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Who employs your doctor? Increasingly, a private equity firm

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

#391

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…

For #2 - I'm not a PE insider, but I'm pretty aware of a lot of corporate dynamics in big tech, which increasingly seems like it's indistinguishable from any other corporate sector. I think we have a habit of thinking of companies/firms as individual actors deciding what's in their best interest, when in reality it's basically an oligarchy of either C-suite execs or boards of directors determining what's going to happen to the rest of the company. If these people want to get rich quick, and I'm guessing they do, since this is probably the end game for 99% of them, then private equity is their answer. They likely don't really care about the employees or the future of the company as an end in itself, just a means to enrich themselves, and so if PE presents this opportunity without those strings attached (i.e. by splitting the dividend recapitalization or the real estate leasebacks with the execs in the form of 'bonuses') the execs/boards will likely take it.

TL;DR - PE can't exist in its current form without extreme power/ownership imbalances within the firms they take over and run into the ground. This has probably been increasing over time, hence why PE has been getting worse over time.

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

#393

Earlier quoted context omitted.

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…

> This is the only explanation that doesn't depend on a source of dumb money that can never learn buying this debt. No it isn't. A simpler explanation is that the people making the decision aren't the ones paying for the failure. I see this all the time at the executive level in finance -- people will knowingly make bad deals if it gets them their bonus.

Someone still has to be losing money on that deal or it's not a bad deal. Someone is paying the bonus and giving the executive money to invest

You're also starting from the assumption that the deals are bad. Why is that?

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

#394

Earlier quoted context omitted.

Helps to build what exactly? Airbnb, which makes housing less affordable? When has VC created something that approximates a public good, such as a hospital?

Stripe is great and is just a massive boost to the entire industry. Shopify is also great, Apple makes great products, Google search is fantastic. I could go on.

I don't know the full history of each of these companies, but it wasn't my impression that Google or Apple really started with a lot of VC funding. Sure there had to be some kind of private investment to kick start them, but they became profitable on their own pretty quickly. "VC" to me is associated with finding an outside source of cash to fund your money losing business until you can drive competitors under. If revenue picks up the company can IPO, success! Then once it's public the stock price flatlines or drops (otherwise the venture capitalist left value on the table).

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

#395

Earlier quoted context omitted.

For breast cancer, we're talking 88.6% vs 85.8%. It's very much on par. We generally do better with lower socioeconomic status people as well. Another thing to consider is that we treat everyone . You don't have to consider of it's going to bankrupt your family before you engage in treatment. So we often treat people who are sicker and poorer because we don't have affluence as a selection mechanism for our patient po…

> For breast cancer, we're talking 88.6% vs 85.8%. Sure, you can cherry-pick one family of cancers to make a point, but again: there's a whole series of studies that have been conducted on this exact question for the last 30+ years, tracking all common cancers, and which have consistently shown the same results: while Canada does not perform as badly (with respect to the US) on cancer survival rates as many other OEC…

https://wisevoter.com/country-rankings/cancer-survival-rates...

It's not cherry picking, I just didn't add a whole chart. It's on par, considering our different populations, climate (most of the country is frozen for half the year), and the extent of our coverage. I'm not saying it's worse, it's as on par as you can get given the variation in such a thing.

The uninsured don't count towards cancer rates if they don't receive a diagnosis. If you're uninsured and losing weight, anemic, night sweats, and your doctor says it could be serious so you walk away because you won't be able to afford it, you don't count as a cancer diagnosis. Assuming you went to the doctor at all. That does no count against my point.

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

#396
post #111

Earlier quoted context omitted.

Honestly I've had this happen multiple times recently, where people don't understand revenue vs profit. Profit is what you put in the business bank account after you pay operating costs which includes salaries. You can make fuck you money by making idk $2MM per year. That doesn't come out of profits. Profits are commonly paid out to owners/investors in the form of dividends.

That's sophistry. Yes, accountingwise, revenue and profit aren't the same thing, but if healthcare is going to be raking in so much money that the hospitals are throwing fuck you money at the janitors, it's clearly highly profitable for a lot of people, and they want "nobody to profit from healthcare".

What? Sophistry? Are you insane? I've factually described the difference between revenue and profit, and you're saying I'm deliberately trying to deceive someone?

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

#397
post #64

Earlier quoted context omitted.

How are people going to make fuck you money if there's no profit?

Ironically with no profit there's lots of cash left to pay employees fuck you money.

The point is pay your employees well not your investors when it's human lives at stake.

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

#398

Earlier quoted context omitted.

> For breast cancer, we're talking 88.6% vs 85.8%. Sure, you can cherry-pick one family of cancers to make a point, but again: there's a whole series of studies that have been conducted on this exact question for the last 30+ years, tracking all common cancers, and which have consistently shown the same results: while Canada does not perform as badly (with respect to the US) on cancer survival rates as many other OEC…

https://wisevoter.com/country-rankings/cancer-survival-rates... It's not cherry picking, I just didn't add a whole chart. It's on par, considering our different populations, climate (most of the country is frozen for half the year), and the extent of our coverage. I'm not saying it's worse, it's as on par as you can get given the variation in such a thing. The uninsured don't count towards cancer rates if they don't…

> It's not cherry picking, I just didn't add a whole chart.

It is cherry-picking. As I said, there are multiple, decades-long peer-reviewed studies on this topic (which is not what you linked). Raw numbers don't mean a whole lot for comparative studies, because confounding variables such as basic demographic differences will always swamp whatever effects you're trying to observe. Peer reviewed studies measure and account for these; a news site reporting raw statistics does not.

> climate (most of the country is frozen for half the year)

I have no idea how you're concluding that this affects survival rates for cancer.

> The uninsured don't count towards cancer rates if they don't receive a diagnosis. If you're uninsured and losing weight, anemic, night sweats, and your doctor says it could be serious so you walk away because you won't be able to afford it, you don't count as a cancer diagnosis. Assuming you went to the doctor at all. That does no count against my point.

Late diagnoses mean inferior care, and higher mortality rates. It's very rare for people to die of cancer that is neither diagnosed nor detected at any point, including upon death. This isn't speculative; it's a topic that is extensively studied in public health. Again, this is addressed in the studies conducted by professionals tasked with answering this exact question about cancer survival rates.

It can be tempting to start from a prior ("the US healthcare system is less affordable than Canada's systems") and then find explanations that fit that prior ("people don't get diagnosed with cancer because they can't afford it"), or search for data which supports that prior. Unfortunately, that's a logical fallacy, and it often leads to conclusions that are contradicted by the hard evidence at hand - which is what researchers have found.

On that note, you may be surprised to learn that healthcare in Canada is not, in fact, universal. An estimated half a million people in Canada do not have access to healthcare. That's actually slightly higher than the uninsured rate for the elderly in the US (which is the cohort for which the overwhelming majority of cancer diagnoses occur).

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

#399

Earlier quoted context omitted.

I don't know if that's necessarily the case, in practice. Aside from the cases where a PE firm does keep the company public, there's at least one case where short-sellers weren't made to close out their positions when a company was taken private (Next Bridge Hydrocarbons, if you're curious).

How did that work? The company became privately owned, but somehow someone was still betting on the price of some public shares in that company? How's that possible?

IIRC, public trading was halted several days early due to an "extraordinary event." It was never restarted, CUSIP was removed a few days later. Short positions weren't closed and long positions are sitting in brokerage accounts.

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

#400
post #323

Earlier quoted context omitted.

When people are invited to become partners, usually they needed to write a check, but also buy-in over a number of years using a percentage of their earnings, as well as the firm potentially providing financing to buy their partnership interest. On retirement, partners were bought out (in many cases, getting paid out over a time until they were fully bought out)

>When people are invited to become partners, usually they needed to write a check, but also buy-in over a number of years using a percentage of their earnings, as well as the firm potentially providing financing to buy their partnership interest This doesn't address any of the main problem I brought up, which is that hospitals are capital intensive. "Writing a check" is easy to do when there isn't much capital tied u…

See my point 1) medical practices hospitals 2) there aren’t many de novo hospitals, so the start from scratch example is not that relevant, but for fun, in your example you borrow $50m and and 25 of the doctors (the partners) pony up $2m (not a crazy amount given that average doctor pay is $300-$500k and these 25 would systems only be in the top quartile and later career
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