Envision Healthcare has restructured its operations as part of the Chapter 11 bankruptcy process and reduced its debt by more than 70%, the physician staffing company said Friday.
Envision filed for Chapter 11 bankruptcy protection in May, entering into a restructuring support agreement for about $7.7 billion in debt. The bankruptcy filing followed months of financial turmoil due to multiple payer lawsuits, rising labor costs and impacts from the No Surprises Act, which cut into much of Envision's profits from out-of-network bills. A federal bankruptcy court approved Envision's restructuring plan Oct. 11.
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As part of the restructuring, Envision is operating separately from Amsurg, formerly its ambulatory surgery unit. In a news release, Amsurg President and CEO Jeff Snodgrass called the transition "an exciting new era" at "a critical point" in the operation's history.
Envision named Chief Financial Officer Henry Howe as its interim CEO, effective Dec. 1, replacing CEO Jim Rechtin, who will join Humana in January as president and chief operating officer before taking over as CEO during the second half of 2024. Envision's board is searching for a permanent replacement.
Envision was acquired by private equity firm KKR in 2018.
Healthcare staffing companies have struggled since the end of the COVID-19 pandemic, experiencing less demand for contract labor and compressed margins. Industry watchers say labor challenges are part of a larger market reset, and while some won't be able to withstand that reset, staffing companies in general will continue to play an important role in healthcare.