thus cannot research ahead of time if the emergency department where they receive care (and the clinicians there who will take care of them) are in-network. As such, emergency care is defined by inelastic demand, which means that demand for services will not change even when prices do. Envisions business model has historically relied on the inelastic demand of emergency medical care coupled with a strategy of out-of-network billing to charge much higher than average rates to patients.”
It worked until it didn’t I guess.
Interestingly, the real death of ER as a physician specialty came not from these PE-backed staffing companies, but from HCA – who opened their own residencies and flooded the EM market with labor.
We are highly compensated labor… nothing more or less, we need to protect our labor pool ultimately and Rads will continue to be the best field in medicine.
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“Full Self Reading”
1 M “Robo Rads”
CEO needs to channel his inner Elon ASAP
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Or they go bankrupt and the rad gets nothing and works for free for the last quarter before liquidation since bonuses and 401k contributions are delayed by months.
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If I was an RP rad Id jump ship now. Actually if I was an RP rad. nevermind Id get kicked off auntminnie.
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Hope that couple also hold millions in other investments as well. Or they might be dining on peanut butter and jelly sandwiches most nights in retirement.
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Quote from Waduh Dong
RP has potential in the tech/AI space if they pivot tho. They could then say they are a Tech company and get crazy high Tech IPO exit valuation.
Rad would make out well in this scenario as well. I know a couple who hold millions in RP stock…..
I’m sure that this was part of the business plan, but I do not think they will be successful with this strategy. I looked up the RP AI strategy and it they are backing a small scale off the shelf AI product whose business model is to sell a la carte AI programs for things like pulmonary nodules, PE, intracranial hemorrhage, fracture, etc. If RP really had it figured out they would have amassed enough capital to hire the best AI people out of silicon valley and have them come up with a proprietary all in one AI system which they could use to dominate the market. The fact that they aren’t doing this but instead relying on some small time fragmented 3rd party approach tells me that they have failed or didn’t really try properly.
I feel guilty for being so cynical, but I do hope that those RP radiologists who own lots of RP shares end up finding their shares worthless. It will be payback for selling out the rest of us. -
Do you think that is sufficient or would you be punitive?
Many on here say they would not hire RP affiliated Rads. Personally, the loss of all equity they were given would be enough as that’s gotta hurt. I’d say after that I would personally consider the slate clean. -
I dont think its fair to blame the rads who work for them. People have to work to pay bills and may not have a lot of employment options to chose from, especially if they need to live in a specific location.
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According to the consultants we talked to when we listened to these offers, rads were mostly advised to consider the equity shares worthless, with the small possibility they could be worth something in the future.
So I don’t know how many rads that sold considered their shares of any value. -
[link=https://www.natlawreview.com/article/envision-s-bankruptcy-provides-insight-all-ailing-healthcare-industry]https://www.natlawreview.com/article/envision-s-bankruptcy-provides-insight-all-ailing-healthcare-industry[/link]
[link=https://www.msn.com/en-us/money/news/10b-buyout-goes-bust-envision-healthcare-backed-by-kkr-files-bankruptcy/ar-AA1bgmUK]https://www.msn.com/en-us/money/news/10b-buyout-goes-bust-envision-healthcare-backed-by-kkr-files-bankruptcy/ar-AA1bgmUK[/link]
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I have less of an issue with hiring naive young rads who happened to chose private equity as their first job. They were clearly not the actual scum who sold out. But if given the choice between a young PE rad and non PE rad, everything else equal, I would take a non PE rad. A sellout is another story. I dont particularly care if they did or didnt make money by selling out, although I would find it amusing if they had a net loss of money over five years as private equity vs just taking their 5 years of PP distributions. Id hire a sellout PE rad as an employee with RVU expectations (and skim 20% off their salary). Id only skim a sellout though. Everyone else would get a partnership track. Im even of the mind to give someone financial parity on day one if they are experienced and can hit the ground running, and just give them voting rights after one year.
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Do your views apply to PE-backed pornstars? Pornhub is now PE-backed! At least, they arent trying to transform porn, just making it boring. And, the AI applications are READY FOR PRIMETIME in this area.
[link=https://www.france24.com/en/live-news/20230625-we-want-porn-to-be-boring-say-pornhub-owners]https://www.france24.com/en/live-news/20230625-we-want-porn-to-be-boring-say-pornhub-owners[/link]
Id make the right RP rad a partner, just with separate voting rights as regards the sale of the practice. Im out for success, not punishment.
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I think pornstars would like eat what they kill earnings just like rads. #noskimjob
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Removing for decorum.
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Quote from drad123
I think what you are getting at is RP would bill for physician services even though no physician service was being performed. Doubt payers would pay those bills.
Of course an RP stooge could sign off on 500-1000 reports a day but this would be flagged and investigated by feds.
Medicare would likely roll AI interpretation into the technical and get rid of pro fee.
You need to be aware of what is going on in other areas, specifically primary care and ER.In many cases (most??) NO physician service is being performed. All done by midlevels. Patients are charged 85-100% of the physician charge. In states with supervised midlevel practice (24), physicians are assigned to “supervise” many more midlevels than is actually possible. So the supervision is basically review of some cases far after the patient is released. The physician has assumed all liability for 1000s of cases, while reviewing 50 or so. The physician is forced to do this as a condition of employment.
In states where there is a UPM law (Unsupervised Practice of Medicine), the midlevel legally needs no supervision. HOWEVER, many or most employers still require the physician to sign a supervision agreement, in order to insulate the employer from liability.
Keep in mind that there is NO legal prohibition against midlevels interpreting, and in fact, some do. Not a lot right now. Generally speaking the way most state’s laws stand, if a physician deems the midlevel capable of a particular activity, they can do it. I have examples of midlevels doing neurointerventional without supervision.
Here are other areas in which midlevels practice without any formal training, or any examination to prove competence:
Oncology
Cardiology
Dermatology
Allergy/immunity
Nephrology
ER (90% working in ER have NO ER training. Zero. It may be worse that the 10% who are certified as “trained” may do as little as what amounts to 100 hours of CME, followed by a test that one of the people who took it told me was the easiest test he had ever taken.)That said, there has been one incident of a third party payor refusing to pay. In Oklahoma about 3 years ago, one of the payors refused to pay if a Family Nurse Practitioner was billing as a hospitalist. There were a LOT of these. The hospitals employed these untrained nurses to act as hospitalists. When the payor refused to pay, many were fired. I do not know why this hasn’t been done more.
We in Radiology MUST be aware of what is going on in the rest of medicine generally. Those business people doing this know how to pervert the system, and are looking for other areas to expand into, because it means more, much more, money.
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Quote from Phil Shaffer
I have examples of midlevels doing neurointerventional without supervision.
we talking LP, or we talking about running catheters and wires up the neck? -
Quote from BHE
Quote from Phil Shaffer
I have examples of midlevels doing neurointerventional without supervision.
we talking LP, or we talking about running catheters and wires up the neck?
she didn’t specify, but it was clearly more than LPs. -
”
[i]Growth in the neurointerventional field, as a result of the emergence of thrombectomy as the gold treatment for large vessel occlusions, has created complex challenges. In an effort to meet evolving[/i]
[i]demands and fill workflow gaps, nurse practitioners have taken on highly specialized roles.[/i]
[i]Neurointerventional care has rapidly evolved similarly to interventional cardiac care, in that nurse[/i]
[i]practitioners are successfully being incorporated as procedural assistants in catheterization laboratories.[/i]
[i]Similar utilization of nurse practitioners in interventional neuroradiology holds the capacity to decrease[/i]
[i]physician workload, mitigate stresses contributing to burn-out, and reallocate more physician time procedures. Nurse practitioner practice faces procedural, clinical, legal and interpersonal barriers. calls for expanded practice by the Institutes of Medicine, a paucity of nurse practitioner training opportunities[/i]
[i]exists. Fragmented privileging processes contribute to environments where nurse practitioners must hurdles without established interventional neuroradiology-specific precedent. Increased nurse practitioner[/i]
[i]mentorship, fluoroscopy law standardization, physician support surrounding nurse practitioner autonomy, role consistency is imperative for optimal nurse practitioner utilization. Nurse practitioners are uniquely[/i]
[i]equipped to bridge evolving gaps through the provision of safe, efficacious care, and generating
[/i]
[i]lower costs. Discussion surrounding nurse practitioner use to bridge workflow gaps is an exciting for future practice development.”[/i]
[link=https://journals.sagepub.com/doi/abs/10.1177/1591019918802411]https://journals.sagepub.com/doi/abs/10.1177/1591019918802411[/link][i] [/i]Note that they cite the fact that in their institution, NPs are used to do cardiac caths
[i] [/i] -
here is another who has an interesting, and apparently official (since it is on the report) job title. “Cerbrovascular Interventional Radiology Nurse Practitioner”
What is the lesson here: DO NOT assume that what you see around you is the way the rest of the world works. There are other places doing things you NEVER would have thought ethical or possible. This includes leadership and radiologists at the University of Pennsylvania. These are our (and our patient’s) enemies. Do not underestimate their capacity for mutating the system in order to make more money.If you do underestimate them, you may one day go to work to be introduced by your department manager to your new “colleague” who will be replacing the partner retiring this week, and the colleague will be virtually untrained, and will be doing dangerous procedures.
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I read that the KKR fund that made the investment in Envision still has a 20% return despite this BK. Even when they “lose” they still end up winning big.
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I don’t care if they win in other sectors.
I just want them to decide there’s no money to be made in radiology -
Quote from dergon
I don’t care if they win in other sectors.
I just want them to decide there’s no money to be made in radiology
There’s always money to be made. Just may have to come at it from a different angle. i.e. buy hospitals or insurance companies, not physician practices.
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Agreed. There is no money here unless you do what Radpartners did and send all billing through an outlier paying practice etc. You have to have some borderline illegal/unethical practice to actually make a huge profit margin in this business to support any BS administrators.
Hopefully they all figure this out and quit, but when PE isnt held liable for anything and they get to extract cash while the whole thing crumbles it can just continue. -
Buffett’s take on private equity:
[link]https://www.youtube.com/watch?v=nT6h-XigC_U[/link] -
Quote from radrocker
Agreed. There is no money here unless you do what Radpartners did and send all billing through an outlier paying practice etc. You have to have some borderline illegal/unethical practice to actually make a huge profit margin in this business to support any BS administrators.
Hopefully they all figure this out and quit, but when PE isnt held liable for anything and they get to extract cash while the whole thing crumbles it can just continue.
Yes. Very, very sad. But typical of a late stage decline country, once wealthy, now obviously running out of time – and lying to people’s faces to boot, not caring. The demons are here. They’re even here, as doctors, on this board at times, sadly. -
KKR will acquire all of the outstanding shares of Envisions common stock for $46.00 per share in cash, representing a 32% premium to Envisions volume-weighted average share price (VWAP) from November 1, 2017, the day immediately following the Companys first announcement that it was reviewing strategic alternatives. The transaction price represents a multiple of 10.9x trailing 12 months Adjusted EBITDA and 10.1x 2018 anticipated Adjusted EBITDA
Why the premium? What did KKR see?
[link=https://www.sec.gov/Archives/edgar/data/1678531/000119312518188699/d606502dex991.htm]https://www.sec.gov/Archi…8699/d606502dex991.htm[/link] -
What is Envision Healthcare’s Revenue?[/h3] Envision Healthcare revenue is $7.8B annually. After extensive research and analysis, Zippia’s data science team found the following key financial metrics.
Envision Healthcare’s revenue growth from 2015 to 2017 is 204.62%.
Envision Healthcare has 57,750 employees, and the revenue per employee ratio is $135,399.
Envision Healthcare’s peak quarterly revenue was $2.1B in 2018(q1).
Envision Healthcare peak revenue was $7.8B in 2017.
Envision Healthcare annual revenue for 2016 was $3.5B, a 36.27% growth from 2015
Envision Healthcare annual revenue for 2017 was $7.8B, a 123.54% growth from 2016.
growth at a terrible price. -
In 2017, the company reported a net loss of $232.5 million on revenue of $7.8 billion.
We lose money on every unit but make it up in volume. -
Net loss of 232 million. Coincidentally how much is overall executive compensation? 232 million?
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Quote from drad123
KKR will acquire all of the outstanding shares of Envisions common stock for $46.00 per share in cash, representing a 32% premium to Envisions volume-weighted average share price (VWAP) from November 1, 2017, the day immediately following the Companys first announcement that it was reviewing strategic alternatives. The transaction price represents a multiple of 10.9x trailing 12 months Adjusted EBITDA and 10.1x 2018 anticipated Adjusted EBITDA
Why the premium? What did KKR see?
[link=https://www.sec.gov/Archives/edgar/data/1678531/000119312518188699/d606502dex991.htm]https://www.sec.gov/Archi…8699/d606502dex991.htm[/link]
We need to erase the myth of private equity being business geniuses. Private equity knows how to extract money from a business to turn a profit. They are shrewd when it comes to indentifying loopholes in the tax and bankruptcy code and they know how to load up a company with debt (while injecting comparatively little of their own money as they mine it for profits. Its more like a short term race to see how much money you can extract as fast as possible. The consequence of short term thinking is that the companies often dont survive. But KKRs businese plan means little risk to their invested money which are offset by all the annual and one time fees they charge for consulting etc. So sure they sometimes lose, but they never lose big. Often times private equity has still already turned a profit when the company goes bankrupt.
Its akin to playing blackjack with a pot of money, 95% of which is not yours and you charge fees for the time you spent playing. Lets say you gamble 100k, 5k of which is your own money. You charge 1k per hour for your time. Well, lets say it turns out you ended up losing it all, the entire 100k after playing 6 hours. Not bad for you because you still turned a 1k profit. This 1k per hour was paid out of the pot after every hour. They dont wait for payment. They take them frequently and quickly. This is private equity in a nutshell. They never lose big. They sometimes win even when the company loses and goes bankrupt. And occasionally the business does really well and they make money hand over fist. But with little risk, the net result is that they make a lot of money.
Bottom line is they arent experts in healthcare, radiology, emergency medicine, nursing homes etc. They add basically zero value. But they have a very narrow range of skills geared toward rapid profit extraction. The effects of their short term profit extraction mindset is almost always deleterious to the underlying company. If the company they bought succeeds it is despite them not because of them.
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Quote from sartoriusBIG
Quote from drad123
KKR will acquire all of the outstanding shares of Envisions common stock for $46.00 per share in cash, representing a 32% premium to Envisions volume-weighted average share price (VWAP) from November 1, 2017, the day immediately following the Companys first announcement that it was reviewing strategic alternatives. The transaction price represents a multiple of 10.9x trailing 12 months Adjusted EBITDA and 10.1x 2018 anticipated Adjusted EBITDA
Why the premium? What did KKR see?
[link=https://www.sec.gov/Archives/edgar/data/1678531/000119312518188699/d606502dex991.htm]https://www.sec.gov/Archi…8699/d606502dex991.htm[/link]
We need to erase the myth of private equity being business geniuses. Private equity knows how to extract money from a business to turn a profit. They are shrewd when it comes to indentifying loopholes in the tax and bankruptcy code and they know how to load up a company with debt (while injecting comparatively little of their own money as they mine it for profits. Its more like a short term race to see how much money you can extract as fast as possible. The consequence of short term thinking is that the companies often dont survive. But KKRs businese plan means little risk to their invested money which are offset by all the annual and one time fees they charge for consulting etc. So sure they sometimes lose, but they never lose big. Often times private equity has still already turned a profit when the company goes bankrupt.
Its akin to playing blackjack with a pot of money, 95% of which is not yours and you charge fees for the time you spent playing. Lets say you gamble 100k, 5k of which is your own money. You charge 1k per hour for your time. Well, lets say it turns out you ended up losing it all, the entire 100k after playing 6 hours. Not bad for you because you still turned a 1k profit. This 1k per hour was paid out of the pot after every hour. They dont wait for payment. They take them frequently and quickly. This is private equity in a nutshell. They never lose big. They sometimes win even when the company loses and goes bankrupt. And occasionally the business does really well and they make money hand over fist. But with little risk, the net result is that they make a lot of money.
Bottom line is they arent experts in healthcare, radiology, emergency medicine, nursing homes etc. They add basically zero value. But they have a very narrow range of skills geared toward rapid profit extraction. The effects of their short term profit extraction mindset is almost always deleterious to the underlying company. If the company they bought succeeds it is despite them not because of them.
Sounds like the RP sellouts aren’t the smartest guys in the room. Transform radiology! As more and more info comes to light transform radiology indeed. I don’t think young radiologists want or need to be transformed into RP drones making money for “investors”. If RP wants to take over physicians they should buy up the hospitals or insurance companies or both but l will warn them- these businesses aren’t cheap!
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There seems to be some confusion…some of the articles being quoted are 5 to 6 years old.
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Thats the point PR. Trying to show the environment when the decisions were made.
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People are talking about KKR as thought it is a single entity making decisions. Thats not how these groups work. The individual deals are usually brokered by one partner and that partner listens to a sales pitch form hungry associates trying to make a name for themselves. Easy to see why somebody ignorant of the practice of medicine and physician value would make the mistakes they did.
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There is tremendous competition within these PE firms to get ones idea taken notice of and then there is tremendous competition among the PE groups to put fund money to work in a sector, since once raised it typically has to be used for a single purpose. Thats why they tend to over pay. They dont want their competitors to get the deal.
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Quote from Thread Enhancer
People are talking about KKR as thought it is a single entity making decisions. Thats not how these groups work. The individual deals are usually brokered by one partner and that partner listens to a sales pitch form hungry associates trying to make a name for themselves. Easy to see why somebody ignorant of the practice of medicine and physician value would make the mistakes they did.
Do you think a few analysts got burned at the stake on the Envision deal, maybe even a partner fell on his sword? It was 3.5 billion loss, not pocket change for sure. You said Envision wasn’t a good business model- “tisk tisk”- somebody somewhere dropped the ball.
Bankruptcy considered as soon as 2020- after purchase at a 33 premium over share price in 2018?
[link=https://www.bloomberg.com/news/articles/2020-04-20/kkr-s-envision-healthcare-said-to-consider-bankruptcy-filing#xj4y7vzkg]https://www.bloomberg.com…uptcy-filing#xj4y7vzkg[/link] -
So it says KKR took Envision private in 2018 with a $5.5B buyout and the total deal with debt ended up being $10B. So KKR had to pay the previous shareholders $5.5B, plus take on about $4.5B in debt that Envision was carrying. So if KKR needed $10B, maybe they get cheap cheap money collateralized w/ Envision assets (hospital contracts?, accounts receivables, etc). Maybe KKR only put up $1B or less of their own cash and borrowed the rest, refinanced later when debt was super cheap and are not really losing out too much. It’s the banks that lent that money that are screwed. Is this about right?
There should be about 90 days of accounts receivables to continue to pay the creditors and maybe the doctors? This is just terrible for the docs that they have worked the past month and may not get anything. Not sure how Chapter 11 works when you have employees that need to still come in to turn on/off the lights etc.
Very sad for the doctors.Quote from neuron10
Only when the tide goes out do you discover who’s been swimming naked- Warren Buffett
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KKR/i.e., PE modus operandi is to distribute risk to others, and minimize theirs. They will lose, but the lenders will lose the most. With the actual company and employees being victims. This is the common story of PE; destroy functional companies in search of quick profit.
It seems the bet was to flip Envision before it became toxic, because as a long term investment is seems so limited. Once you suck out the juice from salaries, there is little upside. Maybe they were betting on AI to revolutionize things, but way too prematurely. -
Envision is still posting job openings on ACR as of today! LOL! Someone would have to be very uninformed to sign up with them now, but I bet some rads will fit this bill.
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The company went from generating more than $1 billion in earnings before interest, taxes, depreciation and amortization in the year ended September 2020 to less than $250 million two years later, according to people familiar with the matter.
[link=https://radiologybusiness.com/topics/healthcare-management/healthcare-economics/envision-healthcare-bankruptcy-kkr-private-equity]https://radiologybusiness…tcy-kkr-private-equity[/link]
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Founded in 1992,4 Envision has cycled in and out of private equity ownership over the course of its lifespan. In 2005, Onex Capital purchased it via a leveraged buyout and brought it public later that year.5 It went private again when Clayton, Dubilier & Rice acquired it for $3.2 billion in 2011,6 and then had a successful initial public offering (IPO) in 2013.7 In 2016, it merged with AMSURG, a physician staffing and management group for ambulatory surgery centers. Soon after, Envision combined AMSURGs subsidiary, Sheridan, with Envisions emergency staffing division, EmCare, into a rebranded Envision Physician Services.8 This merger greatly expanded Envisions market power by making it the nations largest physician staffing firm, and allowed it to bid contracts for an entire hospital or system.
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You guys are talking about basics of a leveraged investment model. This is nothing earth shattering as is done in many different areas.
For example, real estate investors take on tons of leverage to boost returns. They want to put as little equity as possible into deals.
Of course, there is risk when rates rise rapidly, but they put in so little of their own capital at risk, as long as there is enough cash flow to service the leverage they are fine and likely already cashed out their return via a dividend recap or similar maneuver.
Hard to think of a more stable and predictable cash flow than physician professional service revenue. So I bet they did just fine in terms of KKRs return for their fund.
Real estate is also supposedly a stable revenue stream but as we have learned it is not as stable as thought and there are multi-family properties in my area being repossessed by the banks.
The PE industry basically took this leveraged model and made it even better by taking the leverage / debt load onto the company, not them. This is was the revolutionary change KKR invented that made the founders are rich a hell.
Barbarians at the gate is worth reading.
I know a lot of local business “geniuses” who just loaded up on leverage…. things were great for the last 12-13 years and they were ballers…. the future ain’t looking so great for them right now, however LOL.
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Quote from Waduh Dong
[b] Hard to think of a more stable and predictable cash flow than physician professional service revenue[/b]. So I bet they did just fine in terms of KKRs return for their fund.
What was predictable was the margin they would earn on that service income would narrow and there was no ability to “scale” the business because you always needed more radiologists every time you took on more business. I had this discussion with a few smarter PE mangers and they understood. I mentioned it to an ex CEO of a Furtune 500 company and he shared his experience when KKR took them over. They just didn’t understand the business. They also went bankrupt.
Doesn’t matter though. KKR will be fine because although they would like to win every bet they know they will lose some and it’s not really them that loses, it’s the bond holders.
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Yes, this could teach a lesson to PE types too stay away from Radiology in general.
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Quote from Waduh Dong
Yes, this could teach a lesson to PE types too stay away from Radiology in general.
I shared that lesson ahead of time with several in the early days. Some were thankful. Others were already smart enough to avoid radiology. One was too late and had already lost a bunch of money. He asked “why didn’t you tell me?” Of course the answer was “you didn’t ask”.
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PE did not learn its lesson. I would bet money that KKR has already reached break even with this deal. They buy it with debt (most of which is not their money) saddle Envision itself with more debt and almost certainly they had a way to extract some type of recurring fee just for the privilege of being owned by KKR. Also, private equity in general are masters of the bankrupcy court. Wouldnt be shocked if they somehow jettisoned a bunch of debt from the books and bought it back somehow for pennies on the dollar.
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SBIG, I know what you mean but I know enough of these guys to know they are not in the business of losing the game even if they eke out a tiny profit. One has to understand how they compete for the investment dollars that are funded by thing like state pension funds. They want to win and win big. Sure they are protected from heavy losses but they do learn from mistakes. Radiology was a mistake.
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Im pretty sure if its a chapter 11 bankruptcy the company gets to continue to function
So dont be shocked if there isnt a sale or some reorganization that happens
Sooooooooooo the company cant continue without its physician work force therefore if envision somehow doesnt pay their doctors its definitely game over
But I doubt that happens at least in the near term
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Google
The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor’s assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets.
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If the envision rads are savvy they could get together and buy their section out on the cheap possibly
But rads typically arent that savvy
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Quote from Chirorad84
Quite possible
I honestly think these geniuses of high finance bought so far into Artificial Intelligence replacing many physicians that they grossly underestimated the costs of labor in our industry
Reasonably intelligent people operating on minimal information that they just dont completely comprehend
Just my opinion
And yours is a good one here. Ive explained over many years why this is so. Its not really the AI piece though. When this started they thought they knew our business better than we did and the market was tough for radiologists. Sadly there was a group of radiologists that was taken advantage of because they believed the suits were smarter. I had a few tell me in real life and in here. -
Im well aware of the Suits who have a little bit of knowledge about healthcare and feel they know it all
But I dont care what business you are in
When your main labor costs are physicians and the market is even minimally competitive your labor costs are huge and you arent going to change that
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RP pushed its best practices and subspecialization, not really AI.
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Quote from Chirorad84
Basically KKR got Fd for being stupid
I remember when I was told over and over how they were much smarter than us.
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Dumpster diving for what? Envision employees that are clearly left with a sour taste in their mouth for private equity? RP has zero chance of staffing new sites without taking the majority of Envision employees already on the site. Envision employee rads would have to be braindead to sign up with another PE firm. If they have any sense they would tell the hospital they want to become hospital employed or form a new private group.
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Envision, bought for billions in 2018, could represent one of the biggest losses ever for owner, KKR
[link=https://www.nashvillepost.com/business/health_care/report-major-health-care-company-nears-bankruptcy/article_310ed59e-ef31-11ed-af74-5f0ee6a310e6.html]https://www.nashvillepost…af74-5f0ee6a310e6.html[/link]
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[link=https://www.reuters.com/markets/deals/kkr-backed-envision-healthcare-files-bankruptcy-2023-05-15/]https://www.reuters.com/m…bankruptcy-2023-05-15/[/link]
it’s official
KKR-backed Envision Healthcare files for bankruptcy[/h1]
KKR & Co Inc-backed [link=https://www.reuters.com/companies/KKR.N](KKR.N)[/link] Envision Healthcare Corp and its wholly owned subsidiaries filed for Chapter 11 bankruptcy protection on Monday.
The U.S. provider of physicians has estimated assets and liabilities in the range of $1 billion to $10 billion each, the company said in a court filing.
The company said that it entered into a restructuring support agreement for debt obligations of about $7.7 billion under which its unit AMSURG which manages ambulatory surgery centers and Envision Physician Services will be separately owned.
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[link=https://www.ft.com/stream/51d10a56-b7de-482e-9603-6e5f31e625ee]KKR[/link]s initial $3.5bn equity investment is expected to be wiped out
[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/conten…4fad-b2fb-3d1f601d1b55[/link]-
[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55[/link]
People close to Envision told the Financial Times that if UHC had paid Envision in line with its expectations, the companys liquidity would have been sufficient to avoid bankruptcy this year.
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Double whammy. Get paid less and have to pay key revenue producers more. This was highly predictable.
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Quote from Thread Enhancer
Double whammy. Get paid less and have to pay key revenue producers more. This was highly predictable.
Insurance companies want to pay Medicare rates. They will get what they want.
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Although I am not the greatest predictor
I predict they break up the envision component and sell off the parts no money in employing doctors so I bet they but it into parts and see what they can get
The Amsurg component should be relatively successful if they are able to wipe out debt but my understanding is PIMCO pretty much owns them now so wont be surprised if a big player buys out the Amsurg unit whole
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[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55[/link]
bankruptcy settlement that Envision will ask the court to approve has been negotiated over several weeks and has garnered majority support among multiple creditor groups. It calls for its physician-practice business, Envision, to be reorganised as a standalone company separate from AmSurg.
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[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55[/link]
Envisions senior lenders, including investment firms Strategic Value Partners, Brigade Capital, Blackstone and Eaton Vance, will swap their paper into the restructured Envision equity. Holders of the most junior Envision loans and those holding $1bn in bonds, which are currently trading at less than 1 cent on the dollar, will in effect be wiped out.
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Envision and AmSurg currently have roughly $8bn in total debt which is to be slashed to about $2bn in the bankruptcy.
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6 billion loss trying to yolk radiologists.
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[link=https://workweek.com/2023/05/11/the-rise-and-fall-of-envision-healthcare/]https://workweek.com/2023…f-envision-healthcare/[/link]
Quote from drad123
[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55[/link]
Envisions senior lenders, including investment firms Strategic Value Partners, Brigade Capital, Blackstone and Eaton Vance, will swap their paper into the restructured Envision equity. Holders of the most junior Envision loans and those holding $1bn in bonds, which are currently trading at less than 1 cent on the dollar, will in effect be wiped out.
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[link=https://stocks.apple.com/AuGnjuV-_RB-F62JzkWkXhA]https://stocks.apple.com/AuGnjuV-_RB-F62JzkWkXhA[/link]
Bankruptcy has been filed as of this morning.
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“”All of the company’s debt, with the exception of a revolving credit facility, will be cancelled, deleveraging about $5.6 billion, it added.””
Nice little haircut for them clowns! -
KKR probably already made their principle investment back from monthly and onetime management fees. Only real loser is the taxpayer.
Question is who is going to loan them money now? Would be shocked if they dont file chapter 7 in less than 5 years. RP is next.
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Quote from sartoriusBIG
KKR probably already made their principle investment back from monthly and onetime management fees. Only real loser is the taxpayer.
Would be nice to see the numbers on this. I suspect the same.
Pension funds, I.E. middle class retirees, ate the sh*T sandwich. Always look for the little guy to take the fall.
WA,MN,NY, Canada, MI,OR, etc.
[link=https://pestakeholder.org/wp-content/uploads/2022/12/Envision_CaseStudy_Final_Dec2022.pdf]https://pestakeholder.org…tudy_Final_Dec2022.pdf[/link]
“the strong do what they can and the weak suffer what they must -
Ya i mean how can this thievery be legal. Its definitely going to be pension funds that get F’d. These KKR and envision admin/executive d bags need to be sued for everything they have. But murica. Im sure they all took multimillion bonuses last year (which should be paid back in a just system but prob wont)
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I doubt this is a big deal for KKR… they know a certain number of their investments will be turds. They usually extract as much as they can prior to bankruptcy anyway.
$10b for such a cr@p company like envision has to sting a little bit for them, however. Extremely poor judgement for so-called “professional” investors. But look at all the “smart money” that went for FTX scam.
These guys may have fancy degrees but they are no geniuses.
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Quote from radrocker
Ya i mean how can this thievery be legal. Its definitely going to be pension funds that get F’d. These KKR and envision admin/executive d bags need to be sued for everything they have. But murica. Im sure they all took multimillion bonuses last year (which should be paid back in a just system but prob wont)
They do get sued by some of the biggest investors. Not often enough IMO.
[link=https://www.martindale.com/matter/asr-76410.pdf]3207 BSL Mar.qxd (martindale.com)[/link] -
But, and this is a big one. The same public pension funds get tremendous return on their investments in VC/PE funds. They too lose a small fortune on some of them but a earn a much larger fortune on the ones that work. I predicted PE in radiology would fail. The smartest investors I know figured out the same thing but some very successful ones didn’t before losing a lot.
If we all could tell ahead of time which was which we wouldn’t be doing what we do. Well, I would because I like it…
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PIMCO now basically owns AMSURG
Gotta think they can at least make their money back at some point. Because the ambulatory surgery business isnt going anywhere and they no longer have the physician salary expense now that they shed the envision component
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[link=https://www.ft.com/content/bf6ab257-2059-4fad-b2fb-3d1f601d1b55]https://www.ft.com/conten…4fad-b2fb-3d1f601d1b55[/link]
In August last year, Envision completed a complex refinancing transaction to increase liquidity and buy back existing debt at a discount. The deal centred on separating its AmSurg surgical facilities from its physician practices and borrowing new money against those facilities. The terms left existing Envision lenders without a claim on the more profitable AmSurg assets.
The new AmSurg $1.1bn senior loan was provided by Angelo Gordon, Centerbridge Partners and Pimco. Pimco, then a large existing creditor at Envision, swapped its existing loan to that company for a junior loan stake in AmSurg. Envision also raised cash from a new loan at the time.
Pimco is set to swap its junior AmSurg loan into that companys restructured equity, as well as lead a $300mn financing to acquire the remaining fifth of the surgical facilities company that currently has been retained by Envision.
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ya i mean i never saw this stuff working really. Its really not much different from FTX though either.. we’ll see if radpartners can hold out. But equation goes: pretend to have revolutionary idea(even though its just a basic business providing hopefully healthcare), sprinkle in some AI talk, some “efficiency at scale” talk, some professional mangement talk…. extract investments, never create a sound business, bonus yourself and walk away as it burns down.
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ambulatory surgery centers only do well if the physicians are incentivized to bring their cases there (ie have ownership in the center). Otherwise its just easer to go to hospital or set up your own center where you get the tech fees.
Quote from Chirorad84
PIMCO now basically owns AMSURG
Gotta think they can at least make their money back at some point. Because the ambulatory surgery business isnt going anywhere and they no longer have the physician salary expense now that they shed the envision component
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I wouldn’t get too excited by this, as in this isn’t the bell tolling for PEs interest in radiology waning.
Chapter 11 bankruptcy is basically a way for companies to screw their creditors and shareholders while they continue to operate. I’d be interested to know how many publicly traded companies that enter into Ch. 11 bankruptcy actually go on to Ch. 7 (full liquidation).
KKR may not know squat about radiology but they’ve been playing the LBO for decades and play it very well. They ALWAYS get paid and assuredly have gotten a great ROI long before the bankruptcy sirens start.
The LBO thing isn’t about sound business/economic/financial principles, it’s the financial equivalent of musical chairs and KKR always finds a seat well before the music stops playing.
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[link=https://twitter.com/drmoneymatters/status/1661767660433211392]https://twitter.com/drmon…us/1661767660433211392[/link]
Rad partners bond update: 2 weeks later down another $10 now at $27.4 yielding over 50%.
(May 11: Update on Rad Partners bonds. Now under $40 (orig $100) paying 38% interest (orig 9.25%) down > $10 in 1 mo ($52 in Apr) [link=https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C876699&symbol=MDAS4940586)]https://finra-markets.mor…mp;symbol=MDAS4940586)[/link]-
and ..
[link=https://twitter.com/benwhitemd/status/1662119859763781634]https://twitter.com/benwh…us/1662119859763781634[/link]
RadPartners is now behind on paying its unique profit sharing proceeds to its partners.
In other assuredly unrelated news, RPs SVP of finance is resigning.-
Could this be part of the long term plan from the beginning? Reap profits, file bankruptcy, rads lose their shares, continue business as usual once debt is shed
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Quote from RadMon
Could this be part of the long term plan from the beginning? Reap profits, file bankruptcy, rads lose their shares, continue business as usual once debt is shed
The finance bro double cross…
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sorry, i’m not at all business savy but someone mentioned that 401ks are technically corporate assets. if there is a bankruptcy do the employees keep their 401k funds? or does 401k balances get gobbled up during as corporate asset during the bankruptcy process.
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401ks absolutely arent corporate assets
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Boggles,
Many 401 K plans have vesting schedules. Some of the more onerous ones are up to 5 years.
If the company fires you for ANY reason or you quit for ANY reason, whatever portion of the 401 K that is not vested goes back to the company.
Also, lookout for the 401 K plans where they invest in company shares. If shares go to a value of ZERO, so does your 401 K account (see history of Enron as a perfect example).
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That’s fair, not sure what the standard match is for a 401k but I was thinking that most of the money in a 401k would be the rads own money which would not be at risk during bankruptcy. And yes that’s why you should invest in index funds and not individual stocks!
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Quote from PirateRad
Many 401 K plans have vesting schedules. Some of the more onerous ones are up to 5 years.
If the company fires you for ANY reason or you quit for ANY reason, whatever portion of the 401 K that is not vested goes back to the company. ‘Vesting’ only applies to any employer match.
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Any place with 457B can get dicey in bankruptcy. I think 457b only non for profit tho. 401k what youve put in is protected regardless of employer though
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Quote from loggedin
sorry, i’m not at all business savy but someone mentioned that 401ks are technically corporate assets. if there is a bankruptcy do the employees keep their 401k funds? or does 401k balances get gobbled up during as corporate asset during the bankruptcy process.
Quote from boggles
401ks absolutely arent corporate assets
yes. the 401k is your money. worst case scenario is that you lose a month of the corporate match if they didn’t deposit to your account before filing. But all the money you have put in and they have put in the past belongs to the employee.
There are some slight different retirement plans that can be at risk during bankruptcy because they are employer money (457b for example) … but not your 401k
(Oh … and if somehow you have been getting paid for retirement in corporate shares …. then you’re screwed too if they go to zero during bankruptcy)
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Quote from RadMon
Could this be part of the long term plan from the beginning? Reap profits, file bankruptcy, rads lose their shares, continue business as usual once debt is shed
That’s why they call it funny money. Always ask for the cash upfront and assume anything you get at the end is less valuable than toilet paper.-
Cant wait until all the sellout RP rads realize they will lose all their funny money shares. Wondering how that conversation with their kid goes- sorry Johnny I planned on paying your private college tuition and room/board for 4 years (300k) but RP shares turned out to be worthless. Youll have to go to state school and get a job at Del Taco
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Im betting the older rads who sold out already had enough money to fund their kids education
If not they have more and bigger problems than RP worthless stock
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Youd be surprised how many house poor paycheck to paycheck rads are out there. Or divorced rads. Etc etc.
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Quote from sartoriusBIG
Youd be surprised how many house poor paycheck to paycheck rads are out there. Or divorced rads. Etc etc.
Golden handcuffs and keeping up with the perception of a ‘rich doctor’ is a reality. I’m only 2 years in but i’m so shocked at how many rads I know have yachts, second homes (in one case a third home), ferraris, and 2-3 million dollar houses.
Sure, maybe some of these things are attainable on a higher end rad salary…..but still shocked at how many guys I know that are willing to moonlight q2 weekends just to fund this lifestyle.-
“”but still shocked at how many guys I know that are willing to moonlight q2 weekends just to fund this lifestyle.””
Look at the needs/wants of their significant other and the “keeping up with the Joneses” drive for all these will be explained.
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Again bigger problems than worthless RP stock
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Yea, but that might indicate other systemic financial problems that are unfolding…or may unfold soon
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Lets put it this way. All radiologists could be financially secure and retire by 50 if they lived frugally. Alas, I fear this is not the case for the majority of 50 year old rads. Gotta keep up with the Joneses and take a couple extravagant vacations a year, buy a sportscar and cadillac escalade to haul the kids. Maybe a timeshare if theyre really financially self destructive.
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Quote from sartoriusBIG
Lets put it this way. All radiologists could be financially secure and retire by 50 if they lived frugally. Alas, I fear this is not the case for the majority of 50 year old rads. Gotta keep up with the Joneses and take a [b]couple extravagant vacations a year, buy a sportscar and cadillac escalade to haul the kids. Maybe a timeshare if theyre [/b]really financially self destructive.
There is a lot of room between “financially secure and retire by 50” and “financially self destructive”. Plenty of room for the bold. Just move the retire date to 65 and part time by 60.
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Quote from sartoriusBIG
Cant wait until all the sellout RP rads realize they will lose all their funny money shares. Wondering how that conversation with their kid goes- sorry Johnny I planned on paying your private college tuition and room/board for 4 years (300k) but RP shares turned out to be worthless. Youll have to go to state school and get a job at Del Taco
State school kids working at Del Taco will go farther.-
Quote from drad123
Quote from sartoriusBIG
Cant wait until all the sellout RP rads realize they will lose all their funny money shares. Wondering how that conversation with their kid goes- sorry Johnny I planned on paying your private college tuition and room/board for 4 years (300k) but RP shares turned out to be worthless. Youll have to go to state school and get a job at Del Taco
State school kids working at Del Taco will go farther.
I thought we were heading towards free college…
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Dominoes
[link=https://www.wsj.com/articles/kkr-backed-healthcare-provider-genesiscare-preps-for-bankruptcy-filing-within-days-e838a82e]https://www.wsj.com/artic…g-within-days-e838a82e[/link]
KKR-Backed GenesisCare Preps for Bankruptcy Filing Within Days-
Australia-based healthcare provider is in talks about roughly $200 million in new financing to see it through bankruptcy
