Private Equity is ruining Physician Livelihoods

[pit.alumni]

It has already happened in Emergency Medicine. Private Equity egregiously overbilled and surprise billed patients for years and now we have the no surprises act. For ED groups there is now absolutely no incentive for an insurer to negotiate a fair contract or keep existing ones for that matter. Now PE is doubling down and cutting ED physician hours and replacing them with APPs. In my area we've just seen a large ortho group and GI practice sell to PE. But make no mistake, these are not really "sales". Rather, they are giving the practice a loan and expect to get paid back in spades. The only difference is the people getting the loan, (older physicians near retirement), are different then those paying them back (younger physicians just starting out). PE has no secret sauce to really make the practice more profitable, i.e., increase the pie, the bulk of the profits come from decreasing physician reimbursement. Dermatology practices are another hot PE target. I can't really blame the older physicians for selling out, they are looking out for themselves. But Physicians I believe will very much find themselves in a supply demand situation. So if you are in a specialty that is in great demand you may be OK. But medical students are figuring this out. This year, for the first time a large number of ED slots didn't fill in the match. I suspect students are moving to "greener pastures".

[Bdoc]

im surprised hospitals cant outcompete PE. The hospital referral base is huge. I dont see why doctors work for PE vs hospital based. Is the $$ that different? PE sounds terrible

[CordMcNally]

im surprised hospitals cant outcompete PE. The hospital referral base is huge. I dont see why doctors work for PE vs hospital based. Is the $$ that different? PE sounds terrible

I can't speak towards other specialties but I can speak towards EM. Hospital based employment isn't incredibly common in emergency medicine. Hospitals haven't shown the desire to take that on. The majority are CMG jobs with a few democratic groups sprinkled in here and there although they are becoming more rare. PE is interesting in medicine because, as a whole, they don't have the patient's best interest in mind and their goal often directly competes against actually providing good care. Unfortunately, money typically wins out. Now these CMGs are opening their own residency to heavily oversupply the number of physicians in order to ultimately drive down conversation. It's sad that the ACGME is going right along with it.

[jacoavlu]

hospitals are run by hospital admins. PE is run by wall street people.

[jacoavlu]

wall street types I should say. that includes VC people

[Turf Doc]

I wonder if some specialties have lower barriers of entry for opening up residencies. I thought that medicine was somewhat protected from extreme oversaturation (unlike for example pharmacy schools and law schools) because of residency slots, but if the barriers are low enough to open them i guess thats not true.

[CordMcNally]

I wonder if some specialties have lower barriers of entry for opening up residencies. I thought that medicine was somewhat protected from extreme oversaturation (unlike for example pharmacy schools and law schools) because of residency slots, but if the barriers are low enough to open them i guess thats not true.

Many of the hospitals that are getting residencies for EM are hospitals that shouldn't be getting residencies.

[Turf Doc]

Many of the hospitals that are getting residencies for EM are hospitals that shouldn't be getting residencies.

Yeah, thats what i mean. I figured there was a natural barrier to residency slots, as in you need enough caseload to have sufficient training and I assumed that would be regulated, but I guess that's in an ideal world...

Another question - do attendings here worry much about their job markets? Obviously it matters when youre starting out, but once youre a partner it shouldnt matter as much right? If youre a partner you might even prefer a crappy job market as you wouldnt have to offer anything good for those on the partnership track. I guess this assumes your contract is stable though, since if that goes now you're on the job hunt

[CordMcNally]

Yeah, thats what i mean. I figured there was a natural barrier to residency slots, as in you need enough caseload to have sufficient training and I assumed that would be regulated, but I guess that's in an ideal world...

Another question - do attendings here worry much about their job markets? Obviously it matters when youre starting out, but once youre a partner it shouldnt matter as much right? If youre a partner you might even prefer a crappy job market as you wouldnt have to offer anything good for those on the partnership track. I guess this assumes your contract is stable though, since if that goes now you're on the job hunt

Many of those residencies have to send their residents out to different hospitals for trauma, etc.

It's great being a partner until the CMGs try to woo your hospital's admin for your contract which happens all the time. They have fancy presentations about how awesome they are and how they'll make all the metrics the admin care about look fantastic. It's an uphill battle. Democratic groups are becoming somewhat rare in EM these days.

[Jaqen Haghar MD]

Everything you say here is true. Wall Street has crushed EM. They won.
The older physicians had a hand in this also. They saw an opportunity to get really rich, knowing full well they were screwing the specialty and young physicians, and they took it. McMansions, sports cars, and fancy club memberships were too alluring and too expensive otherwise. I’ve seen it first hand.

[G]

Everything you say here is true. Wall Street has crushed EM. They won.
The older physicians had a hand in this also. They saw an opportunity to get really rich, knowing full well they were screwing the specialty and young physicians, and they took it. McMansions, sports cars, and fancy club memberships were too alluring and too expensive otherwise. I’ve seen it first hand.

I agree with all that, but I look around my community and see very few private practices in general--if it isn't a CMG/PE, it is the hospital or university.

[pitt1166]

PE ruining EM is talked about alot on this forum, but the same thing is happening to ophtho and derm. PE is buying up a lot of the groups, and young docs are finding less and less jobs that can eventually lead to partnership.

it's just a golden parachute for the old docs.

all very bad, all very terrible.

the older docs spin it as a potentially good thing, using a bunch of generic MBA buzz words, but it's is screwing over young docs.

[jacoavlu]

everyone should start framing the conversation as "docs are selling their practices to PE" bc that's exactly what it is. easy to judge from the outside but I would expect to see more young docs walking away from these jobs. but a lot of young docs seem to be more cool with employment

[G]

but a lot of young docs seem to be more cool with employment

I agree with that. Since we own our practice, we attract a different type of docs. But in the community, it sure seems that many/most of the younger docs lack an interest in ownership. (I write this as the guy who posted in the car thread that I always mess up my car repairs....)

[childay]

everyone should start framing the conversation as "docs are selling their practices to PE" bc that's exactly what it is. easy to judge from the outside but I would expect to see more young docs walking away from these jobs. but a lot of young docs seem to be more cool with employment

Because they don't know any better of course. But PE employed seems even worse than hospital employed. Hospital at least has to pretend to public to care about patient care vs profits.