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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

#261

Post by lifeisstillgood »

The thing about PE that confuses me, in fact it's about all finance.

Why is it that a business can be bought by a PE firm, that uses the existing cash flow of the business to fund the loan repayments, but the business itself cannot get a loan to invest in new capital / buy the CEO a yacht etc?

There feels like there is a missing market. There is the super safe regulated world of public corporations, where you loan MSFT your cash and they will spend it on marketing O365 or something. And there is the highly specialised one of a kind "selling it for parts" M&A.

But where is the middle market where a PE firm makes an offer and the next day the business itself puts up a prospectus and is able to find enough semi-liquid capital to take the self same bet?

Why is it so hard to raise funds?

or ami missing something

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

#262

Post by worik »

kjghkjghkjgh wrote: post #86
thfuran wrote: post #65

Earlier quoted context omitted.

Isn't a lot of that coming out of universities already?

Many are but they also work with for profit pharma companies to fund the work.

> Many are but they also work with for profit pharma companies to fund the work.

It is sad to think that making profits for your masters is the only incentive to do good.

It is the way the system has been built.

It is not done much for many people's suffering

https://en.wikipedia.org/wiki/Neglected_tropical_diseases#Ec...

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

#263

Post by worik »

starcraft2wol wrote: post #118
callmeal wrote: post #106

Earlier quoted context omitted.

> How would vaccines and new drugs be invented without any profit incentive? The same way they were invented before. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6351694/ An interviewer once inquired about the ownership of the polio vaccine patent, to which Salk famously answered, “Well, the people, I would say. There is no patent. Could you patent the sun?” https://www.t1international.com/100years/ On January 23rd,…

Individuals often respond to social status incentives more than cash. Undoubtedly this invention helped Salk's financial and personal outlook in other ways. Also the models of development of these is just completely different from what modern medicines often requires. Specifically, operateing large research labs (which are heavily regulated) and then pursuing the marathon that is FDA approval. Individuals will still…

> Individuals often respond to social status incentives more than cash

Incentives matter. But they are not the whole story.

People act for reasons other than incentives, also.

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

#264

Post by [deleted] »

VancouverMan wrote: post #32

This is the kind of economic distortion that should be expected when onerous government-imposed regulation of practitioners, medication, and medical devices creates barriers to entry that reduce competition. While such regulation may have been imposed to try to increase safety, quality, and consistency, for example, it also ends up interfering with the incentives of the participants. The lack of real competition, com…

[deleted]

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

#265

Post by worik »

disgruntledphd2 wrote: post #206
kjghkjghkjgh wrote: post #120

Earlier quoted context omitted.

Modern vaccines and new drugs are vastly more expensive. It costs for example over $1 billion to fund a new drug.

Yeah, but does it have to be? Like, definitely there's costs associated with Phase 1/2/3 etc, but right now the actors in the chain have absolutely no incentives to limit these costs, as they help to justify the huge profits gained from the temporary monopoly of patents. Also, it's worth noting that all the big Pharma companies spend much, much more on marketing than they do on research.

> Yeah, but does it have to be?

No. Definitely not.

We learnt that during the mad scramble for a Covid vaccine.

Followed up by a sickening cash grab.

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

#266

Post by lotsofpulp »

tpmoney wrote: post #221
vkou wrote: post #178

Earlier quoted context omitted.

> This doesn't explain why doctors are selling though Retiring doctors are selling because this lets them cash out their practice for way more than they'd otherwise get for closing it and auctioning off the equipment. > Why aren't doctors just not selling their practices and taking a more relaxing job running things themselves? The ones that are selling are the ones exiting the rat race, the downsides aren't affectin…

So why aren't new doctors opening their own practices? What has changed in the last 20/30/40 years that are leading up and coming doctors to choose working for someone else instead of opening their own practice?

Because the ROI dropped precipitously. Governments were paying much better, insurance companies were paying much better, liability was a lot less, documentation and paperwork was a lot less.

The 80s to 00s doctor years were very good. Now the power is in the hands of the government and huge insurance companies, and to compete with them, you need to be part of a large healthcare provider group, which ends up happening as an employee.

Plus medical school debt and increasing years to become fully practicing like having to do longer residencies and fellowships.

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

#267

Post by worik »

kjghkjghkjgh wrote: post #51
synetic wrote: post #30

Earlier quoted context omitted.

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.

Should a Lasik surgeon provide Lasik to everyone regardless of their ability to pay?

> Should a Lasik surgeon provide Lasik to everyone regardless of their ability to pay?

Yes

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

#268

Post by maxerickson »

lr4444lr wrote: post #59
lordnacho wrote: post #46

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…

More like running many kinds of businesses has become more hassle than its worth. Medical malpractice premiums are very high, insurance payouts are stingier, and medicine has become more capital intensive than ever as newer medicines and diagnostics increasingly dominate, along with an aging population that needs more intensive care. Doctors report being more burnt out than ever. It's an attractive proposition to out…

Doctors are burnt out because there aren't enough of them and they make a lot of money working for businesses that prioritize revenue generation.

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

#269

Post by lordnacho »

civilized wrote: post #222
lordnacho wrote: post #136

Earlier quoted context omitted.

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…

> the M&A people will talk someone in the lending department into doing the deal. According to the standard narrative, lenders have been repeatedly duped into throwing billions into bad PE investments for decades. If you had a friend who asked for a thousand dollars every month, always promised to pay you back and never did, how long would you continue to give him a thousand dollars each month? If "talking" alone can…

It's the agency that causes the issue. And a little bit of financial engineering.

Say you have a friend who often can't pay back his debts. But he can pay 80% of them.

You have another friend who wants to lend to safe debtors. Why not get that safe tranche, the bottom 80%? He needs to show he's safe so he can take more risk. He loves going out to dinner with you.

Another guy wants to take some risk. You give him the 20%, but you also let him into some other deals that you have, so that he doesn't always lose. In fact, it turns out this guy isn't paid on the returns, he's paid on assets managed. And he's not even going to be around that long, he'll be onto the next role long before the bond is up. And they're in a bag of other stuff anyway.

Turns out you're not even the guy lending the money. You work on a transaction basis. Your next job might be as one of the friends. Or on the PE side.

So you and your buddies keep skimming a bit of the money off each year, well mixed with other stuff that you are managing.

Well smeared poop.

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

#270

Post by lapcat »

mediascreen wrote: post #254
lapcat wrote: post #249

Earlier quoted context omitted.

That's a political propaganda piece by a notorious right-wing think tank. "The Heritage Foundation (abbreviated to Heritage) is an American conservative think tank based in Washington, D.C. The foundation took a leading role in the conservative movement during the presidency of Ronald Reagan, whose policies were taken from Heritage's policy study Mandate for Leadership." https://en.wikipedia.org/wiki/The_Heritage_Fou…

I know they are a right-wing think tank, that is why I referenced them when it comes to rank "market economy" factors that people who believe in and want to have "free markets" care about. In what way is it a political propaganda piece? From what I can tell it's a pretty transparent ranking of countries by factors that the organisation cares about. While the Scandinavian countries have high taxes and regulated labour…

One of their policy goals is deregulation in the United States. Thus, they have a vested interest in showing that the United States has too many regulations.

And they don't even define what their categories mean. I'm willing to bet that "labor freedom" to them means "right-to-work" and no minimum wage, for example. In any case, without proper measurable definitions, they can easily manipulate their index to say whatever they want.

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