In a bid to save thousands of dollars, a private equity group that runs an emergency physician practice group instead found itself at the wrong end of a $29M judgment. Though a Kansas case, it reflects some of the ongoing struggle between private investment in healthcare and the providers who actually provide that care. It may just be a recent example of physicians biting back at private equity in medicine.

The verdict came from a case of wrongful termination brought by a former ER physician employed by a subsidiary of EmCare, a national emergency physician staffing company. Emcare was contracted by Overland Park Regional Hospital, which touted its new pediatric emergency room as a “24 hour” dedicated pediatric ER. This was inaccurate, however, as for half of those 24 hours each day (from 11PM to 11AM) a single ER physician was splitting their time between the hospital ER and the pediatric ER. That provider was effectively being asked to be in two places at once. And, this was saving the staffing company thousands of dollars it would otherwise be paying to that second physician.

The plaintiff physician complained of the dangerous situation this was creating for hospital and pediatric ER patients, but the staffing company did nothing. He wrote a formal complaint, and instead of rectifying the issue, his employer snapped back at him and asked him to resign. He refused, so it terminated him.

The jury eventually awarded him $29,000,000, finding the defendants had wrongfully terminated him as retaliation for complaining about unsafe staffing practices. This verdict includes $20,000,000 I punitive damages (which are unavailable in Washington state). The verdict was adjusted on appeal, and eventually the staffing companies paid $26,000,000 to the doctor after they exhausted their appeals.

We have written before about private equity moving into medicine, and questioned whether the investors motives – high profits and return on investments – are compatible with healthcare delivery. It turns out sometimes juries have to step in and set things straight.