whytho987654 said:

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tysker said:

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whytho987654 said:

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tysker said:

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Go on then, educate me how PE making money off of emergency med docs, who are working grueling and demanding shifts, benefits society and is not predatory. A 16 hour day behind a desk is much different than a 12 hour day dealing with combative patients that requires 7+ years of post-college training and knowledge

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Doctors have some of the highest occupational barriers of entry. How much of their day-to-day work can be done by cheaper labor?

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Not a doctor, but I wouldn't want any medical procedure or treatment done/given to me by someone that's not a physician. There's a reason they have high standards even if the procedure that they are doing is simple, complications can arise in the most simplistic cases and I wouldn't take that chance, and its dangerous to subject people to that risk as well.

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Thats because you can afford it. Not everyone can.
IMO, not every case needs to be seen by a physician and not every Rx needs to signed off by a physician. Sometimes RNs, PAs, and even tech do just as good a job as the MDs. Those "standards" are only there to protect MDs, who are often paid through opaque insurance payouts or through government transfer payments.

You're problem should lay with the convoluted insurance and government sponsored medical programs that be so easily exploited by the PE firms.

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This is laughable, those standards are to protect people from unqualified people pretending to be doctors. A normal check-up showing nothing is wrong with you might seem like an RN, NP, PA, or janitor could do it, but you are getting a legal document with the physician's liability tied to that. Also, the breadth of knowledge is not comparable. Had an NP one time tell me a skin nodule I had was fine and not to worry, went to a dermatologist for an unrelated issue a couple of months later and was told the skin lesion was precancerous. Had it removed easily with no follow-up needed. If I had just listened to the NP for what I thought was a routine thing, I could have ended up with cancer. So no, they do not even compare to physicians, its like comparing flight attendants to pilots. Would you want a PA NP cracking open your chest, giving you a colonoscopy, or replacing your knee/hip? I sure don't. Someone could argue that a secretary or warm body from McDonald's could replace 99% of the jobs that most posters here do with that same logic.

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You are suffering from expertise bias. Again you can afford all the treatments you want form the most expensive physicians. Not everyone has that option and need other solutions.

I wouldn't want a PA to 'crack open my chest' but I would accept a PA to reconfirm and refill my topical ointment Rx. NO need for me to see a MD (again) and be charged $100 for a ten minute visit. That's a waste of money, imo. I want more choice in my medical providers.

You mentioned in a thread some time ago that:

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Add in the malignant proliferation of NPs (99% are terrible) and other "advanced practitioners" and administrative bloat and you have one giant turd of a system.

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You called the healthcare system a giant turd, full of terrible nurse practitioners and administrative bloat.

Many times, the role of PE firms is to identify inefficiencies and bloat, and get rid of it. Your doctor friends seem to be picking up the slack for the 99% of terrible NPs and not enjoying the result.

Maybe the PE firms are misidentifying the inefficiencies and bloat but at least you and they agree that it exists.

So glad you posted this.
The medical field is full of people doing forms.
Just how large General Contractors are "accounting firms" that manage trades, the medical field is the same way.

I have observed that medical doctors hire women to do their billings.
These MDs go to school for years and are perfectly find with handing over their revenue steam to someone with a high school education and legacy training. And when these women's practices are questioned by someone with insurance training, then the MD backs up his staff who are most often using out dated information.

I'm guessing OP thinks single payer through the gov't is the only solution.

Sims said:

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You mentioned in a thread some time ago that:

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Add in the malignant proliferation of NPs (99% are terrible) and other "advanced practitioners" and administrative bloat and you have one giant turd of a system.

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You called the healthcare system a giant turd, full of terrible nurse practitioners and administrative bloat.

Many times, the role of PE firms is to identify inefficiencies and bloat, and get rid of it. Your doctor friends seem to be picking up the slack for the 99% of terrible NPs and not enjoying the result.

Maybe the PE firms are misidentifying the inefficiencies and bloat but at least you and they agree that it exists.

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Or they exploit it, just as they are doing with the housing market. I am a capitalist, but not full-on laissez faire, Teddy Rosevelt would not allow PE to proliferate and he would be in favor on introducing and keeping standards (ie not letting NPs practice something they know nothing about). What we are doing right now with government corruption and the push for socialism, while at the same time letting PE proliferate is not sustainable

What do those Admin costs stem from then? Funny how bureaucratic costs rise when government gets involved in the industry (just like higher education, right).

How many of those costs are actually MDs, taking on administrative roles to avoid malpractice concerns and those grueling 16 hours?

Again it seems the opacity of insurance and government payment systems for which PE firms can leverage knowledge and technology is your problem.

whytho987654 said:

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One thing I see overlooked on this forum is the rise of private equity. As we argue about ukraine, biden, electric power etc, private equity is quietly buying up all sorts of businesses creating monopolies notably in healthcare and housing. I think PE might be the biggest threat to our country that isn't talked about, and I never see it discussed on any news outlet, mainstream or not

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I might reshape the criticism: it's not that people are investing in things. That's necessary. But the consolidation of industries and markets that is too far gone to ever return to diversified, freedom of choice we had.

tysker said:

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evestor1 said:

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tysker said:

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Quote:

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Go on then, educate me how PE making money off of emergency med docs, who are working grueling and demanding shifts, benefits society and is not predatory. A 16 hour day behind a desk is much different than a 12 hour day dealing with combative patients that requires 7+ years of post-college training and knowledge

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Doctors have some of the highest occupational barriers of entry. How much of their day-to-day work can be done by cheaper labor?

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laugh out loud - PE will absolutely create lower wages for docs via incentive contracts...


spoiler alert - the PE company will try very hard to back out of these incentives and docs are just left with lower wage and looking for new work.

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Are the medical services doctors are providing worth the wages they earn? We would expect the lower wages can be pass through as lower costs to the consumers and taxpayers. Isn't that a good thing?

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there is absolutely no chance lower wages to doctors will conclude with lower prices for patients (end customers)

it will probably result in lower cost for insurance companies (most important customer)

whytho987654 said:

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Sims said:

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You mentioned in a thread some time ago that:

Quote:

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Add in the malignant proliferation of NPs (99% are terrible) and other "advanced practitioners" and administrative bloat and you have one giant turd of a system.

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You called the healthcare system a giant turd, full of terrible nurse practitioners and administrative bloat.

Many times, the role of PE firms is to identify inefficiencies and bloat, and get rid of it. Your doctor friends seem to be picking up the slack for the 99% of terrible NPs and not enjoying the result.

Maybe the PE firms are misidentifying the inefficiencies and bloat but at least you and they agree that it exists.

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Or they exploit it, just as they are doing with the housing market. I am a capitalist, but not full-on laissez faire, Teddy Rosevelt would not allow PE to proliferate and he would be in favor on introducing and keeping standards (ie not letting NPs practice something they know nothing about). What we are doing right now with government corruption and the push for socialism, while at the same time letting PE proliferate is not sustainable

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Have your doctor friends ever considered buying the practice that is being so poorly run? Looking at some of your posting history, I would agree that you don't have a socialist bent necessarily. At the end of the day though, part of change that is needed is not to just point at PE and scream foul.

I get the sense, and maybe I'm wrong, is that your concern is that business minded folks with strictly a profit motive are running healthcare the wrong way. I do think the poster that mentioned an expertise bias is on to something. A hospital run strictly with a profit motive will fail. A hospital run with no profit motive at all will fail. The balance is worth fighting for. I say that having been on a the board of directors for a hospital system for 7 years.

tysker said:

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What do those Admin costs stem from then? Funny how bureaucratic costs rise when government gets involved in the industry (just like higher education, right).

How many of those costs are actually MDs, taking on administrative roles to avoid malpractice concerns and those grueling 16 hours?

Again it seems the opacity of insurance and government payment systems for which PE firms can leverage knowledge and technology is your problem.

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You are right that the government has caused this. Once they got involved in medicine admin blew up, not a coincidence. Now, who do you think our government colludes with? Private equities often operate with 0% interest rates, so they can buy buy buy. PE could very well be an extension of the elite ruling class is the point I am trying to make. A young physician out of residency with 300k of student debt cannot compete with a PE bankrolled by elite wealthy people and politicians. Also, private equity likes the admin bloat and complexity of billing, it makes it harder for physicians to own their own practice this way. We used to be a nation of opportunity, now we will be a nation of living under the thumb of megacorporations and renters

For every asset or business that PE purchases there must have been a seller.
I'm just a caveman, but it seems like blaming PE is a bit of a bogeyman.

Sims said:

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whytho987654 said:

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Sims said:

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You mentioned in a thread some time ago that:

Quote:

---

Add in the malignant proliferation of NPs (99% are terrible) and other "advanced practitioners" and administrative bloat and you have one giant turd of a system.

---

You called the healthcare system a giant turd, full of terrible nurse practitioners and administrative bloat.

Many times, the role of PE firms is to identify inefficiencies and bloat, and get rid of it. Your doctor friends seem to be picking up the slack for the 99% of terrible NPs and not enjoying the result.

Maybe the PE firms are misidentifying the inefficiencies and bloat but at least you and they agree that it exists.

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Or they exploit it, just as they are doing with the housing market. I am a capitalist, but not full-on laissez faire, Teddy Rosevelt would not allow PE to proliferate and he would be in favor on introducing and keeping standards (ie not letting NPs practice something they know nothing about). What we are doing right now with government corruption and the push for socialism, while at the same time letting PE proliferate is not sustainable

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Have your doctor friends ever considered buying the practice that is being so poorly run? Looking at some of your posting history, I would agree that you don't have a socialist bent necessarily. At the end of the day though, part of change that is needed is not to just point at PE and scream foul.

I get the sense, and maybe I'm wrong, is that your concern is that business minded folks with strictly a profit motive are running healthcare the wrong way. I do think the poster that mentioned an expertise bias is on to something. A hospital run strictly with a profit motive will fail. A hospital run with no profit motive at all will fail. The balance is worth fighting for. I say that having been on a the board of directors for a hospital system for 7 years.

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I agree a balance is needed, I'm just griping about the formation of new monopolies under the guise of PE. Everything PE has gotten involved in within the past 5 years has coincidentally increased substantially in price. The .1% in PE is getting rich, while the majority of americans are getting screwed over by them. PE is just as bad as those in washington pushing for socialism, as both result in the consolidation of wealth in the top .5% or whatever

Put in business terms, PE's seek to increase barriers to entry allowing higher profit margins due to lower competition. Those higher profit margins are achieved on top of added operation costs. So consumers are hit twice. Once by lack of competition and again by higher operation costs.

texagbeliever said:

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Put in business terms, PE's seek to increase barriers to entry allowing higher profit margins due to lower competition. Those higher profit margins are achieved on top of added operation costs. So consumers are hit twice. Once by lack of competition and again by higher operation costs.

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Put a different way...barriers of entry can exist in various forms.

The most obvious of which is regulatory and stems from the government...not PE. PE firms can certainly lobby for those barriers to be created to insulate themselves but as mentioned previously it's PE coopting the government in their favor. If we would dismantle some of the government regulatory and licensing barriers, the PE firms lose some arrows in their quiver.

Another barrier of entry is capital. This is either solved through public financing...or *gasp* private equity.

I think most here will agree that PE firms can use government to their advantage and do so in a way that is detrimental to most inside of the system other than the firm itself. PE firms motives are typically pretty clear...make money. The fact that we give them tools that they use selfishly to their own favor isn't necessarily their fault. Whytho mentioned PE firms are an extension of the elite and yes, I certainly agree there. It's a revolving door between government and some of the larger firms.

Regulation, artificially low interest rates, crony capitalism all play a role and these are certainly things that get pretty frequent play on this board.

texagbeliever said:

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Put in business terms, PE's seek to increase barriers to entry allowing higher profit margins due to lower competition. Those higher profit margins are achieved on top of added operation costs. So consumers are hit twice. Once by lack of competition and again by higher operation costs.

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Most PE playbooks are actually:

1) Providing growth capital to venture companies that are achieving success, but need more capital to grow quicker;

2) Trimming the fat out of companies that are poorly run. Particularly good opportunities are often found when the companies are run by the children of the founder of the company, who are mostly just collecting a paycheck and not watching the hen-house; or

3) Rolling up smaller businesses with high relative overhead costs into a more efficient organization with more economies of scale. These are typically businesses that have a great customer base due to a good product or service, but are paying for things like a sales staff that would be more efficient if the product / service was rolled into a larger catalog of offerings.

The idea that PE is trying to control the market is laughable. It is more likely that a company that is owned by a large player trying to control the market and making excess profits has some of their top employees quit and start a competing business. The leaner, more efficient smaller company then starts to win business, and needs to expand. A PE fund comes in and provides the entrepreneurs more capital to expand quicker, gaining even more market share from the lazy, poorly run company.

Nitro Power said:

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whytho987654 said:

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One thing I see overlooked on this forum is the rise of private equity. As we argue about ukraine, biden, electric power etc, private equity is quietly buying up all sorts of businesses creating monopolies notably in healthcare and housing. I think PE might be the biggest threat to our country that isn't talked about, and I never see it discussed on any news outlet, mainstream or not

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Further to this point, all of the experiences I have had with PE has been a disaster. They buy companies and then focus on bigger profits than maintaining the model the encouraged them to purchase a company in the first place.

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Welcome to the 1980's and the "hostile takeover"...

Is this really something new?

evestor1 said:

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I dislike PE companies as well.

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Especially the ones that made the red dodge balls. Those HURT!!!

DeLaHonta said:

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whytho987654 said:

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CDUB98 said:

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Please provide examples of PE destroying the medical industry.

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Private Equity Gloats Over A Doctor Glut (levernews.com)
one of many examples. Just look at private equity run private practices compared to true private practices, huge difference in the way they treat patients
Private Equity Taking Over Healthcare and Doctors losing Control . . . - Angry Bear (angrybearblog.com)

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Shouldn't you be more upset at the practices that sold themselves to a PE firm instead of the PE firm itself? It's not like the doctors were forced to sell.

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You're both right. I am essentially a solo practitioner, but I practice within the confines of a 20-M.D. group (Stark compliance is a *****). We contract and bill and collect as a group, but share as little of our overhead as is possible under Stark rules. Our group has been pitched to by multiple PE groups, to varying interest amongst our Members. The PE groups buy you out after valuing your practice, pay you up front in some blend of cash (taxed as Capital Gains and not Ordinary Income) and stock and stock options. With every pitch, the "second bite" is the carrot held out for being a good boy or girl and staying on, when the PE company is sold out to what I would term The Greater Fool, ostensibly for a multiplier. Another nameless, faceless group who thinks their own system is going to streamline your workflow and deliver magical profits previously unseen. Those in the group exactly 5 years from retirement seem the most interested in the deal. Sell out, cash out, walk away.

Personally, I tend to believe in the general economic and political beliefs of Distributism (see below), and this goes against it. Being a solo practitioner, if I start delivering sloppy or untimely service, if I hire and maintain employees who aren't polite to my patients, I suffer. Much less so under an employed physician model (be it by a hospital system or a PE firm). The further the physician is away from ownership of the means of production (his or her office), the less inclined he or she is to take an active interest in making sure good services are provided. My $0.02 - for now.

Distributism

Nitro Power said:

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whytho987654 said:

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One thing I see overlooked on this forum is the rise of private equity. As we argue about ukraine, biden, electric power etc, private equity is quietly buying up all sorts of businesses creating monopolies notably in healthcare and housing. I think PE might be the biggest threat to our country that isn't talked about, and I never see it discussed on any news outlet, mainstream or not

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Further to this point, all of the experiences I have had with PE has been a disaster. They buy companies and then focus on bigger profits than maintaining the model the encouraged them to purchase a company in the first place.

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yep, all these PE companies are owned by the same people that control our politicians, this is all part of the plan, covid, then huge inflation means many business's are struggling, hence PE comes in and buys them up cheap, they control everything, its all part of the plan to take wealth out of the system. Its all right there in front for people to see. Hell, just look at all the retail places that have folded, every shopping center has vacancies these days, its terrible.

The Collective said:

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There must be a lot of PE money that was sidelined out in the market right now - we were trying to add an acquisition or two and were seeing prices at 16-20x EBITDA earlier this year. No thanks.

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Same. I'll let my competitor participate at 16x and just buy them out of bankruptcy.

TxTarpon said:

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These MDs go to school for years and are perfectly find with handing over their revenue steam to someone with a high school education and legacy training.

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The front offices -- and back offices -- of most medical practices could use some serious reform and upgrading.

I love my primary care doctor, but his staff is the worst. And in all my visits to various docs with elderly relatives, I haven't seen much better.

If private equity can modernize some of these antiquated setups and eliminate the jobs filled with Acme School of Health Professions "graduates" sporting neck tattoos and surly attitudes, I'm all for it.

BigRobSA said:

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evestor1 said:

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I dislike PE companies as well.

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Especially the ones that made the red dodge balls. Those HURT!!!

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Underrated post. Deserves more stars.

CDUB98 said:

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Please provide examples of PE destroying the medical industry.

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Blame it on Obamacare.

'Obamacare Nixes Doctor-Owned Hospitals'

https://www.nationalreview.com/corner/obamacare-nixes-doctor-owned-hospitals-matthew-shaffer/

Most of them give everyone else who works in Finance (like me) a bad name. Something like venture capital on the other hand tends to have different motivations.

Just a couple of hours ago, I received notice that the large group of anesthesiologists I work with most closely settled an "amicable divorce" with Envision Physician Services. The group was extremely successful for decades and they sold out to private equity years ago. It caused a lot of bad feelings and they lost a lot of staff as, of course, the senior guys took the cash and ran after 5 years and the younger folks took an unwanted haircut or they just left. Fast forward to at least two "flips", the group made an "amicable divorce" from the group and will now be employees of the hospital. A few of the texts I have received tonight from my colleagues involved in the divorce:

"Envision couldn't make us profitable, which is very impressive as our volume and payor mix are quite good".
I know that to be true. Very reputable group affiliated with the most reputable hospital in the region, lots of insured O.B. and outpatient surgery centers and pain clinics in addition to hospitals located on the nicer side of town.

"KKR is particularly destructive of the healthcare groups they've acquired according to my daughter who has been involved in similar deals with them in New York".

Since they sold out years ago, the group no longer had the infrastructure in place to negotiate contracts and do billing and collecting. So they now will be employed by the hospital they provide services for.