Who employs your doctor? Increasingly, a private equity firm • Hacker News Board

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

#271

Post by maxerickson » Sun, Jul 16, 2023, 8:18 PM UTC

treis wrote: post #101

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…

Think the economic reality is that the days of a doctor hiring a couple employees and hanging their shingle are over. The capital requirements are too high and the counter parties too big for individuals to thrive anymore. PE is one of the ways to consolidate and get some economies of scale. Plus I think most doctors prefer doctoring to running a business.

We should flood the market with doctors so that private equity doesn't see it as an attractive investment to hire them.

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

#272

Post by worik » Sun, Jul 16, 2023, 8:20 PM UTC

lucaspm98 wrote: post #231

lordnacho wrote: post #207

Earlier quoted context omitted.

> the person paying for healthcare isn't the one receiving it, so it is no wonder patients receive poor care. This works fine in fields like the restaurant business or the haircutting business, where people can decide for themselves what they want to eat or how they want their hair, and they can decide for themselves whether their food or their haircut is satisfying. The sector where it is least applicable is healthc…

I don't completely disagree, but that's the edge cases of mystery diseases or rare cancers that make for good headlines. The vast majority of healthcare is basic screenings (physicals, x-rays, bloodwork) and chronic disease management (birth control, blood pressure). These services are more or less understood and interchangeable, and absolutely can compete on service, quality, and price.

> The vast majority of healthcare is....

...entirely unnecessary procedures done for profit

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

#273

Post by lordnacho » Sun, Jul 16, 2023, 8:20 PM UTC

ars wrote: post #248

lordnacho wrote: post #213

Earlier quoted context omitted.

Does this mean that as long as there are two people making offers, anything you do is voluntary?

Your sentence is not written carefully. Rephrasing: As long as there are two independent people making offers, your choice between the two offers is voluntary. (Do not forget the 3rd option: accept neither offer.)

Would you like to work for the Garbage Collection Company of America?

Would you like to work for the American Garbage Collection Company?

Would you like to starve?

Aha, you've volunteered to work as a garbage collector.

I think this isn't what people think of as voluntary. Sophie's Choice is a better description.

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

#274

Post by balderdash » Sun, Jul 16, 2023, 8:22 PM UTC

gruez wrote: post #203

balderdash wrote: post #95

Earlier quoted context omitted.

1) There is a big difference between a hospital and medical practice, 2) this is a solved problem as it relates to other professional service firm (law firms, investment banks (back in the day)).

> 2) this is a solved problem as it relates to other professional service firm (law firms, investment banks (back in the day)). How was it solved?

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)

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

#275

Post by worik » Sun, Jul 16, 2023, 8:27 PM UTC

elishah wrote: post #244

poorbutdebtfree wrote: post #143

Earlier quoted context omitted.

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…

We can cherry pick until we go green...

Here is the top result for me at: https://duckduckgo.com/?q=Metabolic+health+share+of+healthca...

https://www.hsph.harvard.edu/news/hsph-in-the-news/poor-diet...

Starts with:

> Unhealthy diets account for almost 20% of U.S. health care costs from heart disease, stroke, and diabetes, according to a new study.

Please help yourself to cherries

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

#276

Post by synetic » Sun, Jul 16, 2023, 8:28 PM UTC

thfuran wrote: post #259

synetic wrote: post #232

Earlier quoted context omitted.

You are now engaging in sophistry. Doctors in England can be paid more in their system than they make now without putting in profit motives. In a publicly funded system one can pay lots of money to workers without profit in the system. It’s as if Americans don’t understand that government can provide services and not be profit driven.

>Doctors in England can be paid more in their system than they make now without putting in profit motives Could their pay increase without the doctors profiting?

This is a nonsensical response. You know what is meant by “profit” in the context of this discussion. You argue in bad faith particularly since you deliberately left off the motive part of my statement.

Obviously what is being discussed is that non-workers should not reap monetary rewards from denying care or otherwise siphoning out money from the healthcare system. You may nitpick each word and be as pedantic as possible but none of that will demonstrate that having PE firms in charge of hospitals would be better than a government or nonprofit entity running things.

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

#277

Post by toast0 » Sun, Jul 16, 2023, 8:28 PM UTC

synetic wrote: post #87

cscurmudgeon wrote: post #78

Earlier quoted context omitted.

> But it is not difficult to isolate from common sense. No one should profit from denying someone healthcare How does one profit from denying services?

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.

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

#278

Post by ahzhou » Sun, Jul 16, 2023, 8:29 PM UTC

lordnacho wrote: post #136

civilized wrote: post #109

Earlier quoted context omitted.

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…

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…

1. Connections talk, but money talks even louder. The companies they buy are also trying to sell for top dollar and rarely court just one buyer.

2. CLOs are definitely problematic, but the current rate of default is vastly overstated. If private credit defaults at the rate people seem to think it does, we'd be looking at a GFC-type situation. I can't say if there's systematic risk in CLOs a la MBS, but any possible risk hasn't materialized yet. The biggest PE firms today rarely default. Blow-ups such as Toys-R-Us are newsworthy for a reason.

See my comment below for more information. I'm not in PE, but I am very familiar with how the sausage is made.

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

#279

Post by starcraft2wol » Sun, Jul 16, 2023, 8:29 PM UTC

wpietri wrote: post #194

starcraft2wol wrote: post #105

Earlier quoted context omitted.

That's nice of you to list where you work. On HN there are many qualified and intelligent people, so we generally prefer to talk about the issues directly. > half a dozen standard robustness checks My original comment isn't arguing they used tools improperly, it's an epistemology argument. It's about the limitations of what information could even be gathered from this kind of study.

I think it's hilarious that somebody who has been here for all of 11 days wants to tell somebody who is coming up on their 10-year HNiversary what "we generally prefer".

I'll let you figure that one out on your own.

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

#280

Post by anigbrowl » Sun, Jul 16, 2023, 8:33 PM UTC

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…

Everyone knows fraud exists, yet fraudsters continue to flourish; they are good at leveraging new technology and tropes to rebrand themselves.

Consider the frequent complaints about scammers marketing substandard products on Amazon; the issue is well understood, the markers of scammers are well identified, but Amazon does nothing about it because the lesses from disgruntled customers are less than the revenue from shapeshifting scammers.