Buttigieg Blames Private Equity Firms for Surprise Billing. One of His Bundlers, a Blackstone Exec, Is Linked to the Problem.

South Bend Mayor Pete Buttigieg’s health care plan takes on the predatory practice of surprise medical billing, which occurs when patients receive astronomical medical bills for health care they received at an in-network facility without knowing that the service or provider was out of network. In his Medicare for All Who Want It plan, the Democratic presidential candidate pledges to ban the practice, also known as balance billing, which he astutely describes as “a deliberate business strategy fueled by profit-driven firms in private equity.”

But Buttigieg is also getting major fundraising help from billionaire Hamilton “Tony” James, executive vice chair at Blackstone, one of the world’s largest private equity firms. Blackstone is an owner of TeamHealth, a hospital staffing company that researchers found to be a key culprit in manufacturing surprise billing schemes that drive up profits for health care companies and burden patients with unmeetable costs. James also sits on Blackstone’s board of directors and has been the chair of Costco since 2017.

James, along with his wife Amie, was identified as one of Buttigieg’s financial supporters when the campaign released a long list of bundlers who have raised at least $25,000 for the campaign earlier this month. Individual Blackstone employees have contributed at least $30,800 to the Buttigieg campaign so far, according to MapLight, a group that studies money in politics. James has given to other Democratic presidential candidates including Sens. Cory Booker and Amy Klobuchar, as well as former Rep. John Delaney. 

Blackstone purchased TeamHealth in 2016, taking it private. According to researchers at Yale University, TeamHealth is one of two companies that “dominates” the “national market for physician outsourcing.” (The other is EmCare.) As of last December, TeamHealth had more than 18,000 affiliated health professionals and delivered around 10 million emergency department cases each year. “After a series of recent acquisitions,” researchers wrote, “TeamHealth is likely to have the largest market share in the physician outsourcing space.” 

That kind of outsourcing, researchers wrote, creates a separation between physicians and medical facilities that makes it easier to move in and out of network and creates an environment that allows for surprise billing. “When TeamHealth receives a new hospital contract,” they wrote, “physicians working for the firm go out-of-network for several months and then rejoin networks while using the now credible threat of out-of-network status to secure higher in-network payments.”

TeamHealth is also one of two major health care groups that funded attack ads from a group called Doctor Patient Unity against popular, bipartisan federal legislation to stop surprise billing, the New York Times reported in September. Still, Blackstone claims that TeamHealth is opposed to the practice but that it favors arbitration — the method preferred by doctors and hospitals to deal with surprise bills — to resolve it. “Blackstone’s portfolio company TeamHealth fully supports banning surprise medical bills through independent arbitration, which has proven successful in New York and has wide, bi-partisan support in Congress,” a Blackstone spokesperson said in a statement to The Intercept. “The company also has a long-standing policy against balance billing patients.”

Other elements of Buttigieg’s health care plan include capping out-of-pocket costs for Medicare; decreasing system-wide spending by encouraging fair pricing, prioritizing patient care over profits, and cutting administrative costs; establishing parity for treatment of mental health and substance abuse; increasing transparency around pricing and service quality; and giving the federal government the tools to fight health care mergers that balloon costs without improving the quality of care. While Buttigieg once said that he supported a single-payer health care system, he has become stridently opposed to it, often criticizing Sens. Bernie Sanders and Elizabeth Warren for their support of universal coverage. 

The Buttigieg campaign said the mayor’s donors don’t change his position on surprise medical billing or other issues. “The only promise any donor will ever get from Pete is that he will use their donations to defeat Donald Trump,” campaign spokesperson Sean Savett said in a statement to The Intercept. “It also means he’s going to disagree with people who donate to his campaign, and push for the policies he has proposed like ending surprise medical billing that he believes are in the best interests of the American people. The stakes in this election are clear and stark — and Pete believes we can’t go into the fight of our lives with one hand tied behind our back.”