Specialist
Former executive at Envision Healthcare Corp
Agenda
- Recent trends and developments in the physician staffing sector
- Reimbursement landscape including radiology reimbursement pressure and No Surprises Act impacts
- Physician supply-demand dynamics and margin compression from labour shortages
- Competitive landscape – Envision Healthcare’s positioning vs TeamHealth, Mednax (NYSE: MD), NAPA (North American Partners in Anesthesia) and others
- Q2 2022 outlook, highlighting business risks and turnaround strategy
Questions
1.
What are the most important trends and developments you’ve been following in the physician, anaesthesiologist and radiologist staffing market over the past six months?
2.
How is increasing consolidation among large health systems impacting staffing companies such as Envision? To what extent has this shifted negotiation leverage in favour of health systems and how exposed is the company to this headwind?
3.
Do you think large health systems will continue insourcing services as they become increasingly aggregated? Is insourcing positively correlated with consolidation?
4.
How has the No Surprises Act, which took effect 1 January 2022, impacted Envision’s operating environment? How reliant has Envision been on out-of-network billing?
5.
Have you heard anything from the Biden administration or CMS [Centers for Medicare and Medicaid Services] regarding the radiology or anaesthesiology reimbursement environment? There were 9% cuts to interventional radiology reimbursement in 2021. Would you expect further haircuts from CMS or even commercial payers following suit? Which segments could be most exposed?
6.
Could you discuss the current supply and demand environment and staffing dynamics as it relates to Envision? Which specialties are experiencing the greatest staffing shortages?
7.
What’s Envision’s rough reimbursement split across commercial, Medicare, and Medicaid? How do subsequent median levels of reimbursement differ across segments, perhaps using Medicare as a benchmark?
8.
How could Envision’s reimbursement mix trend longer term? The company is subsidising the Medicaid demographic, making up the disparity on Medicare and commercial. That being said, what kind of uptick in the Medicaid demographic could there be longer term from the coronavirus pandemic and/or a macroeconomic recessionary environment? How much of a headwind could such a shift be for Envision’s reimbursement revenues?
9.
What are typical physician attrition rates and how do these vary by specialty?
10.
Could you describe Envision’s compensation structure? What’s the approximate ratio of variable to fixed costs? How has this been trending?
11.
Could Envision pull any other levers to alleviate labor supply and wage inflation pressures? Is a flexible staffing model a meaningful avenue to mitigate these issues?
12.
How much ability does Envision have to increase exposure to higher-margin sub-specialties? What might an optimal specialty mix look like?
13.
To what extent is Envision competing with health systems to acquire physicians? Is that a material pain point for companies such as Envision when trying to recruit or retain staff, especially considering the shortages? How competitive is the market for cardiologists, anaesthesiologists and radiologists?
14.
What are your thoughts on Envision selling its home health business to Amedisys, announced in February 2022? What might have been the strategic rationale behind the divestiture?
15.
What avenues might make sense for Envision to direct the capital proceeds from the sale, as it continues to implement a turnaround strategy?
16.
Could any other structurally lower-growth or financially unhealthy assets be spun off to make Envision leaner as it refocuses on core revenue drivers?
17.
Could you discuss the recent hires of PJT Partners and A&M to help turn around Envision’s business? What do you think their strategy will be?
18.
What initiatives could Envision’s new restructuring consultants implement? What might be an optimal turnaround strategy?
19.
Could you expound on the partnership piece? What would these partnerships look like within an orthopaedic group or health system? You mentioned expanding beyond HCA. What’s important to understand about these arrangements and what benefits could these bring Envision?
20.
Are outcomes-based payment models a significant opportunity to realign Envision’s revenue model to alleviate some of the regulatory, reimbursement, and staffing headwinds?
21.
What are some pain points with proving enhanced patient outcomes? Is it a matter of building clinical data to prove to payers the efficacy of the care model? What would it take for Envision to capitalise on value-based payment arrangements?
22.
What are your updated thoughts on Envision’s competitive positioning vs TeamHealth, Mednax and others? What are some key differences in relative operational structure, specialty mix, and market share?
23.
Could Envision be sold in 2022 if its financial health doesn’t improve? What are some scenario implications and potential buyers?
24.
Is there anything else we haven’t discussed that you want to highlight around Envision?
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