Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Outside a Florida hospital's emergency department. Photo: Jeffrey Greenberg/UIG via Getty Images

KKR's $10 billion deal to take Envision Healthcare private, along with Bloomberg's deep dive on the billing tactics of air ambulances, exemplifies private equity firms' appetite for buying health care providers that wield a lot of market power.

The big picture: These companies are a leading source of surprise medical bills, which infuriate patients but are profitable for private equity owners. Emergency rooms and ambulances aren't real marketplaces — consumers can't stop and shop for the best price in the middle of an emergency.

The bottom line: Physician groups, emergency room staffing, and air and ground ambulances can (and in most cases do) make a lot of money because people will use their services regardless of the price.

  • Physicians and ambulances can opt out of an insurance company's network, unbeknown to a patient, if they feel they aren't getting paid enough — and patients are saddled with the remaining costs.
  • "If you're willing to engage in some fairly unsavory billing practices, (these services) could be quite lucrative," said Zack Cooper, a Yale health economist who has studied out-of-network billing.
  • Physician and ambulance groups contend they need to bill commercial insurance more to make up for shortfalls in Medicare and Medicaid, but that cost-shifting theory often falls flat.
  • "Unless they can point to a credible study of a causal connection between public payer rates and private ones, I would not believe cost shifting exists in this market," health economist and New York Times Upshot contributor Austin Frakt said in an email when asked about air ambulances.

Driving the news: Before the KKR-Envision deal, private equity flocked to health care knowing the profit potential.

  • KKR bought Envision's ground ambulance subsidiary last year for $2.4 billion.
  • Blackstone Group bought TeamHealth, a competitor to Envision, in 2016 for $6.1 billion.
  • Air Methods was bought out by American Securities last year in a deal valued at $2.5 billion.
  • Private equity firms are reportedly circling Mednax.
  • Specialty physician groups also are receiving a lot of private equity interest based on the patients they treat.

The big question for the latest KKR deal: Will Envision stay transparent about its efforts to reduce surprise medical bills? Going private means health care groups don't have to disclose a whole lot about their finances or strategy.

  • KKR did not respond to questions. Envision said in a statement it would live up to its pledge to move almost all of its out-of-network contracts to in-network contracts by the end of this year.
  • Sen. Claire McCaskill still has not updated the public about her inquiry into Envision's billing practices.

Looking ahead: Private equity owners don't have incentives to eradicate out-of-network practices, which Cooper called the "ugly pockets of the U.S. health care system."

"That's just discouraging, and it makes people want to go to single payer," Cooper said.

Go deeper

Updated 1 hour ago - Sports

Olympics dashboard

Team USA's Simone Biles during the women's team final on day four of the Tokyo 2020 Olympic Games at Ariake Gymnastics Centre on Tuesday in Japan. Photo: Fred Lee/Getty Images

🤸🏾‍♀️: Simone Biles reacts to "love and support" after withdrawing from all-around gymnastics and team finals, citing her mental health

🏃: U.S. pole vaulter Sam Kendricks withdraws from Games after positive coronavirus test

🏊‍♂️: Caeleb Dressel wins gold in men's 100m freestyle —Bobby Finke wins gold in first men's Olympic 800m freestyle

📷: In photos: Tokyo Olympics day 6 highlights

🗓: The Olympic events to watch today

💵: Olympic athletes see more sponsorship opportunities

🏃‍: Female Olympians push back against double standard in uniforms

Go deeper: Full Axios coverage - Medal tracker

Felix Salmon, author of Capital
2 hours ago - Economy & Business

Giant earnings growth for the world's largest companies

Illustration: Aïda Amer/Axios

Never in the history of capitalism have the world's biggest companies grown as fast as the tech giants in recent years.

Why it matters: A series of stunning earnings reports this week — with another one likely to arrive Thursday afternoon, from Amazon — has underscored the astonishing growth among a group of companies that were already some of the most profitable of all time.

Biden administration outlines goals to slow migration

Vice President Kamala Harris speaks during a press conference in Guatemala City on June 7. Photo: Jim Watson/AFP via Getty Images

Vice President Kamala Harris has big goals for improving conditions in Central America to help slow migration from the region toward the United States.

Driving the news: Senior administration officials unveiled five sweeping goals during a call on Wednesday: Bettering economic prospects; rooting out corruption; promoting human rights, labor rights, and a free press; preventing gang violence; and combating sexual, gender-based and domestic violence.