Thread

Bill to Ban Private Equity from Owning Medical Practices

509 points · 384 comments · paimapi

NegativeK · 1789944184 · focus · HN ↗
Can someone steelman private equity, please? I'm honestly looking for the upsides (for non-investors) of when PE moves into an industry like medicine and begins buying up businesses that traditionally aren't already large chains.
I already hear the downsides frequently from someone whose work is directly affected.
1. twoodfin · 1789944333 · focus · HN ↗
  The upside is to the folks who sold the businesses they owned.
  Should they be outlawed from selling to certain classes of investor? Which?
  1. Grombobulous · 1789944624 · focus · HN ↗
    It should be more about making certain levels of consolidation and deep erosion of local ownership illegal.
    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.
    gruez · 1789945898 · focus · HN ↗
    >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?
    wyre · 1789946251 · focus · HN ↗
    Hippocratic oath?
    Grombobulous · 1789946371 · focus · HN ↗
    You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
    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.
    gruez · 1789947095 · focus · HN ↗
    >You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
    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 <a href="https://en.wikipedia.org/wiki/Waste_Management,_Inc" rel="nofollow">https://en.wikipedia.org/wiki/Waste_Management,_Inc.
    water, but not power, or natural gas?
    Grombobulous · 1789947410 · focus · HN ↗
    Google “taylor farms cyclospora” or “tyson beef prices shortage” for an example of the problems of highly consolidated processing.
    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.
    gruez · 1790008104 · focus · HN ↗
    >Google “taylor farms cyclospora” or “tyson beef prices shortage” for an example of the problems of highly consolidated processing.
    I already addressed cyclospora in another comment, but how is consolidation or tyson beef supposed to be blamed for the shortage? Media reports blamed the shortage on droughts and/or screw worms, hardly a tyson issue. Not to mention tyson hasn't exactly been raking it in during all this shortage:
    >Yet despite record beef prices, the “Big Processors”, as Mr Trump calls them, are not thriving. Shares in Tyson, the largest, have tumbled by 40% since 2021—and by 7% since it cut its earnings forecast on September 3rd. It now expects its beef business, which brings in 40% of revenue, to lose as much as $775m this year. Trouble in the division has dragged the company’s overall operating margin down from 8.5% in 2021 to 2.6%. JBS, which is Brazilian, has said its North American business lost $427m in the first half of 2026.
    <a href="https://www.economist.com/business/2026/09/10/beef-has-never-been-pricier-and-meatpackers-are-suffering" rel="nofollow">https://www.economist.com/business/2026/09/10/beef-has-never...
    everfree · 1789947438 · focus · HN ↗
    > Like what?
    <a href="https://en.wikipedia.org/wiki/List_of_foodborne_illness_outbreaks_in_the_United_States" rel="nofollow">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.
    gruez · 1789948381 · focus · HN ↗
    >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)
    jrflowers · 1789954841 · focus · HN ↗
    Hmm yes. Two deaths, over a thousand hospitalizations, and not a single state in the US with zero cases, but those are just things that are real and happened which means they do not take into account things that didn’t happen or things you could imagine in your mind.
    If we simply envision a nation without diarrhea have we not eradicated it in our hearts, where it matters mos
    alex43578 · 1789957343 · focus · HN ↗
    Absolutely hilarious that you think a small farm has any better hygiene than a large farm.
    5upplied_demand · 1789960866 · focus · HN ↗
    Nobody said that, nor is it relevant. The point is if the food supply is more diversified, we are less exposed to single points of failure.
    alex43578 · 1789965909 · focus · HN ↗
    It’s absolutely relevant because a diversified food supply would result in smaller farms, other things held equal.
    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.
    jrflowers · 1790135545 · focus · HN ↗
    Imagining a guy gasping out his last words as he succumbs to life-ending diarrhea in the back of an ambulance that’s long since cut its lights and sirens, “This is the best of all possible capital allocations for hygiene compliance”
    5upplied_demand · 1790181945 · focus · HN ↗
    I would love to see your analysis that proves this is unequivocally worse than the current state.
    pixl97 · 1789951744 · focus · HN ↗
    >Like what?
    <a href="https://www.npr.org/2026/07/09/nx-s1-5885008/department-of-justice-charges-three-major-egg-suppliers-with-price-fixing" rel="nofollow">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.
    [deleted] · 1789947194 · focus · HN ↗
    [deleted]

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