Specialist
Former Manager at UnitedHealth Group Inc
Agenda
- Key physician outsourcing and post-acute care services market trends, focusing on Envision Healthcare
- Envision's move to in-network
- Financial impact of Envision's strategies
- Outlook for 2019 and beyond
Questions
1.
What key trends and themes are you following in the physician staffing sector?
2.
Do you think the Lower Health Care Costs Act has affected operations at Envision or TeamHealth?
3.
Have you noticed any trends in terms of RFPs [requests for proposals] and contract retention rates – aside from the two UnitedHealthcare issues we discussed with TeamHealth and Envision?
4.
From a competitive standpoint, what differentiators cause a hospital to go with one physician services provider over another?
5.
The Lower Health Care Costs Act appears to have lost momentum in Congress recently. Do you think it’s likely that it will still be passed?
6.
In Congress the arbitration policy and the benchmark median rate seem to have the most traction. Which do you think we will end up with? What is the timeline of this legislation going into effect, could we expect it by the beginning of next year?
7.
Have you noticed any trends in post-acute care services provided by physician staffing companies?
8.
You mentioned that earnings weakened in 2019 compared to 2018, largely due to lower contract rates with UnitedHealthcare. Do you expect that trend to continue or will that decline eventually decelerate?
9.
Could physician staffing companies still realise any cost savings? How much operational improvement is realistic?
10.
What impact could the balance billing legislation have, could you give us any quantifiable numbers? Either out-of-network rates moving in-network or in-network rates perhaps resetting lower towards Medicare rates?
11.
How much would you estimate the potential revenue or EBITDA impact from balance billing?
12.
What efforts has Envision made to have a greater number of its physicians move in-network, and how do those efforts differ from players such as TeamHealth?
13.
For players such as Envision and TeamHealth, what percentage of their doctors are in-network vs out of network, roughly?
14.
You mentioned the typical payment for these companies on the balance billing is 400-600% of Medicare. Previously we’ve heard Envision physicians were around 500% the Medicare rate, TeamHealth around 400%. Do you think these differing rates represent a stratification between the two companies, and do you think the figures are accurate?
15.
Prior to the contract extension announced last year, how would you characterise the contract relationships between Envision and United? Were the pre-negotiation Envision rates abnormally high relative to other physician service firms?
16.
We usually hear that hospitals lose money on Medicare patients. How do you reconcile that with the intent of Medicare payments to be cost-representative? Where’s the disconnect coming from?
17.
From an investor’s point of view, there could be concerns that the second-order impact of the entire commercial book migrating towards the median rate. Will insurance companies have incentives to contract with providers if the rate has already been determined? How much above that median rate would you estimate TeamHealth and Envision contracts to be? Would the same apply to the percent of Medicaid as well?
18.
When we were discussing potential haircut of revenues on balance billing, you referenced 3-5% in aggregate net vs potentially as high as 20% on the ambulatory side, was that in reference to revenues or margins?
19.
If the bill gets passed, how do you think it will affect Envision and United’s ability to hire doctors?
20.
How would you characterise the hospital operators’ appetite to re-insource physician staffing?
21.
Is it possible that if the Lower Health Care Costs Act passes, there could be an increase in subsidies from hospitals to physician groups? Could some of those revenues be made up through hospital subsidies?
22.
Do you think there will be any way for providers to secure better-than-median rates in a post-balance billing world?
23.
If the median in-network rate method did prevail and was passed by Congress, is there any outside risk to TeamHealth? Given TeamHealth’s exposure to LifePoint and its greater rural footprint with presumably lower reimbursement rates vs Envision with exposure to HCA and its urban footprint with presumably higher reimbursement rates?
24.
Is there anything we haven’t discussed that you think is important to highlight?
25.
What are your thoughts on the changing balance of power among physician staffing organisations, hospitals and payers? As you mentioned, balance billing are nothing new and perhaps the intention towards air ambulatory has raised this, but why is this happening now? Has something changed dramatically to shift the balance of power and weaken physician staffing orgs?
26.
What is your outlook for Envision over the next 12-18 months, and your outlook for physician staffers more broadly in this legislative environment?
