They like companies with some kind of moat that makes it hard to unseat them. Basically, companies where there is no alternative for the consumer. That way, they can inflict abuse but know there will be nowhere to run.
There are two different ways to achieve this. Monopoly and regulation. Hospitals have both government granted locational monopoly and tons of regulations that make it impossible to compete.
Private equity is the symptom, not the disease.
Until we get at the disease, new monsters will be born with different name filling the same ecological niche. It's economic natural selection played out in the environment we created.
We however don't want unnatural monopolies that have enough capital to swat away any competition, nor do we want natural monopolies taken over by rent-seekers.
If you want to argue from first principles, and we accept for a moment that granted monopoly is the system we are working in (whether or not you feel it's the optimal regime) then I'd argue there's a clear gap in regulation, as flagrant abuse of the consumer has not been prevented.
This is how industrial barons of the early-mid 20th century operated, as an example, with collusion and price fixing type things. Or hospitals and medical facilities today with certificate-of-need laws enforced by the government.
Monopolies happen due to barriers to entry, and not all barriers to entry are government-created or illegal: network effects, big upfront costs, economies of scale, control of a scarce resource, etc.
Regulation can produce a monopoly, but lots of regulations also exist to keep natural monopolies in check.
Maybe a term like 'natural markets' captures it better? The property being that natural markets/monopolies provide some sort of substrate on which a market can exist.
Good regulations seem to be ones that force open protocol and interoperability of these platforms that get large. This creates a new marketplace abstraction layer that enables new innovation to thrive.
I'm certainly glad that I'm not on AOL's internet. And also glad that internet exists in part due to Bell's telephone system being forced open.
Bad regulations do not seem to have that characteristic. It's too bad we do not have vocabulary to tell them apart. Public good type regulations are more muddy and can be used as a weapon more often than not.
>Regulation can produce a monopoly, but lots of regulations also exist to keep natural monopolies in check.
My favourite example of this is Australias NBNCo.
Every midwit on the street capable of reading a newspaper would tell you, theres a NATURAL MONOPOLY on internet services, which is why Australia needed NBNCo.
However, the enabling legislation also made it a federal crime to overbuild the NBN, because the internet isnt a natural monopoly. We have also had calls to nationalise other fibre networks, and lots of cases of NBN overbuilding other networks.
The truth of it, is that Natural Monopoly is just a thought terminating cliche. There are barriers to entry to markets, but the only kind of monopoly is regulatory. Unless you regulate some dipshit will find a way to sneak a fibre through your power duct or something. If there was enough of an interest, we could have multiple power or water hookups too. There's no reason why we cant have competitive garbage collection, and theres probably somewhere on the planet that does. Even pit and pipe isnt a monopoly, I have seen plenty of places with multiple pit providers.
It’s fine for a military defense contractor to go a few billion over budget for a weapons platform that barely works, but if a single mother uses food stamps to buy cake ingredients and then sells a few pieces of cake that’s a travesty.
Millions of Americans, not just white, but plenty of Hispanics, Blacks and Asians too, voted to take away their own medical insurance.
Because they know that they’re just temporarily embarrassed millionaires. Not the type of people who need handouts.
"For profit" isn't really the problem, fee for service is.
Value based arrangements and capitated payment structures are real improvements.
When you don't have any market forces constraining utilization, you get massive access problems.
I can tell you I am infinitely more happy living with the Australian medical system than what the US has even if it isn’t flawless with zero issues left to deal with.
Now I'm not advocating for reckless spending, you can run services with reason while staying within a spending envelope, but there is a striking difference between entities that are specifically aligned for profit and those who aren't, and this is very noticeable in the health sector, in America, were wealth directly correlates with health.
It boggles my mind when I still occasionally hear people speaking out against all forms of single payer healthcare in the US saying they don't want to have to wait weeks/months to see a doctor like they do in Canada/UK/wherever.
If I give them the benefit of the doubt of not being paid lobbyists for the medical insurance industry, I can only surmise these people haven't been to a non-emergency doctor since prior to 2020.
Because even here in the US if you aren't fabulously wealthy with concierge medical you'll be waiting weeks/months to see a 'doctor'. And you'll almost certainly never actually see a doctor, you're going to see an overworked NP (no shade on NPs here, most of whom are great, just establishing how our medical system actually works in 2026).
But it's simply not true. my mom broke her back last year and before we realized that her back was broken, we saw an urgent care doctor, same day, within 30mins (I don't recall the exact timescale now, but it was pretty much instant). Who promptly gave my mom an Rx and told us to go to the ER. Personally, urgent care appointments have always been available within 2hrs, and even stuff like an xray (usually in a centralized office, so some travel required) is possible same day. This isn't special treatment.
If someone is waiting long for care, it isn't a problem with the system - and the alternative you speak of isn't going to solve the "I'm not a medical doctor" problem either, which is the main objection to the long wait-times. Minor hypochondriac-ness notwithstanding - nothing will be able to solve that completely - money is the back-pressure mechanism to avoid waste of limited resources. Whether anybody likes it or not, doctors/xray-machines/etc are not infinite (for now heh).
For-profit health-care insurance companies should burn in hell, though.
My father had his heart in afib for over 3 months straight as US hospitals and doctors jerked him around and set appointments weeks out before they finally removed his thyroid, despite a family history of thyroid problems and having multiple previous hospital trips for suspected heart attacks, which by itself should give the obvious conclusion that his thyroid needed to be removed.
Being in afib just for a few days can cause permanent heart damage, heart attack, and death. And even once they decided it should be done, it was another 2.5 weeks before they scheduled the surgery. I don't see how anyone can think the US medical system is any good for anybody but the obscenely wealthy.
No doctor in existence would consider that an acceptable scenario, but the profit driven investors seemingly had no problem with him dieing when they had more profitable patients to serve first.
Both systems triage. The wait for non urgent needs in the US system is still weeks to months
Urgent care is a grift to replace a relationship with a doctor or practice with a lower paid, lower skilled NP. It’s more a sales funnel that anything.
What if I don't care about this whatsoever?
Conversely, people consistently put forth single-payer as a panacea without considering what other differences exist between the systems.
For example, in the US a medical residency is required by law but the number of residency slots is constrained because the AMA wants to reduce supply/competition. Change who pays the premiums and that's still just as much of a problem, and it might even make it worse to give the lobbyists an even deeper pocket to siphon money from.
Another significant source of costs in the US system is that doctors can prescribe much more expensive patented drugs or devices and no part of the system is given the incentive to say no to something which is only slightly or negligibly better but dramatically more expensive. Likewise, many of these patents are obvious (e.g. extended release version of existing drug or combination of two common existing drugs) and shouldn't be granted, but nevertheless are. But if those patents are issued and the system is required to pay for a drug when a doctor prescribes it, the seller has a monopoly for the patent term and can charge the monopoly price. The normal way to solve that is for "customers" to be more exposed to cost differences between treatment options, so that things that are only marginally better can only charge marginally higher prices, which is the opposite of how single-payer works.
"Single payer" is essentially replacing insurance companies with the government, but that doesn't solve any of the problems that exist in the parts of the system that aren't the insurance companies.
I live in the US, and this is false, with Zocdoc I can see even specialists within 24-72 hours. All I have is my wife's United plan, nothing fancy,
The problem is there is a huge bathtub curve in insurance quality between employers and the public market. It’s a rude awakening when you can’t afford COBRA rates and have to fall back to a “bronze plan” or whatever is available on the exchanges.
You said FAANG, so perhaps you're in California, a state that has laws regulating health insurance to an extent that make it unique in the USA?
That is definitely a confounding factor, although I’m curious how much of that is the urban vs rural split in other states. (The construction company was not in California but oil boom-town adjacent in Texas)
Part of ACA was the creation of regional health cartels. If you’re in a region with shitty networks, care may be hard to get. Where I live there’s a teaching hospital with a doctor focused medical network and a big Catholic hospital chain.
In my scenario, There is a good market for cardiac, OB, and some other specialties in each network. The rest is a monopoly— the catholic network doesn’t staff neuro for example, they just have consultants.
The main issue I've had is finding a gp in Portland Oregon. I want a male who is accepting new patients which is seemingly impossible to find.
If I need to be referred to a specialist though, I could be waiting months just for the initial consultation, and then months again before anything happens. Also, there just aren't specialists in my area for some things. Been trying to get a consult about dissociative disorder for years now.
My GP is great though, he constantly tells me about exciting new papers he's been reading and he loves to share science and research level stuff. It's clear that he loves his job, it makes me super happy.
(He's an MD, not NP, and he takes Medicaid)
Buy a failing business and leverage debt on it until you can’t, spend the money on yourself restructuring the business.
Buy a working business and gut it for multiple.
Buy failing businesses to offset tax burden.
This a meta level game, they don’t care about the outcome as long as it produces profit.
Product quality goes down the drain? That product is retirement homes, healthcare, food, utility, schools, it doesn’t matter. There is a million levels of separation and paperwork and a corp structure to prevent shit swimming up the stream.
Net result, if you live in America look around you, go to an auto service center, or a clinic. It’s been gutted for profit one way or another.
They often still buy those things, e.g. when there is a failing company in a competitive market that could do better with new management, but then no one complains about it because they're not making the product worse (and can't because there is actual competition).
The biggest moat is capital.
PE is buying up things like medical practices, law firms, vets, etc, where typically there would be an upwards path for one generation to hire new blood to cover their markets and then sell partnership stakes to them when they want to retire. But why should an owner of a practice sell to their junior staff when PE is there offering 2, 3, 5x as much?
Consolidation of these kinds of businesses at the hands of PE is endemic of systemic lack of capital acquisition of a generation of people, held down by debt and concerns about practical shit like healthcare.
PE is just a symptom of larger macro economic trends, namely the depletion of the next generation from free cash they could use to become business owners.
The better question is, why does a medical practice have a moat? What exactly is the PE firm buying? When the senior doctor retires, what stops the junior one(s) from renting their own offices and taking their patients with them?
The answer is presumably something like, non-compete agreements, or vendor lock-in from EMR systems, or some kind of insurance or regulatory bureaucracy. So then we need to identify what it actually is and do away with it so the next generation's juniors don't have to outbid Wall St to acquire it.
There is no shortage of investment looking for great returns. A market with huge demand not being met adequately is a dream to investors. Even more when you know the competition must continue to fuck their customers because they paid above market rates for the purchase and the business is saddled with debt obligations it must meet (Leveraged buyouts do that).
What could stop new competition from beating them out?
It's not capital.
Who the hell is going to take the risk on and for what? Take x billon dollars to build from scratch or near guaranteed profit to buy 50 practices and shittify them for near guaranteed profit.
Show me an example of trend reversal please of this happening in any sector. These are essentials and basics and they are captured, this isn’t a froyo start up that has a 3 year cycle.
It only works by having more capital to begin with.
Otherwise you wouldn't see consolidation where it shouldn't exist.
The PE firm creates market demand for the goods/services that the purchased company used to provide at a better value to the customer.
So yes, the 'creation' is a demand which is sort of a destruction of the value that the customers previously had. In a fair market, this demand can be met. But a PE buys strategically such that this demand is not possible to satisfy because the company they purchased is entrenched in some way (regulation/monopoly).
Younger veterinarians are drowning in school debt and can't buy the practices from the older folks that are retiring. So, private equity is basically snatching all of them up right now, betting that childless millennials are going to pay tons of money on veterinary care when their pandemic pups begin to reach end-of-life.
They're going to cut wages for all the staff, and hike all the prices, because unlike with human medical care, there's hardly any regulation (yet).
To put humans through this kind of misaligned system is the stuff of nightmares.
The predatory businesses are able to do the extraction only because of the practical monopoly they have in a neighborhood.
I believe the ops can be open sourced and replicated franchise style. And vets, who originally get into the career because they love animals will be drawn to it, and they have bills to pay, but that can be taken care of with a reasonable payment structure.
I hope someone else does this so I don't have to. But I think I have to at some point. I'd also love to hear if this is a dumb idea.
But on the human side many health systems are non-profit, and they generally aren't any cheaper or better quality than their for-profit competition. The real problem is local market power and lack of anti-trust enforcement.
* There’s probably more cost in medical supply, equipment, and certification than you’d expect. There’s standards for security of the medications.
* Most veterinary clinics have staff. That’s payroll expenses.
* Any new business will need marketing. You’ll probably want a large sign/billboard, a decent website, and social media.
* Just leasing office space and furnishing it is surprisingly expensive.
Imagine you're drowning in student debt and worrying about keeping your business afloat, when someone offers you $5M, and says you'll still get to work with animals, which you love, while they take care of the financial and business side, which you didn't enjoy. It's a no brainer for most people.
Two things, I think, might make the decision for them, in spite of that:
- The money is actually more than their business could be projected to make alone. This is because the PE firm isn't just buying the single practice but every practice in the area to kill competition. Get that captive market and you can charge more.
- The personal ownership freedom can be already lost on these independent people if they feel they are already tied down too much. I know this is especially the case in small medical offices where insurance and regulation can over-rule them. Feeling like you don't have control in this way can cause a lot of depression (tangent but look up how we condition mice in order to test treatments of antidepressants on them). At that point, the monied exit starts looking like a better option.
Even if you were willing to be as ruthless as a PE firm, raising your prices and sacking half your staff, and even if you were somehow an expert in financial engineering and business optimization, you still won't make the business as profitable as they can.
Or take $5m and get no more upside and 70% less work. The "work" here is dealing with regulations, insurance companies, administration, payments, and accounting, not actually looking after dogs
the PE model is often to provide a competent regtech/administration core and then plug heaps of regulated businesses into it and centralise all the admin
imagine opening a vet in SF in 1950 in a cheap shoplot and people just paid you with hard cash or cheques in person, you wrote receipts with a biro, and filed taxes once or twice a year on a few sheets of paper... compared to now
We were flabbergasted. Asked the tech what was optional or what was required as part of our visit and he said, oh, just the top line item for the exam. $95.
It has to be illegal to do that. I feel like next time I go in there they are going to give me the ol' Clark Stanley runaround.
This insanity is creating a crisis amount of pets being abandoned, and then euthanized by the animal services. People can’t afford to have pets anymore.
https://www.abc.net.au/news/2025-03-27/nsw-government-joes-l...
Approximately 45% of GPs in Australia work in practices owned by private companies
https://www.monash.edu/business/che/impact-and-engagement/re...
when people talk about how healthcare needs to be better and better and more and more, I say "tell me under your plan what diseases/injuries to what extant will not be treated: who do you say "no" to? Every country could spend every collective nickel they have, and some people still would not live to see the next morning, but in a way that's ok because there probably wouldn't be any breakfast either, that money was spent on healthcare.
What exactly are you calling for? I thought millenial and genz home ownership was the problem we need to fix. Are we going to sacrifice hipster housing for healthcare? Since most healthcare today is probably needed by boomers, think carefully about your answer.
Underresourcing the hospital was a deliberate decision by Brookfield to push for a government bail-out. Anyone who made money off this should be in jail.
Absolutely no idea what the rest of your comment is about. Our hospitals should have the resources to treat a sick child. Some might say that's the entire point of society.
They have no concept of how much cheaper medical care can be. They don't realise there is enough for everyone. They are blind to the fact that many other countries care for all of their people for a fraction of the price. The people on this forum live in a strange parallel reality where there is only enough to go around, even though that hasn't been true for a very long time.
So when people ask why they don't provide for the poor or fix their broken healthcare system by introducing single-payer healthcare, they'll speak to you like you're an idiot or a child. "Who is going to pay for that?", they ask, while paying an order of magnitude more for a GP visit than any other citizen of any other nation does. To them, you just have a poor understanding of economics.
One foreseeable consequence of this bill is that it reduces the ultimate value of starting and building your own practice, leading to more consolidation among existing large operators. As this is foreseeable, I also imagine that it's an unstated goal.
I ask because, no one else would believe that private equity is anything other than a middle man to the exact outcome you are describing, with the detour of cutting jobs and benefits from the remaining employees while simultaneously trying to buy the company for we cheaply as possible from the owner, and selling it at as a price as possible. PE steals value from both ends.
I already hear the downsides frequently from someone whose work is directly affected.
The steelman argument is that private equity is just property rights. If I build a business I get to decide what to do with it.
What most people are arguing against is a specific kind of PE where an institutional investor will either use aggressive financial engineering to force a profit, even if it kills the business, or when those same investors aggregate market share to the point where it is detrimental to consumers. Sprinkle in a little bit of heartless MBA bullshit, and that is what people specifically don’t like.
If there's some business that's getting by but the land it's on is more valuable (e.g. for housing) than the business, some investors buy the business, sell the land, make the business account for the land value, wind the business down if it can't, and there are apartments there a few years later.
> The steelman argument is that private equity is just property rights. If I build a business I get to decide what to do with it.
In medicine, it's a solution for someone who wants liquidity (buy kids new home, help local dog shelter, add a new mistress) and doesn't want to retire, yet.
The problem is that the terms are custom and YMMV as an existing patient of said practice.
I don't think that follows necessarily, especially not categorically.
You're gonna need to steelman that again, because in and of itself that is also not something I see as desirable.
Maybe they find a buyer in a doctor, maybe they don't, but PE provides them an exit that keeps the practice operating in the community.
Many people don't really run businesses efficiently. There was an interesting video I saw recently where a sole doctor practice made a few changes to their workflow that allowed them to hire more doctors and handle 2x as many people - I would expect a PE firm would pursue similar changes that help increase the number of people they can service, increasing competitiveness and lowering prices in the long run.
I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.
Ultimately, I think the issue is when people making decisions are able to treat the impact as an abstraction.
If the practice is to continue, there must still be practitioners working there. Id prefer they buy out the one retiring, but the retiree can sell to whoever they want.
One is ambitious, the other is a nepo baby.
In many cases that's a good thing, depending on what we mean by efficient. Lots of people run businesses in ways that make less money than they could, and often that's good.
> I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.
Doesn't the evidence suggest it is indeed often worse?
PE is scourge in this space. They’ve probably taken over every dental office already and now they push unnecessary procedures and whatever your insurance will bear just because.
Most private practices are small groups, not individuals. It absolutely sucks to have to find a new doctor who’s a good fit for you, when you’ve been seeing the same person for years or even decades. Usually when your doctor retires you rely on them to make a recommendation for a replacement. Usually that’s another partner in their same practice. At the very least, you (historically) expect them to sell the practice to someone they think is a worthy successor. Patients are fairly sticky.
And many of these PE sales require the selling partner to stay on for at least a year or two to ease the patients through the transition and so the patients get used to the changes before the doctor actually retires. That way, sticking around after the doctor retires doesn’t feel like such an upheaval.
PE isn’t that.
Step back and look at what it fundamentally is.
Person A has a business they want to sell.
Person B has a pile of money and thinks that that business is (or can be) a good investment.
That's it.
So, what happens if person A is prohibited from selling their business? Are they forced to keep working because they don't have enough other savings to retire on? Do they shut the business down in order to retire? Something else?
.
Calls to ban private equity are attempts to play "shoot the messenger".
Sell the assets maybe, potentially to somebody who wants to use them to run the same kind of business in the same kind of location with the same employees.
It's hostile to the consumer to call it the same business. A name change gives them the opportunity to decide for themselves whether the new owner is worth supporting. It's similarly hostile to the employees to assume that their loyalties can be bought and sold. Let the new owner of the assets re-hire them for the same position in the same location if he wants to, but lets not have them be for sale.
Maybe I'm making too big of a deal out of semantics, but every time somebody buys me it makes me angry.
> A PE interested and invested for growth is always the best outcome.
This is what we do. One portfolio company has a product on old tech. We bring in a product team, a CTO, internal tech teams. Help shape a roadmap to tackle the most egregious tech and product debt so teams can move faster. Fix non-existent or outdated pricing strategy that has not evolved with the industry. Fix, grow, or evolve GTM to reach new customers. Help bring fresh leadership resources in when needed.
Industry is typically "boring" and systems are valuable, but aging. We invest, modernize, and try to grow new rev streams, new customers. Portfolio is SaaS focused (can't speak for those that invest in real estate and healthcare).
The employees of the PE also co-invest so everyone is aligned to help the portfolio companies grow and exit. This is a multiyear process.
>> The employees of the PE also co-invest
Is this voluntary, or mandatory?
I ask because I've seen clauses along the lines of "75% of bonuses are paid in shares, not available for sale for 5 years."
Using bonus money to buy shares props up the share price, but delays the employee actually seeing the bonus for 5 years. Seems pretty win-lose to me, and kinda puts me off.
Is this a standard practice you mean by co-invest?
(As an aside, I'm not a fan of buying shares where I work, that's not a good portfolio-diversification model. If the business goes under it's not good to lose both your job, and investments, on the same day.)
On side note, its rare to see anyone fixing the old tech, its hard to fix, needs a different kind of talent thats hard to hire for the PE money. The folks who can understand some one else's decade old code and run their imagination through all the possible assumptions or trade off that might have been made in code/system are rare to find.
Finding new customers, finding more things to sell, finding synergies with other items in your portfolio, increasing the price for existing products are more realistic.
My PE is SaaS heavy portfolio. Pricing strategy, GTM, product roadmap; companies have rev, good moat, good customer base. But clear opportunity to grow rev.
Many companies are held by original founders. Leadership teams in eng and product have been the same for a decade+; lacking exposure to how the industry is shifting. AI, for example, has slow adoption in some cases.
I actually made that thought experiment. Disallow selling businesses. Disallow selling shares. Disallow stock market. Disallow mergers. The only way to acquire a business is to found it or to inherit it. The only way to quit a business is to shut it all down, with all assets liquidated, all liabilities settled, and all contracts terminated.
The main downside is that it's harder for to make money. Otherwise... I only see positives. And no, it wouldn't kill innovation. The investors would just have to invest the old fashioned way - by founding companies or expanding their existing businesses. As for job security, we already don't have it in the current system.
In your model, the only possible business owners would be those with major capital resources to begin with, encouraging the spread of existing businesses into a sprawl: Walmart is now your doctor, pharmacist, and pharma manufacturer. Nobody would start a small business because they'd have to carry all liability, any new ideas are limited to spread at a glacially slow pace, because companies can't be aquired or acqui-hired, but can instead only scale on their own revenues.
I'm currently part of a "small" business/factory (around 50 employees). The owner is nearing retirement. Are all 50 of us gonna hit the streets tomorrow? Should our customers, many longstanding over 20 years get their contracts terminated? Do they get any warning? Can they easily switch to other suppliers? Is our offering somewhat unique?
Frankly, I think the thought-experiment is very incomplete if you can't see major downsides.
Disallow eyeglasses. Abolish money.
Any other good ideas?
Sure, you are allowed to start a new business. But where would you get money? You can't sell your dung transport business, and you don't have enough money of your own to just start a new business from scratch.
(never mind that "selling assets" is just a workaround for "selling business")
PE bought two of them, combined them into one, and now they, at about the same cost, do what they say they are going to do, answer the phone, hire competent people, and do a good job.
Likewise, PE has bought up most of the local plumbing and HVAC, and that's been a bit of a bummer, and gotten more expensive, but if you need someone right now, they are there (and answer the phone, etc), as opposed to the local concern who may be on vacation and can get back to you in 2 weeks.
There are some really good local small businesses/trades people, but like the 1950s, in a lot of aspects they are overly romanticized.
I'm not a huge fan of PE but the point of economics to deliver cheap and quality goods to consumers not keep people in a job.
In healthcare in US in particular I think the main thing that capital should be (if regulators allow) boutique / specialists that e.g. are the best in the biz at doing MRI scans, in some states my understanding is that it's literally illegal to start a business aiming to make one small part of the process better.
Streamlining everything. Sometimes this is done in a bad faith way, but it’s often not difficult to do it in a good faith way.
Some simple examples:
- right-sizing staff (can be reducing, increasing, or changing roles)
- improving marketing (e.g., simple things like customer reactivation, packaging the product/service better, or just plain, ol’ getting the word out better via stuff like before/after pics or success stories)
- improving operations (e.g., better organization, better processes, better communication, better training, better logistics, etc.)
> Delivering better profit margins?
Improved profit margins are a byproduct of the things listed above.
Simple example pitch that many general practitioners might consider using (based on local laws, of course):
“Insurance covers C, Y, and Z. I can offer these additional services for A, B, and C that are not covered by insurance.”
Where I live, you get a lot of this via “concierge doctors”, but that system can go far beyond basic concierge service, and people are willing to pay for top quality care.
The problem with healthcare “economics” is that providing high quality care is likely not as profitable as middling care, or sub-standard care.
You say that economics is meant to deliver cheap quality goods, but in reality here economics for PE is value extraction and has nothing to do with consumer good at all - unless of course there’s more profit there. Most of the time, there isn’t.
It survived, then thrived, by making its products so appealing that customers would buy them anyway.
So, effectively, both.
It's a steelman argument to be clear I'm not entirely convinced by it.
Contrary to popular belief, being intelligent in one thing does correlate with being intelligent at other things[1]. For doctors, the comparison with private equity (MBAs?) might be close, but it's not hard to imagine the targets of other PE rollups have owners that are more average in intelligence, think plumbing or roofing.
> Contrary to popular belief, being intelligent in one thing does correlate with being intelligent at other things[1].
> [1] https://en.wikipedia.org/wiki/G_factor_(psychometrics)
Which section of that very long article are you claiming supports your assertion?
Here's a bit from the start of the "Concept" section:
>> In a famous research paper published in 1904,[8] English psychologist Charles Spearman observed that children's performance measures across seemingly unrelated school subjects were positively correlated. The consistent finding of universally positive correlation matrices of mental test results (or the "positive manifold"), despite large differences in tests' contents, has been described as "arguably the most replicated result in all psychology".[9]
That explicitly contradicts your assertion.
vs
>The consistent finding of universally positive correlation matrices of mental test results (or the "positive manifold"), despite large differences in tests' contents, has been described as "arguably the most replicated result in all psychology".[9]
How are they contradictory? Did the first part of my comment make you think there was a negation?
None of the private equity chains with the sans-serif fonts, simplified logos and trisyllabic names are doing this, though. It's bad marketing. Patients don't want to walk outside to an MRI machine in the parking lot. It feels sketchy. Never mind that they score just as well on the ACR image quality tests as the in-room machines. Who the hell knows what that is?
In reality, it's the county hospitals and big universities that use them! Places that have in-house physicists who can argue for what really makes sense in practice. A major problem with healthcare as a business is that the customer does not usually understand the product, but they still need to buy it, and there are time constraints.
Seems like you could build a hallway around the trailer; if you do it right, nobody knows it's a trailer in the middle of the building. If you do it really well, you can still pull the trailer out.
They buy one (or more) companies, often with only the slimmest understanding of what those companies do, slash opex by gutting the company with layoffs (yay EBITDA), maybe staple a few such companies together with leveraged buy-outs, then resell the whole bundle for more than they paid.
From experience, they don't give a single crap whether the resulting mess still functions. They care about selling the company for more than they bought it for. That prospect is only tenuously and at best accidentally related to whether the company still functions.
The private equity companies I've had to deal with were full of braindead MBA spreadsheet monkeys and used car salesmen. Their chief differentiator was that they worked 80 hours a week and were enthusiastic about laying people off without much deliberation.
Thinking private equity is "more intelligent" than business owners is like thinking house flippers are "more intelligent" than home owners. No. They know how to rip out carpet and replace it with laminate on the cheap. They know how to cut corners and hide it. They know buyers will over value a fresh veneer of paint. They don't give a shit about the long-term health or value of the house. They are not better stewards of houses. They specialize in short-term profit maximization and that is literally it.
Should they be outlawed from selling to certain classes of investor? Which?
Should they be outlawed from selling to certain classes of investor? Which?
We have run this country on an assumption that we must give businesses a high amount of freedom. An argument can be made that businesses have been given too much freedom in our system. We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form.
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
Why stop at healthcare? Why not other essentials of life, like food or toilet paper?
Many of them already lack profitability without subsidy.
Many agricultural products all pass through the same mega-sized processors and entities. Driscoll’s, Tyson, etc.
We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
Like what?
>Many of them already lack profitability without subsidy.
That doesn't mean anything without context. How are the non-PE farms doing?
>We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
sanitation: please see https://en.wikipedia.org/wiki/Waste_Management,_Inc.
water, but not power, or natural gas?
I wasn’t talking about private equity farms versus not, I’m generally talking about industry consolidation.
Sanitation includes sewers which are typically municipal.
Power and natural gas are legal monopolies with strict rules on pricing.
There are also public electric utilities such as Cleveland Public Power.
https://www.npr.org/2026/07/09/nx-s1-5885008/department-of-j...
When consolidation happens collusion always follows, along with higher prices, and fines that are a tiny part of the total gain.
https://en.wikipedia.org/wiki/List_of_foodborne_illness_outb...
If a product isn't nationally consolidated, it can't have a national foodborne illness outbreak.
Which is bad for PR and great for clicks, but it's entirely unclear whether we're better off on average. What about all the years where we didn't have a mass outbreak? Would it be better if every state/county had separate food supply chains, and they had the same rate of illness, but it's more randomly dispersed so it doesn't make it to national TV? Think the difference between airplane crash (maybe one incident per year, hundreds of deaths per incident) vs car crashes (40k/year)
If we simply envision a nation without diarrhea have we not eradicated it in our hearts, where it matters mos
You have fewer single points of failure, but more opportunities for failure and a tougher time addressing it via inspection, and less capital available to implement compliance.
You don't need to disallow them for necessary care to be provided. You can just have public healthcare programs. That can look like publicly-owned hospitals or regulation that private hospitals must provide certain services under certain conditions if they want to keep operating. Private healthcare then works to provide more than that basic service that fulfills necessary care, to the benefit of the public that can afford more.
How much would you want to sacrifice your 20s and early 30s? How much would you need to work in the middle of nowhere where your kids won’t have the best opportunities?
Not-for-profit entities can still pay market rate wages to employees and owners.
Do you realize that when Walmart moves into a community, prices charged for everyday things overall drop significantly, both at Walmart and their competition, which means that poor families are able to buy more with every dollar.
What do you have against poor people?
Walmart is subsidized by the government to the tune of $2,000 per employee due to their low wages: https://rmfu.org/taxpayer-dollars-subsidize-wal-mart/ [1]
They then get to skim the other side of those subsidies, too, since they sell so many items that qualify for SNAP and WIC, as well as being one of the largest if not the largest prescription supplier in the country.
(25% of Walmart employees qualify for Medicaid https://mafainsurance.com/how-many-walmart-employees-are-on-...)
So their employees on SNAP and Medicaid turn right around and spend that money inside Walmart.
> both at Walmart and their competition
What competition? When Walmart comes to town, the competition closes.
[1] Probably a lot higher since this article is about 20 years old
>Walmart is subsidized by the government to the tune of $2,000 per employee due to their low wages: https://rmfu.org/taxpayer-dollars-subsidize-wal-mart/ [1]
And what happens if walmart closed up shop? Do those employees magically evaporate and not need benefits? Why are we putting the blame on the employee's best employment option?
>What competition? When Walmart comes to town, the competition closes.
Why? Because they're sending goon squads to trash all the existing businesses? If walmart replacing "the competition" because they're offering lower prices and consumers are switching, why is this bad?
https://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act
>And what happens if walmart closed up shop
Everything explodes and people die in the streets.... No, other businesses move in to fill the economic needs because there is a profit to be made and provide jobs in doing so.
>Because they're sending goon squads to trash
You have a horrifically simplistic world view and can't imagine where goon squads actually are.
There was an article around 2 decades ago on how Walmart manipulates prices at an unimaginable scale via their suppliers. If you supply Walmart they automatically become your biggest customer. Walmart knows this, and has you by the proverbial balls. If you don't meet their demands they drop you in a heartbeat which is a death sentence for any business who's capitalization is not in the 10s of billions. There was a saying in this article I can no longer find but to summarize.
"To compete against Walmart is to invite death. To work with Walmart is to embrace it".
Simply put they are so large they have near monopoly power over a good chunk of manufacturing.
So what's the complaint here, that walmart negotiates aggressively, passing those better prices to buyers, and that's... bad? Given we're in a thread complaining about healthcare, should walmart do the opposite, instead using the insurance company strategy of encouraging their suppliers to pad their margins, so they can offer "modest" (in % terms, high in absolute terms) markups?
An older relative had a very successful small conglomerate of businesses. One of them manufactured something costing close to $100 that Wal-Mart was interested in selling in its stores. After extensive negotiations, my relative told the Wal-Mart VP no because Wal-Mart was pressuring them to use cheaper parts that would make the product wear out more quickly. Wal-Mart didn't care because they'd be able to make the sales and then consumers would come back to buy again sooner, but my relative felt that was dishonorable. The VP said it was the first time a potential supplier ever walked away from him. They are notorious for their abuse of suppliers, and the ethical concerns are often very palpable. You might suggest this is simply market forces playing out, but we decided long ago that monopoly power often leads to a market we don't want to see in this country.
We the people get to decide what kind of society we want to live in. Their monopoly power means that in so many of the rural areas where they are, they might be one of the few viable employers. When people are poor, it's not so easy to just tell them to relocate to another geographical area, so it's easier for the entities benefiting from that to maintain the status quo at the expense of others. If we decide that for Wal-Mart to stay in business in the USA they need to pay employees more, with health insurance, then so be it. If they can't, then they can just go out of business and be replaced by a company that is able to navigate that balance better, offering pretty low prices while paying a bit more in wages.
VC is bad because of the concentration of power, same reason Walmart is.
Does SNAP need a better system to provide healthy food? yes.
Should employers be required to provide sufficient earnings such that employees do not require SNAP? Also, yes.
Is blaming employees who are on SNAP due to Walmart overhiring and cutting hours of at the threshold where the earnings would cross into full time with federally regulated benefits in order to pass the cost of operations to the public acceptable via absurd reductive reasoning a bald case of blaming the victims? Yes.
I'm not sure whether you are pretending that Walmart's practices are acceptable, due to a willful disregard for the complexity of the larger systemic failures that permit corporate abuse, or due to simple ignorance.
I'm not sure which looks worse, but neither makes you seem compassionate. Though the fat shaming does make you look like an ass.
Is Walmart to blame they hired a single mother of 3 for $20/hr? Would this women be better off if Walmart never existed and she was unemployed?
And then turn around and blame Walmart for selling essential food items for low prices because SNAP can be used to pay for them. Would you rather SNAP beneficiaries pay more for groceries so they have less to eat?
If you think about this a bit, I'll bet you can spot the flaw in your own argument.
They're probably thinking the same thing as those darn busybodies who outlawed child labor.
Unpopular knowledge is that these businesses are generally illegal in their current forms under existing US law. The relevant laws are still in effect, they are just rarely enforced. The scale of the lawbreaking runs to the trillions of dollars annually, and it directly harms every US consumer.
The illegal conduct is so pervasive that even explaining the existing federal law makes one sound ridiculous, because companies have been explicitly advertising illegal behavior for decades. Because there is no sanction.
One of my faves is the notion that $BIG_RETAILER can buy in bulk and get better pricing, which they pass on to the consumer. You may have seen a company advertise something like this. It sounds like smart business! There is an active federal law[1] that explicitly prohibits this arrangement.
Lack of enforcement of that law is a factor in the disappearance of the American "high street" and the demise of many small retailers.
My #1 call for reform in the US is to simply start enforcing laws, even if doing so makes rich people/companies uncomfortable.
I'm not a lawyer, but a cursory search shows there's a bunch of carveouts. It's not a straightforward ban on all favorable pricing for big players. For instance, if there's an actual cost justification (eg. bigger buyer = more efficient shipping) that's allowed. Same with offering volume discounts that are available to all buyers. That's not to say everything's above board, but it's not as simple as "wow big box stores get better pricing than mom and pop shops, so there must be federal laws being violated".
Yes.
I'd expand that to any type of business that has effectively inelastic demand through the ability to hold people emotionally hostage.
So, for example, in addition to hospitals also include veterinarians, funeral services, family planning, etc.
Soulless PE vultures should be barred from all of this.
https://www.bloomberg.com/news/articles/2025-06-06/private-e...
It makes sense to me that someone could come in and say "hey, let me run the business + finance side of the house while you practice medicine" and at least on paper I can see a real world where that works out for everybody.
Of course, soon you end up with dentists pushing unnecessary procedures and more, so it doesn't always works out that way.
I'm not arguing with you; I'm legitimately curious what happened to that model and why PE has swooped in as more attractive to doctors. Maybe it's the payout and/or the fact that they don't have to handle business owner decisions at _all_ anymore?
This is valuable for business owners, because it gives them a way to get the value out of a failing business without having to ride it all the way into the ground.
It's valuable for consumers because it provides locations to shop for halloween supplies.
PE attacks organizational sclerosis, can save companies that otherwise slowly deteriorate, reallocates resources faster, creates an unusually powerful form of corporate governance, Debt can impose useful discipline, can provide capabilities that smaller companies couldn't build themselves.
A society doesn't necessarily benefit from preserving every existing job. It benefits from creating increasingly productive jobs.
This needs to be defined a little bit better.
If I own a hospital that makes infinite money and every patient that comes to it dies the economy measures this is infinite productivity. This is contrived, but really matches some of what we see in real life.
This is why making a measurement a target can be horrifically destructive and contrary to the actual goal society wants.
The west doesn't seem to believe in the idea of social stability over increased profits which can lead to things like corporations being the social structure that is optimized for rather than the wellbeing of the individuals it contains. Left to run out of control the society can collapse.
You wouldn't have any business if all, or many, of your patients die.
The west has been an oligarchy for several decades at least, so it's not that people in the west don't believe in social stability, it's that they are living in the hollowed out shell of the former "company" where that doesn't exist. We need to optimize for the people's prosperity and well being.
What statistics are you looking at that makes you draw the conclusion that people are WORSE off today than, say, 20, 30, 40, years ago?
There is also the effect where it doesn't matter if are or are not doing better by the numbers, it question is do they feel they are doing better. People act on how they feel, not on how they are.
It's a false choice. The healthcare system has long dealt with and deal with that situation without private equity.
Gift link: https://www.economist.com/podcasts/2026/02/19/a-love-letter-...
One specific practise I’d like to see banned is private equity buying companies with debt the company then assumes. It staggers me that it’s legal.
What alternative are you imagining?
If you are putting the debt on a shell company’s books, you aren’t putting debt on the buying companies books.
Are you proposing that only an established company can buy another business with profits from their operations or something?
If I start a company with a loan and want to buy 3 HVAC companies in my area, is that allowed under your rule?
then they extract as much cash as possible while the debt ballons. so called ‘extracting brand value’.
the investors usually do quite well
Probably the biggest problem with medical is that it's incredibly regulated for the industry's benefit.
From fee-splitting prohibitions to FDA regulated medical devices, almost all of the day to day regulations I've dealt with in healthcare are squarely aimed at ensuring safety, protecting privacy, preventing fraud and controlling costs.
a financially inefficient business may be a business that employs more people than it absolutely needs, a business that treats customers/vendors more generously than it absolutely needs to, or even a business that exists as a going concern that would be more financially efficient if sold off for parts or went into bankruptcy.
i personally don't believe financial efficiency should be the guiding principle for everything or really anything, and I believe as a society we should account more for non-financial efficiencies (like treating human beings generously and kindly), and I think it's fine for an inefficient business to continue existing if that means more people have jobs for longer or customers/vendors are treated more generously. fundamentally, i think this line of thinking is dehumanizing, as it views the world (humans, nature, information, knowledge etc.) as resources/materials and not much else.
that all being said, i at least understand the principles and the materialist idea that everything can be viewed as material/resource and why people pursue them (esp because pursuing them effectively can make you fabulously wealthy).
i often say when talking about this stuff with friends: if you're willing/able to see everything (including/especially people) as resource/material, you're well positioned to obtain a lot of material resources/material. whether that's a good thing for you or the rest of the world is another question (and my view is that it's straight up bad).
People who are vehemently against PE generally do not have any idea of how the system works
Nice summary of the legal landscape here:
https://www.dlapiper.com/en/insights/publications/2026/07/co...
There’s a reason very few guild-like professions have survived to the present day.
Then they should work for the doctors who do.
Also, I don't think they're particularly opposed to owning their practice. I can understand them not wanting to manage a business. But for that problem, they can hire professional managers. Which is basically how hospitals work; if the doctors all want the CEO replaced, he gets fired. There's a physicians board and the trustees tend to listen to it.
She stayed in the race for Super Tuesday in 2020 rather than consolidating the progressive vote for Sanders.
Right before, her campaign accepted millions in funding from billionaires after promising not to. Her comment was roughly, as soon as others stop taking billionaire money, I will stop.
The short-term fix is banning PE. The long-term one is restricting the leverage these groups can take. Then put limits on upstream leverage. We have these across our economy. We just don’t apply them to this sector.
Most state bar associations require a lawyer (or group of them) to own law firms. That _doesnt_ prevent law firms from doing crazy deals to gain liquidity for their partners, including from private equity.
Dictating who has to “own” something just incentivizes people to separate ownership from financial benefit. In most cases that’s just plain worse than letting real ownership happen.
If there is a business practice you don’t like, regulate the practice, not the corporate structure.
In most states a law firm's owners must all be individuals licensed to practice law (i.e. lawyers).
Why not the same thing for medicine?
Hospitals are massive byzantine organizations with so many management layers and so many shady billing techniques, from charging for procedures not performed, to changing what they charge you based on when they find out how much you can pay, it's crazy. What other business forces you to sign a waiver agreeing to pay whatever they decide to charge you, without them telling you what that is, or they will refuse to serve you?
It's important to fight it now before it is too late and other places also fall apart into a degraded, predatory, dystopian US system !
Then, they buy up air ambulance services to unnecessarily fly patients to other hospitals they own because it's more profitable at the expense of care delays and worse outcomes. Meanwhile, patients and their families are stuck with exorbitant air ambulance bills $20k-60k.
Like banks, failure of a healthcare institution can be destructive for its customers and the community. If a bank goes under, especially a significant one for the community, regulators see that it's acquired by a surviving institution - often with only a weekend of downtime.
The usual complaint is going full extractive mode, desperately squeezing profit and selling inside 3-7 years.
So, yeah, we can keep private investment. But they're fucking stuck with it, trying to maintain a healthy business for 20 years.
Ask an American hospital how much something costs - you will get a completely fake price back, this is a sign of a totally broken market.
And why is this so prevalent? It's subject to huge subsidy and regulatory capture
Because the law doesn't force them not to?
It's very wild to me that you're like "This organization is lying to me, so what we need less of is people telling them what to do."
A) can probably only be fixed with regulation. Why would hospitals and insurance otherwise make prices transparent? The current state serves them really well.
You think the government tells hospitals to lie to you? The hospitals lie because the government doesn't force them not to. Laissez-faire capitalism causes that. Regulation is needed to fix it.
What do you think would force hospitals to give you real prices if not the law?
The PE buy-up of these core local businesses isn't great for society generally, service delivery and the existence of a middle class.
The other thing I feel gov should do is force a separation of distributors and point of sale, with rules that allow smaller business to buy at the same pricing as larger.
People seem to forget a key requirement of capitalism is for government to create a level playing field for business. I cant see a better way to do this, and I suspect it would be very beneficial to the bulk of society if gov made some changes down this line.
That's only one part of economies of scale. The technical and legal compliance costs for running a provider organization are also killing small practices. And provider organizations also consolidate in order to gain power for negotiating rates with commercial insurers.
Private Equity can afford to have people sitting around all day figuring out tricks and optimizations to save a buck here and there, and this is a power imbalance because the plebs care about things like spending time with their family, and they don't spend all their time trying to save a buck.
Maybe one day the AIs will optimize for us while we spend time with our families. And if a new vet opens that costs $15 less, the AI will route customers to the new business, driving prices down, until we reach 0 profit margin across all industries.
There's probably like a 10 trillion dollar incentive to not allow AI to truly work on behalf of individuals though, so we'll see what happens. For instance, just look at the ad industry alone; if AIs are shopping truly on behalf of individuals, and this becomes wide spread, then the ad industry is just gone.
Vets see animals, not humans.
I am sure most workers would prefer to get that extra 11% as a cash raise, but because healthcare costs are out of control the same care costs 11% more.
Certainly some companies will throw up their arms and hire someone overseas instead.
Medicine is already held back enough by the lack of ability to use debt to finance its sales, unlike almost every other industry; you can repossess a car but you can't repo an implant or administered drug, forcing everything to be paid for in cash upfront. Medicine needs as much access to capital as it can get.
Injecting PE into healthcare is what made it vastly worse for everyone in the first place. You can't have it both ways.
VC's can still fund companies that are making expensive new products.
Banks (and PE...) can still underwrite loans for these things.
We have many solutions for capex-intensive businesses and have had these for over four hundred years. LBO-type PE is not even fifty years old yet
I think you misunderstand me. I think what is proposed to be banned (employers of doctors who are PE firms) should not exist. It is strictly not necessary, and there's an excellent example of the consequences playing out across Massachusetts right now (which explains the bill's introduction by Warren)..
I'm not sure how we decided only lawyers can run law firms but that anybody can operate a hospital...
Apologies if an AI summary is offensive to some, but here we go:
> The US is a world leader in advanced and specialist medicine, but its overall system for providing affordable, accessible, equitable medical care to its citizens ranks poorly—last among the 10 comparable high-income countries in the strongest recent comparison.
Both sources are the same site:
https://www.commonwealthfund.org/sites/default/files/2024-09...
https://www.commonwealthfund.org/publications/fund-reports/2...