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Some private equity firms are furious over a paper in a dermatology journal

nytimes.com

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Re: Some private equity firms are furious over a paper in a dermatology journal

#21

Post by sueders101 »

copper_think wrote: post #11

What is the value that private equity and/or VC are adding to dermatology? I guess what I'm asking is, why would the physicians be interested in sharing some portion of their income with these non-physicians? Medicine, like other guild professions like law, dentistry, and accounting, is an enterprise which seems to naturally fit the partnership model instead.

The value add is an enthusiastic pursuit of profit. Ownership by a collection of doctors drives lower margins/profits than ownership by a private equity firm. Economies of scale can also help, but that’s not the driving reason behind PE acquisitions. There’s a degree of good faith/naïveté when medical providers and pharmacies bill insurance providers. PE firms can leverage this expectation and push for increased costs with little, if any, additional overhead.

Re: Some private equity firms are furious over a paper in a dermatology journal

#22

Post by losteric »

adrian_mrd wrote: post #9
hn_throwaway_99 wrote: post #3

After just finishing "Bad Blood", the book by John Carreyrou on the Theranos fraud, this particular passage in the article had me incensed: > This week a lawyer for Advanced Dermatology and Cosmetic Surgery, which is backed by private equity and is the largest dermatology practice in the United States, called the general counsel at the University of Florida, where two of the authors are employed, demanding specific c…

Agree. Related thought: the influence of lawyers in tech firms - witness the draconian EULAs users are 'forced' to accept with a false binary choice of accept or not - and the role that corporate law staff have had in software development, by effectively limiting the rights of users. It seems to me that many technology firms copy-and-paste the soul of EULAs to protect themselves (against the worse cases that may aris…

I think this legal arms race is a consequence of America's overly-litigious and profitable legal system.

These EULAs are the equivalent of warning labels on soda bottles that loosely read "Warning: Contents under pressure, don't point at your eyes"... who is that written for? We laugh and call it unnecessary, but that warning exists because there is precedent that must now be defended against.

When those ludicrous cases are widely used as a means of attack or personal enrichment, of course corporations will respond with excessive legal restrictions. Their shareholders don't want to lose money to frivolous lawsuits or be exposed to risks competitors have covered.

Re: Some private equity firms are furious over a paper in a dermatology journal

#23

Post by WalterSear »

losteric wrote: post #22
adrian_mrd wrote: post #9

Earlier quoted context omitted.

Agree. Related thought: the influence of lawyers in tech firms - witness the draconian EULAs users are 'forced' to accept with a false binary choice of accept or not - and the role that corporate law staff have had in software development, by effectively limiting the rights of users. It seems to me that many technology firms copy-and-paste the soul of EULAs to protect themselves (against the worse cases that may aris…

I think this legal arms race is a consequence of America's overly-litigious and profitable legal system. These EULAs are the equivalent of warning labels on soda bottles that loosely read "Warning: Contents under pressure, don't point at your eyes"... who is that written for? We laugh and call it unnecessary, but that warning exists because there is precedent that must now be defended against. When those ludicrous ca…

A warning is not a contract.

Re: Some private equity firms are furious over a paper in a dermatology journal

#24

Post by Fomite »

distant_hat wrote: post #20
djsumdog wrote: post #7

People often wonder what the point of tenure is. Well this is it. Those authors need to not back down, and call attention to this. If they're tenured researchers or professors, they should be able to make publications like this without fear or retaliation from the school or industry.

All tenure does is largely protect you from getting fired. They can still do a fair amount of damage though you still have employment. Lab space can be reduced, it can get harder to get approvals for research, decreased funding etc.

It's not a deflector shield, but "Protects you from getting fired" is, itself, a powerful tool. Especially at public universities with potentially hostile legislatures/boards of regents.

Re: Some private equity firms are furious over a paper in a dermatology journal

#25

Post by yborg »

jcutrell wrote: post #10

I have no proof they are involved, but my wife and I both had a visit to a dermatologist last year. Both of us were then recommended for excisions. She was 29, I was 28. Everything came back pretty much normal. We were sent to this fern after a friend went there. He also had an excision. Also under 30. Now, we feel pretty much like we were played. Maybe this is relevant to this issue.

This summer I made the mistake of going to a large dermatology practice with several locations because a dermatologist I had seen a few times before was unavailable. I had what turned out to be essentially contact dermatitis. The large corporate practice ended up billing almost $900 for this including an unnecessary biopsy. I assumed that this was simply a rogue practice, but this news story makes me see this in a new light. Apparently the field of dermatology has been identified as a lucrative profit center by P/E firms and these sort of dermatology practices are being built up to strip mine the out of control medical-insurance complex here in the US. The logical next step is for these equity-backed firms to use their capital to acquire the majority of dermatology practices in a region and be able to dictate pricing.

I'm sure that this area of medicine has been selected by equity firms because of the prevalence of cosmetic-related procedures that are inherently high-margin in this field. But there is so much money being sucked into this sector of the economy that this will encompass other types of medicine. The other area that seems to be active now is hospice care - the large insurer Anthem just bought a large palliative care provider this year. How this is not playing both sides of the trade kind of escapes me.

The whole health care sector is starting to resemble the payday loan market on a vast scale and with even less regulation. And with 2 profit-seeking players interested in shaking down the consumer in every transaction, not just one. Or, one player pretending to be two players for maximum profit.

Re: Some private equity firms are furious over a paper in a dermatology journal

#26

Post by User23 »

adrian_mrd wrote: post #9
hn_throwaway_99 wrote: post #3

After just finishing "Bad Blood", the book by John Carreyrou on the Theranos fraud, this particular passage in the article had me incensed: > This week a lawyer for Advanced Dermatology and Cosmetic Surgery, which is backed by private equity and is the largest dermatology practice in the United States, called the general counsel at the University of Florida, where two of the authors are employed, demanding specific c…

Agree. Related thought: the influence of lawyers in tech firms - witness the draconian EULAs users are 'forced' to accept with a false binary choice of accept or not - and the role that corporate law staff have had in software development, by effectively limiting the rights of users. It seems to me that many technology firms copy-and-paste the soul of EULAs to protect themselves (against the worse cases that may aris…

> Agree. Related thought: the influence of lawyers in tech firms - witness the draconian EULAs users are 'forced' to accept with a false binary choice of accept or not

The comedy option is to print it out, cross out and initial each clause you disagree with, sign it, and mail it to them certified with a letter saying you agree under these terms please write back if they don't agree.

This actually works with all contracts of adhesion, but you will get a lot of confused looks from the flunkies.

Re: Some private equity firms are furious over a paper in a dermatology journal

#27

Post by gaius »

hn_throwaway_99 wrote: post #3

After just finishing "Bad Blood", the book by John Carreyrou on the Theranos fraud, this particular passage in the article had me incensed: > This week a lawyer for Advanced Dermatology and Cosmetic Surgery, which is backed by private equity and is the largest dermatology practice in the United States, called the general counsel at the University of Florida, where two of the authors are employed, demanding specific c…

I'm disgusted by these high-powered law firms using thuggish tactics to try to silence critics.

The actions of Boies law firm, as documented in the book, are particularly egregious. Worse still is that Boies himself has a track record of being super tech savvy; he’s litigated against Microsoft and Google. As he was a board member at Theranos, it stretches credulity that he wasn’t more aware of the deception. Paid in equity too, how is that not a conflict of interest? How is it even legal?

Re: Some private equity firms are furious over a paper in a dermatology journal

#28

Post by jedberg »

copper_think wrote: post #11

What is the value that private equity and/or VC are adding to dermatology? I guess what I'm asking is, why would the physicians be interested in sharing some portion of their income with these non-physicians? Medicine, like other guild professions like law, dentistry, and accounting, is an enterprise which seems to naturally fit the partnership model instead.

There is a strange bit about being a doctor or lawyer -- you aren't allowed to for a C corp for your own practice. However, if someone else forms the corp and you work for them, then you get all the protections of a C corp, as long as you don't own the majority share.

So one thing they add is legal protection.

Re: Some private equity firms are furious over a paper in a dermatology journal

#29

Post by Hermel »

hn_throwaway_99 wrote: post #3

After just finishing "Bad Blood", the book by John Carreyrou on the Theranos fraud, this particular passage in the article had me incensed: > This week a lawyer for Advanced Dermatology and Cosmetic Surgery, which is backed by private equity and is the largest dermatology practice in the United States, called the general counsel at the University of Florida, where two of the authors are employed, demanding specific c…

I think it is ok to contact the authors of a paper if you think they got something wrong or omitted something important.

However, here it was not a scientist calling the authors, but a lawyer calling the general counsel. This is a clear hint that the call was not about correcting an error in the paper, but about bullying them and preventing the public from reading what the authors have to say.

Re: Some private equity firms are furious over a paper in a dermatology journal

#30

Post by chillydawg »

jedberg wrote: post #28
copper_think wrote: post #11

What is the value that private equity and/or VC are adding to dermatology? I guess what I'm asking is, why would the physicians be interested in sharing some portion of their income with these non-physicians? Medicine, like other guild professions like law, dentistry, and accounting, is an enterprise which seems to naturally fit the partnership model instead.

There is a strange bit about being a doctor or lawyer -- you aren't allowed to for a C corp for your own practice. However, if someone else forms the corp and you work for them, then you get all the protections of a C corp, as long as you don't own the majority share. So one thing they add is legal protection.

I'm sure there is insurance cheaper than 50% of all profit.
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