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Bill to Ban Private Equity from Owning Medical Practices

509 points · 384 comments · paimapi

  1. NegativeK · · 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. andsoitis · · focus · HN ↗
      > Can someone steelman private equity

      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.

      1. pixl97 · · focus · HN ↗
        > 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.

        1. andsoitis · · focus · HN ↗
          > 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.

          You wouldn't have any business if all, or many, of your patients die.

          1. metiscus · · focus · HN ↗
            To be fair, in an emergency one does not usually get to choose the hospital they are taken to by the ambulance company.
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