Private Equity is ruining Physician Livelihoods

[AR]

The point is framing the conversation as “PE is ruining medicine” is far too kind a treatment for the docs signing these deals who deserve just as much blame

Yeah, I wasn't really concerned with framing.

If you want to call it "Docs selling to PE groups is ruining medicine", that's also accurate, and arguably more descriptive.

[ENT Doc]

Was it primarily the CMG-sponsored residencies that didn’t fill in EM or was it more of an even distribution?

Not sure. The data isn’t out yet on that. The match rate was so high prior to this year that the following data sets:

https://www.nrmp.org/match-data-anal...-data-reports/

probably wouldn’t be very helpful. That would be interesting to see, when the specialty/program report is published, what the breakdown looks like.

[PWMDMD]

Is anyone surprised? PE ruins everything because they really don't care about the underlying core business and it's all about the shareholders. Everyone should've seen this coming from a million miles away. I was just having this same conversation with a friend who owns an autobody shop - PE is in that space too buying up every repair shop they can and then making deals with the auto insurers - happy to use non-OEM parts, limits on supplementals, and in general an attitude of fine is good enough - especially if you can't see it!

We all love capitalism and have benefitted from it but it is not perfect. Whether it's the concentration of wealth (and power) or the purchase of every profitable business by PE and Wall Street, the line between increased "efficiencies" to maximize profitability vs plain old poorer service/products is well beyond blurred.

[jacoavlu]

Is anyone surprised? PE ruins everything because they really don't care about the underlying core business and it's all about the shareholders. Everyone should've seen this coming from a million miles away. I was just having this same conversation with a friend who owns an autobody shop - PE is in that space too buying up every repair shop they can and then making deals with the auto insurers - happy to use non-OEM parts, limits on supplementals, and in general an attitude of fine is good enough - especially if you can't see it!

We all love capitalism and have benefitted from it but it is not perfect. Whether it's the concentration of wealth (and power) or the purchase of every profitable business by PE and Wall Street, the line between increased "efficiencies" to maximize profitability vs plain old poorer service/products is well beyond blurred.

a driver of this is our debt based economy, artificially suppressed interest rates resulting in the ultra cheap cost of capital, financialization of everything, leading and exorbitant risk taking and misallocation of capital

fear is when the house of cards comes crashing down

[Turf Doc]

We all love capitalism and have benefitted from it but it is not perfect. Whether it's the concentration of wealth (and power) or the purchase of every profitable business by PE and Wall Street, the line between increased "efficiencies" to maximize profitability vs plain old poorer service/products is well beyond blurred.

I think about this all the time... everyone loves capitalism until it's their lunch that's getting eaten on its behalf!

[Turf Doc]

Knowing my classmates, I can easily see why most will probably end up joining some sort of employed arrangement. As we all know medicine selects for a certain type of person, someone who will follow The Path to The Good Life. So when they finally get there and some large majority of docs are employed and things are good enough and they've never known anything better, why wouldn't they be like everyone else? Same exact reason people don't want to live like residents for a bit longer after residency or think it matters. They don't realize that things have changed over the last few decades and just getting your MD and finishing residency is not quite enough as it maybe used to be.

[ENT Doc]

I think about this all the time... everyone loves capitalism until it's their lunch that's getting eaten on its behalf!

But the trouble is, the alternatives stink worse. And regarding “free market” intervention in the healthcare space I find that notion somewhat laughable. Healthcare is nothing like a free market system. It’s an inefficient system for many reasons. These other machinations are just inefficiencies on top of an inefficient system.

[Turf Doc]

But the trouble is, the alternatives stink worse. And regarding “free market” intervention in the healthcare space I find that notion somewhat laughable. Healthcare is nothing like a free market system. It’s an inefficient system for many reasons. These other machinations are just inefficiencies on top of an inefficient system.

Sure, honestly the thing that's almost most annoying to me is, knowing what we know about index funds, who's even benefiting from this crappier PE-backed medicine? patients? physicians? shareholders? or literally just the PE firm through their fees?

[PWMDMD]

But the trouble is, the alternatives stink worse. And regarding “free market” intervention in the healthcare space I find that notion somewhat laughable. Healthcare is nothing like a free market system. It’s an inefficient system for many reasons. These other machinations are just inefficiencies on top of an inefficient system.

Those "inefficiencies" are what pays most of us several times the average income of other Americans. As business owners, we just chose to take those inefficiencies and pay ourselves with the proceeds. Now PE is in charge and they eliminating those inefficiencies that paid us and they are paying themselves (shareholders).

[jacoavlu]

Sure, honestly the thing that's almost most annoying to me is, knowing what we know about index funds, who's even benefiting from this crappier PE-backed medicine? patients? physicians? shareholders? or literally just the PE firm through their fees?

the PE investors benefit. At the end of the day they purchase the ownership so they can skim off the top.

[Turf Doc]

the PE investors benefit. At the end of the day they purchase the ownership so they can skim off the top.

Right. But my question is if these PE firms are expected to outperform an index over a sufficiently long time horizon. Don't we all invest in index funds because the data suggests that doesn't happen? Or is it not comparable?

[jacoavlu]

Right. But my question is if these PE firms are expected to outperform an index over a sufficiently long time horizon. Don't we all invest in index funds because the data suggests that doesn't happen? Or is it not comparable?

the P in PE stands for private.

[ENT Doc]

Those "inefficiencies" are what pays most of us several times the average income of other Americans. As business owners, we just chose to take those inefficiencies and pay ourselves with the proceeds. Now PE is in charge and they eliminating those inefficiencies that paid us and they are paying themselves (shareholders).

Fair enough re: income. And I’m not arguing for the current system persisting in its current form. In a more efficient system, sure we’ll earn less. But everyone/everything touching medicine would earn less. Our salaries are a small piece of the healthcare pie.

[Tim]

When a group of docs band together, they negotiate a contract. They are the owners, hire office managers and employees. The owners always extract a pound of flesh. PE or the PP?
The “owner” is king, and collects the “toll”.
In a way, this is a worker vs owner debate.
LLC or Corp or “Non Profit” is the legal form.
Who benefits from ownership?

[bovie]

Right. But my question is if these PE firms are expected to outperform an index over a sufficiently long time horizon. Don't we all invest in index funds because the data suggests that doesn't happen? Or is it not comparable?

It's not comparable. In no way related to index funds.