Envision Healthcare has filed for chapter 11, beginning one of the largest healthcare-related bankruptcy cases ever and likely wiping out the $3.5 billion stake that private-equity firm KKR acquired in the physician-staffing company in 2018, WSJ Pro Bankruptcy reported. KKR’s loss on Envision would be among the steepest write-downs the private-equity firm has swallowed in recent years and highlights some of the continuing instability in the healthcare industry. KKR has already written off its investment in Envision. KKR and its co-investors bought Envision hoping to expand its business of helping hospitals staff emergency rooms and other departments. The company was taken private for almost $10 billion including debt, with KKR and co-investors’ stake in the company worth around $3.5 billion. But, in recent years, Envision has faced a litany of headwinds. High labor costs, the lingering effects of the pandemic and a contract dispute with insurer UnitedHealth Group took their toll on the company. Envision was also embroiled in a costly public fight over federal legislation that took aim at part of the company’s business model by banning healthcare providers from going after patients for bills that their insurers refuse to cover. A new management team installed in 2020 suffered from a “whiplash-inducing onslaught of obstacles and complications,” Chief Restructuring Officer Paul Keglevic said in a Monday court filing.
