The Carlyle Group wants to make more healthcare deals,
according to co-CEO Kewsong Lee.
Two areas the firm likes include health care and technology.
In early 2020 Carlyle bought
Trust HCS and MAK Systems. A January 13th press release on the Trust HCS deal
stated:
WindRose Health Investors, LLC ("WindRose"), the New York-based
healthcare private equity firm, announced that it has completed the
sale of substantially all of the assets of its portfolio company, Trust
Healthcare Consulting Services, LLC ("TrustHCS" or the "Company"), to a
healthcare joint venture established by an affiliate of The Carlyle
Group and Cannae Holdings. Terms of the transaction were not disclosed.
TrustHCS is a provider of staffing and advisory services for coding,
clinical documentation improvement ("CDI"), denial management, and
coding education solutions. TrustHCS leverages its team of 500+
professionals to provide best-in-class solutions that enable its clients
to accelerate revenue cycle, improve revenue integrity, and reduce
operating costs.
Trust Healthcare Consulting Services, headquartered in Springfield, Missouri,
is a provider of staffing and advisory services that improve the
financial strength of healthcare organizations. The Company's services
and oversight improve the reliability, integrity and security of our
clients' financial health and enables clinicians, HIM, revenue cycle and
clinical documentation improvement leaders gain visibility, insight and
control of financial outcomes associated with every patient encounter.
Carlyle's website makes no mention of the Trust HCS deal. JV partner Cannae's
issued the following statement in November 2019:
Cannae Holdings, Inc.
(NYSE:CNNE) (“Cannae” or the “Company”) today announced that it has
entered into an agreement to participate in a health care joint venture
with an investment vehicle advised by an affiliate of The Carlyle Group
and another investor with deep health care services experience. The
joint venture will focus on acquiring, integrating and operating
synergistic health care services companies in the provider and payer
space.
Cannae will contribute its T-System business to the joint venture and
Cannae’s joint venture partners will contribute equity capital to enable
it to acquire other complementary health care services companies. As
part of this effort, T-System has also entered into a definitive
agreement to acquire a leading provider of coding and clinical
documentation services to domestic health care providers which will be
funded by the joint venture.
The investment vehicle affiliated with The Carlyle Group will be the majority controlling shareholder of the joint venture..
Consider the impact of T Systems for citizens in Savannah, Georgia.
A few months after transitioning to T-System’s
RevCycle+® service, Memorial University Medical Center’s revenue quickly
increased to the numbers T-System had estimated.
And, just a few months later, revenue continued to
improve even further to $1,269 per patient visit, from
the original baseline of $1,040 per patient visit.
Results
• $24.8 million gross annual revenue increase:
• $259 increase per patient for facility E/M charges\
• $31 increase per patient for facility procedure charges
• $502 increase per patient for observation services charges
A higher level
of service was assigned for about 65 percent of the
ED patients, and a lower level of service was assigned
to three percent. Also, a higher level of service was
assigned for about 70 percent of observation cases.
Maximizing healthcare reimbursement is a decades old game. It got current Florida Senator Rick Scott
in trouble when he was President of hospital giant HCA.
KKR and Bain Capital bought HCA in 2006 and conducted an IPO in 2011. KKR/Bain continued
selling stock in HCA in 2013.
KKR and HCA pair
bid on surprise medical biller Envision but HCA
fell away. KKR completed that deal alone.
Carlyle's new joint venture overlaps with
surprise medical billing.
Could T System/TrustHCS be encouraging the use of surprise medical billing?
While Congress funneled trillions in coronavirus relief to prop up
Wall Street it has
done nothing on surprise medical billing.
Washington Monthly reported:
The stakes are high in this fight not only because surprise bills are so
unjust, but also because it engages the most important long-term issue
in health care: rising and unsustainable costs.
Eliminating surprise billing entirely would save people with
employer-provided health insurance approximately $40 billion annually.
Compared to the $3.6 trillion the U.S. now collectively spends each year
on health care, that is not a large amount. What makes the legislative
battle over surprise billing so important is less the savings it could
produce than what the fight itself represents: a dry run for broader
reform. If Washington cannot deal with a problem so obviously egregious,
it is difficult to envision how it could address rising costs more
broadly.
Congress decided the PEU boys need that $40 billion more than citizens need relief from unjust practices.
The Guardian reported HCA's recent PEU like strategies.
HCA is currently pushing employees to accept several concessions to pay
and benefits, including wage freezes, elimination of 401k retirement
contributions, and signaling the possibility of layoffs, with non-union
employees already forced to accept freezes to annual wage and salary
raises.
HCA received about $1bn in federal coronavirus relief that does not have to be repaid, and over $4bn in accelerated medicare payments.
Moody's recently reviewed HCA and
stated:
HCA also has industry
leading profit margins and makes significant investments in its key markets
in order to drive future organic growth. HCA has a long track record
of stable operating performance and strong cash flow.
Just as Congress prioritized surprise medical billing over fair practices for the common person, HCA places profits over fair treatment of employees.
Meanwhile, private equity firms look to make hay from the Fed and Uncle Sam's cash fire hose. Carlyle saw China scramble over the coronavirus and bought blood plasma software company MAK Systems in February. Carlyle affiliate Ortho Clinical
received federal money to develop COVID-19 antibody tests, which help with blood plasma treatment (MAK Systems).
How many $1 million COVID-19 medical bills can PEU healthcare
make?
