In the late twenty-tens, local news outlets around the country began reporting on cases of surprise medical billing: patients who had been treated in hospitals that accepted their health insurance later received much larger bills than they were expecting. In one extreme instance, a forty-four-year-old schoolteacher in Austin, Texas, was admitted to a hospital after a heart attack, assured his insurance was accepted, and then received a hospital bill for $108,951. When patients complained, they were told that one or more of the doctors who had treated them at the hospital—an anesthesiologist, say, or a radiologist—was not actually in their insurance company’s network. In emergency situations, in which a patient was rushed to the E.R. by ambulance, there was no opportunity to disclose this or get consent. But some patients said that, even in cases of elective surgery, they weren’t given an opportunity to find a doctor who was covered by their health plan. The frequency and severity of the practice seemed to be increasing.

Outrage over surprise billing transcended partisan lines. A poll conducted by the Kaiser Family Foundation indicated that more than seventy-five per cent of the public wanted the government to do something to prevent it. Congress members starting hearing complaints from their constituents. In early May, 2019, even President Trump expressed a desire to address the practice, saying during a speech, “We are determined to end surprise medical billing.” That July, Democrats and Republicans in the House Energy and Commerce Committee introduced a bill, called the No Surprises Act, that would require medical providers to give patients twenty-four hours’ notice if they were going to be treated by a medical provider who was outside their insurance network, and would create a benchmark to restrict how far above the median price out-of-network providers could charge. In June, senators had introduced a similar bill, called the Lower Health Care Costs Act, which included an arbitration provision that would help manage disputes over how much out-of-network providers would be permitted to charge. One of the bill’s sponsors, Lamar Alexander, Republican of Tennessee, had been contacted by a father in Knoxville who had taken his son to an emergency room after a bicycle accident; the father paid a hundred-and-fifty-dollar co-pay but later received a bill for eighteen hundred dollars from the doctor, who was out of network.

The legislation seemed sure to pass. But, soon after the Senate version was introduced, a barrage of television ads criticizing the bills appeared across the country. The ads were slickly produced and ominous-sounding; they described the bills as “government rate-setting” that was likely to shutter hospitals and endanger lives. In one, a pair of emergency responders rush a bloody sixteen-year-old strapped to a gurney through the doors of a hospital, only to find that it has closed. Some highlighted the profits that insurance companies made in 2018—in the billions of dollars—and suggested that these companies were responsible for the surprise bills, and that they should be the ones to face increased regulation. At the same time, mailers were sent to people’s homes, and hundreds of thousands of dollars’ worth of ads appeared on Facebook. The ads all urged people to tell their representatives in Congress to vote against the bills. The campaign was paid for by an organization called Doctor Patient Unity, which was classified as a dark-money group and did not disclose its staff or where it got its money.

Eileen Appelbaum, an economist, had been following the saga, and thought she knew who might be behind the ads. Appelbaum has hazel eyes and speaks with passion about the intricacies of financial engineering. She taught for many years at Rutgers University and is now the co-director of the Center for Economic and Policy Research, a Washington, D.C., economic-policy think tank. Much of her research has focussed on the ways that private-equity firms—investment funds that purchase companies and try to increase their profitability—reshape the businesses that they buy. Appelbaum and her frequent collaborator, Rosemary Batt, a management and labor-relations expert at Cornell University, were in the midst of a research project looking at the role of private equity in health care. They knew that two of the largest private-equity firms, Blackstone and K.K.R., owned Envision Healthcare and TeamHealth, large physician groups that staff hospitals around the country with doctors; they found that bills from doctors within those groups were responsible for much of the sudden increase in surprise medical bills. (A spokesperson from TeamHealth said that the company does not send out-of-network charges directly to patients, but litigates them with insurance companies. A spokesperson from Envision Healthcare declined to comment.) “We already knew a lot about P.E. buying up doctors’ practices,” Appelbaum told me recently. “Now surprise medical bills were out of sight. That’s their business model.” Appelbaum suspected that the P.E. companies were behind the practice, as well as behind the ad campaign to stop the legislation.

Appelbaum grew up in Philadelphia, where her father ran an appliance store. Neither of her parents had gone to college; Appelbaum earned a master’s in mathematics and a Ph.D. in economics from the University of Pennsylvania. Her research centered on the relationship between workers and a company’s management. When Appelbaum started out, the prevailing view was that companies could make themselves more productive by investing in their workers. In the nineteen-nineties, she and Batt undertook a study and found that, for example, giving workers more decision-making authority over how work got done led to increased company profits.

The book that they produced from this research, “The New American Workplace,” was published in 1993. But in the years after, the thinking in the business world shifted. A newly dominant business philosophy, called “shareholder value theory,” held that companies exist primarily to deliver profits to their shareholders, and that managers should increase revenue and cut costs, with little regard for the long-term effects. Appelbaum and Batt saw this playing out in the real world. In many cases, companies were sending work to other countries where labor costs were lower. In others, they were practicing “domestic outsourcing”: subcontracting out parts of their businesses to other U.S.-based companies, to run their accounting departments, corporate cafeterias, or janitorial services, among others, rather than employing those workers directly. “They moved away from the idea of, How do we make our current workforce more productive? and to, How do we move workers off our payroll and onto a contract company? And then they can do whatever they want with the workers,” Appelbaum said. “And, if you’re a contract company, how do you get the contract? By being the lowest bidder. You’re at rock bottom, offering just barely enough to attract any workers at all.”

Appelbaum and Batt found that the pressure for these practices seemed to be coming from Wall Street analysts and shareholders. “People had a very old view of what the corporation was, as a kind of stand-alone, publicly traded entity, free to make decisions on its own,” Batt told me. “We understood globalization, deregulation, and labor markets, but we didn’t understand capital markets. There was this big hole in the academic research.” The 2008 financial crisis made the issue seem even more pressing, and they decided to focus their research on private-equity funds. “You needed to look at the most extreme example if you wanted to understand the idea,” she said. They endeavored to write a book about private equity aimed at people who dealt with labor issues, including union leaders, who often didn’t realize that, when they were negotiating with corporations over contracts and working conditions, the managers of private-equity firms were actually pulling the strings.