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Who employs your doctor? Increasingly, a private equity firm

nytimes.com

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Re: Who employs your doctor? Increasingly, a private equity firm

#21

Post by gruez »

balderdash wrote: post #7

I’m the furthest thing from having any knowledge here, but it feels like it should kind of be like how law firms can only have lawyers be owners with the idea that owners need to be aligned with codes of professional conduct/ethical obligations to clients etc

That model works well for professional services (eg. lawyers, accountants, consultants) because require very little capital. Everything from the office they work in, to the computers they type on can be leased. The same can't be said for hospitals, which cost hundreds of millions to build and equip. How are you going to raise all that capital from only the doctors? They're rich, but not that rich. Moreover, the payback on said investment is on the order of decades. A doctor late in their career has the most to invest, but they're also nearing retirement. What are you going to do with their shares? Sell them to newly graduated doctors who are hundreds of thousands in debt? Let them keep them, at which point they turn into quasi-investors?

Re: Who employs your doctor? Increasingly, a private equity firm

#22

Post by starcraft2wol »

alach11 wrote: post #4

When possible, I prefer people who work for me to have incentives that are aligned with mine. PE-owned medical practices and even many private practices throw that out the window, with financial incentives to do procedures or run tests. I was talking to my wife’s obstetrician about this last week and he also feels strongly about it. He’s paid a flat salary and gets no financial benefit for a c-section vs. an inductio…

> gets no financial benefit for a c-section

I don't think that's typical anywhere. The incentives they face are less concrete. It may be more inconvenient or uncomfortable for the doctor. If something goes wrong and there is a legal risk, it's difficult to retroactively justify not immediately changing strategies.

Re: Who employs your doctor? Increasingly, a private equity firm

#24

Post by starcraft2wol »

verteu wrote: post #3

Reminds me of "Does Private Equity Investment in Healthcare Benefit Patients?" [1]. > Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases…

As they acknowledge, this factor is extremely difficult to isolate from demographics, geography, religion, etc.

Re: Who employs your doctor? Increasingly, a private equity firm

#25

Post by gruez »

tsunamifury wrote: post #11

PE is essentially buying all needs of a first world human. Medicine, homes, essential services, farmland, in an attempt to extract margin from the last possible places they can. It feels like we’ve re entered the 80s again but worse where now we have 100 billionaires buying up farmland under the guise of it being better that they own it rather than the farmers for… reasons. I think this is essentially late stage capi…

>It feels like we’ve re entered the 80s again but worse where now we have 100 billionaires buying up farmland under the guise of it being better that they own it rather than the farmers for… reasons.

I don't get it. Are the billionaires buying the land from the farmers at gunpoint? If it's so disastrous for the farmers to sell, why did they sell in the first place?

Re: Who employs your doctor? Increasingly, a private equity firm

#27

Post by rcme »

darth_avocado wrote: post #20
CamelCaseName wrote: post #8

Earlier quoted context omitted.

This is true for the veterinary world, probably other professions too. The result is that a veterinarian owns the business on paper, but the PE fund can take over or replace them as needed.

The veterinarian world is doomed. Increasingly PE is taking over entire neighborhoods when it come to vet hospitals. This is led to increased wait times, lower standards of care, higher cost to consumers and higher pet mortality rates. That can very well translate to human healthcare.

But the barriers to starting a new vet are pretty low. If existing vets are inadequate, new ones can start.

Re: Who employs your doctor? Increasingly, a private equity firm

#28

Post by Retric »

dazc wrote: post #13
recursivedoubts wrote: post #9

america, unsatisfied with spending vastly more privately on healthcare than the rest of the world, while also spending more publicly on healthcare than the rest of the world, continues to find ways to make healthcare yet more expensive and ruinous for its citizens.

Maybe true but, for the rest of the world, you're still the 'go-to' place where medical miracles can happen. Money had something to do with this.

That is more a function of the size of the US medical system than its overall quality. The average American is going to whatever hospital is closest when they have an emergency, but if you’re healthy and wealthy enough to go anywhere then you can pick and choose extreme outliers. Large countries simply have more extreme outliers in both directions.

More US citizens seek treatment outside the US than foreign nationals seek treatment inside the US. But, people have specific diseases and sometimes the best treatment is inside the US, though more often it isn’t.

Re: Who employs your doctor? Increasingly, a private equity firm

#29

Post by goodpoint »

starcraft2wol wrote: post #22
alach11 wrote: post #4

When possible, I prefer people who work for me to have incentives that are aligned with mine. PE-owned medical practices and even many private practices throw that out the window, with financial incentives to do procedures or run tests. I was talking to my wife’s obstetrician about this last week and he also feels strongly about it. He’s paid a flat salary and gets no financial benefit for a c-section vs. an inductio…

> gets no financial benefit for a c-section I don't think that's typical anywhere. The incentives they face are less concrete. It may be more inconvenient or uncomfortable for the doctor. If something goes wrong and there is a legal risk, it's difficult to retroactively justify not immediately changing strategies.

It's actually typical in some countries, and it's mean to avoid the conflict of interest around prevention VS selling treatments.

Re: Who employs your doctor? Increasingly, a private equity firm

#30

Post by synetic »

starcraft2wol wrote: post #24
verteu wrote: post #3

Reminds me of "Does Private Equity Investment in Healthcare Benefit Patients?" [1]. > Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases…

As they acknowledge, this factor is extremely difficult to isolate from demographics, geography, religion, etc.

But it is not difficult to isolate from common sense. No one should profit from denying someone healthcare. All systems have ration care but it is immoral for someone to profit by denying care. Profit motive does not make for a good healthcare system.
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