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Private Equity is ruining Physician Livelihoods

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  • #16
    Originally posted by Jaqen Haghar MD View Post
    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.
    amen.

    and also while often not disclosing to new partners and associates that this was the plan.

    doing to others what they would hate to have done to them, isn't there a rule about this somewhere?

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    • #17
      It’s brutal for EM. I feel for those guys. Mostly because they’re hands are tied and they have minimal options or leverage at this point.

      I have a lot less sympathy for derm and others. Sure the older generation has sold out. But time for the younger generation in a lot of these specialties to suck it up and figure it out.. either alone or together.

      I’m actually all for conditions worsening until there’s a true breaking point

      In my specialty (cardiology) we don’t have the PE problem but we do have the hospital employment/dependency one. But things are juuuust good enough (salary wise) that the vast majority put up with it to collect a paycheck. Collectively we would have a ton of power but you still can’t get people to take on that risk or work together as the status quo is still just comfortable enough. Doctor on doctor crime needs to end and a lot of us need to stop whining and figure it out…even if there are a lot of negative forces working against us.
      Last edited by Sundance; 04-15-2022, 02:14 PM.

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      • #18
        There seem to be a ton of financial blogs trying to teach physicians how to save and invest.

        While these are great, I don’t think doctors really need more of these types of resources. WCI already took care of it and Dr. Bernstein and other Bogleheads laid out many of these resources even before that.

        What young doctors probably could use are more resources to help them learn how to start and build their own successful private practices so that they know that they don’t need to join a PE group.

        Just an idea — if anyone that’s knowledgeable in this area wants to start a blog.

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        • #19
          Originally posted by Dusn View Post
          There seem to be a ton of financial blogs trying to teach physicians how to save and invest.

          While these are great, I don’t think doctors really need more of these types of resources. WCI already took care of it and Dr. Bernstein and other Bogleheads laid out many of these resources even before that.

          What young doctors probably could use are more resources to help them learn how to start and build their own successful private practices so that they know that they don’t need to join a PE group.

          Just an idea — if anyone that’s knowledgeable in this area wants to start a blog.
          not necessarily young docs joining PE groups it’s more about mid and late career docs selling out to PE, and young employed docs in those groups not realizing their collective leverage and walking away from a rug pull

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          • #20
            This is becoming increasingly prevalent in ortho with PE firms swooping in. I don't see how it is beneficial for the younger partner in the long term. Feel like it just adds to burn out risk with lack of independence. On the other hand, our reimbursements just cont to slide lower and lower... maybe this is something to stem that trend?

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            • #21
              Originally posted by Dusn View Post
              There seem to be a ton of financial blogs trying to teach physicians how to save and invest.

              While these are great, I don’t think doctors really need more of these types of resources. WCI already took care of it and Dr. Bernstein and other Bogleheads laid out many of these resources even before that.

              What young doctors probably could use are more resources to help them learn how to start and build their own successful private practices so that they know that they don’t need to join a PE group.

              Just an idea — if anyone that’s knowledgeable in this area wants to start a blog.
              Good idea in principle but I think too specialty specific. State laws on licensing and asset protection are also hard to generalize.

              if someone wanted to start a blog on the business of medicine that would be useful, just to help us understand how hospitals run. Blogs like WCI help us get financial education without a CFP. It would be nice to have a blog from an MD/MBA who is also on “our team.” Maybe that’s not realistic or the blogger would have to be retired from the role.

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              • #22
                I don't think PE is defeatable. They are going to win. How do you even stop it?

                What you've got is PE coming in and offering an older doc a giant pile of cash to buy an established practice. As they keep doing this they become bigger and it's not easy for a small private group to compete. So no one is going to start one and the existing ones will be incentivized to sell as well.

                The only things that can compete are big hospitals and academic institutions.

                The only way to stop it is prevent them from buying. Even if you felt that barring someone from selling their practice to anyone they like was OK, crafting some sort of law to prevent this whole business seems like it would be difficult it do without leaving ways it could be circumvented.

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                • #23
                  Cash only boutique practices can compete, but that only works in certain fields.

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                  • #24
                    Originally posted by FIREshrink View Post
                    Cash only boutique practices can compete, but that only works in certain fields.
                    Agreed. The number of fields that can pull that off is pretty low, though.

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                    • #25
                      you can stop it by not working for them. The amounts that I’ve seen in these deals I would not describe as life changing. Which is what it would take for me to sell out. But of course majority of docs suck at managing their money and spending and therefore moderate amounts of money is all it takes

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                      • #26
                        Originally posted by jacoavlu View Post
                        you can stop it by not working for them. The amounts that I’ve seen in these deals I would not describe as life changing. Which is what it would take for me to sell out. But of course majority of docs suck at managing their money and spending and therefore moderate amounts of money is all it takes
                        1. The people selling are ones who are on their way out anyway. If you're going to hang it up, why not get a big payday on the way out? Obviously, for younger and early career physicians, selling to PE backed groups is not a smart thing to do. They are normally not the ones selling.

                        2. If you're talking about new graduates "not working from them", then where do they work? Options are

                        1. PE
                        2. University/Large Hospital group
                        3. Private practice that may sell to PE soon
                        4. Go out on your own

                        Most new graduates are too risk averse and in debt to do No. 4. and it is harder to pull of than it once was. No. 3 is also a bit of a gamble. So, often it's between No. 1 and No. 2 They both have problems, so you just have to pick you poison.

                        Admittedly above is an oversimplification that is highly specialty and geographically dependent.

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                        • #27
                          Originally posted by AR View Post

                          1. The people selling are ones who are on their way out anyway.
                          you know this to be true, or you assume this? Doesn’t fit with deals I’ve seen and people I know.

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                          • #28
                            Originally posted by Jaqen Haghar MD View Post
                            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.
                            Yikes.

                            Comment


                            • #29
                              My identical twin brother is a gen surgeon.

                              He just wrote a murder mystery novel.

                              The villain in the book is an evil mastermind.

                              He runs “Gravitas Industries”

                              Gravitas is taking over the world and they have taken over hospitals, financial instructions, security firms, etc.

                              They make AI software that replaces people and eliminates highly trained highly paid workers by replacing them with algorithms and technicians

                              The characters in the book are funny and there is a lot of murder.

                              Sheriff Jack (small town AL hero, old high school QB, ) and his trusty K9 are trying to save the world or at least solve the murders…….

                              Truth or fiction?

                              Book is at the editor but I will post a link if he gets it published.

                              Comment


                              • #30
                                I’ve worked for a group bought out by PE for the last few years. While there were some positives, I feel like the negatives can be quite profound. This has typically occurred when what’s best for the physicians in the group is in direct conflict with what’s best for PE and it’s investors. PE will undercut every other group to win a contract and end up providing call coverage for every hospital in the area and sure that increases per “partner” income (and $$ in the PE pockets when they take their cut off the top) but now we end up doing 2x the work with no more postcall days… also thanks for the “gifted” logo fleece we didn’t want but you made us pay for!

                                Needless to say I am moving on hopefully for greener pastures but not so naive to believe academics/PP is not also capable of a different kind of shenanigans.

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