291–300 of 415 posts
To me it seems like PE has simply discovered a loophole in the system. We want a system where creating value for people is rewarded, but PE has found a way to legally get the rewards without improving society. Normally this is called a scam or a fraud, and there are laws for standard stuff like taking people's money without giving them what you promised. For PE however, they've found a way around it, using the machin…
I think it should be illuminating to balance narratives like this with simple questions along classical economic lines: 1. Why is private equity ending up with all these resources? Who is selling to them and why? Why didn't this happen before? It's not like PE is new. 2. When PE loads up a firm with supposedly unsustainable billions of debt, someone is on the other side of that transaction, lending the billions. Who…
2 - its usually employees, and sometimes even customers, who are non equity shareholders but long term beneficiaries of the health of the company. Workers usually are not organized well enough to repel a a saavy PE firm. But careful, in some cases, PE may be liberating a firm being sucked dry from low-productivity workers or richly paid pensioners. Its hard to know which is which unless you are diving into the details.
PE is not wrong, just like unions are not wrong, but what matters is what is their management style. Parasite, or builder?
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Full disclosure, I don't work in finance, so I may be getting a bunch of this wrong. > Why is private equity ending up with all these resources? Because they have cash, mostly from pension funds and insurance companies. > Who is selling to them and why? The doctors running the practices, more generally they're rolling up companies in relatively dispersed industries where they believe they can make money. In the best…
On the last point, interest rates aren't the only thing that matters to loans. The default rate also matters. If I borrow a billion dollars from you to pay myself and I have no good plan to pay you back, it doesn't matter how low interest rates are, you'll still be out a billion dollars.
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Nobody should profit from healthcare at all. I don't care if doctors and nurses and board members and janitors all make fuck you money, or if hospitals reinvest tons of money to perpetually have state of the art facilities. But the profit dynamic is too much.
How would vaccines and new drugs be invented without any profit incentive?
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Metabolic health is responsible for at least 3/5 of healthcare costs. 4/5 of SNAP recipients have at least one underlying metabolic health issue. Big food wins. Big medicine wins. Big pharma wins.
> Metabolic health is responsible for at least 3/5 of healthcare costs. I would love to see a source for that, as it is strongly at odds with all data that I've ever seen. For example: "Medical cost of overweight and obesity combined is approximately 5.0% to 10% of US healthcare spending." https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-789X.... "Costs attributable to overweight and obesity in Canada were $6.0…
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…
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Is this a serious question? You can’t think of a scenario in which a company in America profits from denying care? You should research insurance companies and understand how it is they make a profit.
Medical insurance in the US has strict limits on profits. If they deny a little care, they can hit their cap, but if they deny too much, they have to send premium refunds. Really, the way to increase costs is to increase spending on care --- then they have more profit available, if they also increase premiums.
What is your overall point though? Do you think it’s a good idea to have profit motives governing healthcare? Do you believe PE owned hospitals are good? Do you disagree that there are instances of companies profiting from denying care?
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>You can decide how to employ your resources as you wish Thank you. So would you say the following is a correct interpretation of your argument: "Any action or set of actions is voluntary, provided there are at least two choices" Follow up question which I do not mean sarcastically or anything other than explicit: Do you consider "Die/cease to function" a persistent choice? That is to say, if there are only the follo…
Your question is wrong. Voluntary means that the person giving you the choice is not the one creating the choices. So your choice is "work", or "starve and die" - the person offering the job is not creating the "starve and die" choice, therefor it is voluntary. Your choice is "work", "I will beat you" - this in involuntary. Your choice is "work for $1,000,000", or "work for a bar of gold" - this is involuntary becaus…
>the person giving you the choice is not the one creating the choices
Who is creating the choices if not the people who are offering the jobs?
>So your choice is "work", or "starve and die"
So then you've answered my second question above, which is, if there is a persistent acceptable choice of "die" then any alternative must be voluntary.
My question is, from your perspective unless someone is physically restrained then anything they do is purely voluntary?
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My current working theory. Happy to hear from any of the actual PE people who are reading this. 1. As you can imagine, not everyone has the wherewithal to launch a PE firm. Only people who are well connected in the financial world will get access to the funds. People who have friends in the investment sector for instance. There's plenty of stories about how VC (which isn't the same thing) investment is hard to get a…
Regarding 2, the still requires you to believe that either Banks or Pension funds are fine with hemorrhaging millions or billions of dollars buying PE debt and haven't figured it out over the course of a half century. I think the real answer is more unsettling for some. PE debt has volatility but is on net a profitable investment. You can smooth out volatility with volume and by spreading it around. This is the only…
The managers of those funds make money based on deals and they move on before the deal goes south. Principal agent problem.
EDIT: lordnacho explains better: https://news.ycombinator.com/item?id=36751012
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> ... someone is on the other side of that transaction, lending the billions. Who does that and why? Are they perpetual suckers, unaware of the decades of experience we have doing this? I listened to a podcast interview with a financial professional who advises public pension fund boards. What he said in all but words was that, yes, the political appointees who actually vote on decisions are perpetual suckers.
Pensions are very rarely lenders. They may invest in lenders but tend to look at historical performance. Political appointees are not the ones making investment decisions. At most they are setting very broad themes. For example, political appointees are the ones that say all investments must be carbon-neutral.
Political appointees are making investment decisions by choosing the people who make investment decisions.