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Bill to Ban Private Equity from Owning Medical Practices

509 points · 384 comments · paimapi

  1. throwaway13337 · · focus · HN ↗
    There's a pattern to the kinds of companies PE buys and I think it points to the real problem.

    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.

    1. Waterluvian · · focus · HN ↗
      The Americans simply will not reject their broken for-profit medical system wholesale. What I see is one more attempt at chipping away at it in hopes that maybe they can succeed piecemeal.
      1. claytongulick · · focus · HN ↗
        I'm not sure anyone has solved the problem, though.

        "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.

        1. Gigachad · · focus · HN ↗
          I don’t think it’s useful to categorise these things as “solved” or “not solved”. They always exist on a scale.

          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.

        2. robmccoll · · focus · HN ↗
          The United States has both market forces and massive access problems. I'm not sure you can establish that causal relationship.
          1. georgemcbay · · focus · HN ↗
            > The United States has both market forces and massive access problems.

            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).

            1. LoganDark · · focus · HN ↗
              I'm in the US, and I see my GP every two weeks + can arrange for an appointment within about a day or over the phone whenever I need it.

              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)

            2. milesskorpen · · focus · HN ↗
              This is not my family's experience on distinctly not-concierge-medicine Kaiser Permanente in the Bay Area. Always meet with doctors (and NPs), have gotten in quickly when necessary, etc.
              1. stephenhuey · · focus · HN ↗
                California is the only state that regulates wait times for specialists. When you uttered the words "Bay Area" it signaled that you enjoy better service than most Americans. I know people in states very close to yours (as well as my own) who have had extensive wait times.
                1. JumpCrisscross · · focus · HN ↗
                  > California is the only state that regulates wait times for specialists

                  Really?

            3. throwup238 · · focus · HN ↗
              I don’t remember the last time I had to wait more than a few days to see a GP or more than a week for a specialist on an employer’s PPO insurance plan. I’ve had them at several employers ranging from university to FAANG so it’s not exactly something only fabulously wealthy people have access to.

              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.

              1. anon291 · · focus · HN ↗
                On the other hand, most states with significant tech workforces have Medicaid which most people will qualify for if they're laid off (I did!) and these are excellent. People pay for cobra despite a public option being available.
              2. stephenhuey · · focus · HN ↗
                FAANG employee health insurance? Something like 1% of American workers get that, if even that many. Then throw in my oil company friends here in Houston and a few other industries which give premium benefits and you still have a tiny subset of the American workforce getting exceptionally strong benefits. Not at all indicative of the experience of most Americans.
                1. throwup238 · · focus · HN ↗
                  The universities I worked for (both public and private) provided the same level of PPO insurance, as did a random fitness startup, a clinical diagnostics company, and a construction company. I invite you to reread the part where I said “several employers [plural] ranging from university to FAANG”.
                  1. stephenhuey · · focus · HN ↗
                    Here in Houston, my friend who works at UH has excellent insurance. A quick search online confirms that it is much better than average. Different structure for employees at Rice, my alma mater, but still excellent. Gemini describes these employees being in a kind of "benefits bubble" here in Texas, and they're getting something way better from what most Texans get.

                    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?

                    1. throwup238 · · focus · HN ↗
                      > 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)

              3. Spooky23 · · focus · HN ↗
                That’s not necessarily an insurance issue.

                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.

            4. diamondlovesyou · · focus · HN ↗
              > 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.

              1. stephenhuey · · focus · HN ↗
                Urgent care would not be urgent if you had to wait months. Hang out with a few elderly people who actually need to see specialists more than people like me. Over the years, I've heard plenty of stories from people I know waiting multiple months to see specialists.
                1. diamondlovesyou · · focus · HN ↗
                  Yeah, and specialists are "usually" not available via urgent care. If not for the like of urgent care, specialties would be worse. The fact that it takes so long for such access is still a demand and supply problem at the end of the day, no way around the knowledge bottleneck - fixing that means shifting demand to different, more plentiful, supply (doing that soundly is not trivial, but likely easier than attempting to multiply the specialists, depending on the specialist). ERs are expensive because they have to have certain specialties "on tap" 24/7, among other reasons. This is not a unique problem of any single health-care system.
              2. AngryData · · focus · HN ↗
                I can do anecdotes too.

                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.

              3. Spooky23 · · focus · HN ↗
                30 years ago, you’d just call your GPs office and they would have told you to go to the ER. Instead your moms insurer paid $150 for an interaction that likely funneled you their medical networks local hospital and added low value.

                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.

                1. ChickeNES · · focus · HN ↗
                  > relationship with a doctor or practice

                  What if I don't care about this whatsoever?

                  1. Spooky23 · · focus · HN ↗
                    Go to a doc in the box and be happy.
              4. lovich · · focus · HN ↗
                If you break your back in a place like Canada or the UK you are also going to be seen quickly.

                Both systems triage. The wait for non urgent needs in the US system is still weeks to months

              5. georgemcbay · · focus · HN ↗
                > 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.

                Ok.

                But in the reply you are responding to I specifically carved out an exception for emergency situations:

                > I can only surmise these people haven't been to a non-emergency doctor since prior to 2020.

                Your mom's situation was certainly an emergency.

                I'm glad she was seen promptly, but her situation is very different than someone who needs to see a specialist for something that is not immediately life threatening (even if waiting could have serious long term health consequences).

              6. underlipton · · focus · HN ↗
                Urgent care is not a replacement for a family doctor or internist who can track your health across long periods of time. That's like comparing a substitute teacher to a tutor; a sub might be able to answer your questions, but they cannot track your academic progress over time and help you tackle an extended course.
                1. ryandrake · · focus · HN ↗
                  Exactly. Last time I moved to a new area, out of about 5 local family doctors, the shortest wait time for a New Patient Appointment was eight months. In the good ol' non-socialized-medicine USA. So for eight months, we had to rely on urgent care for every medical need.
            5. anon291 · · focus · HN ↗
              I have never waited more than a day to see a doctor and hardly more than a week to see a specialist. I'm on a ppo plan so I just make an appt. If someone doesn't have an appointment I find someone else.

              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.

            6. AnthonyMouse · · focus · HN ↗
              > 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.

              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.

              1. underlipton · · focus · HN ↗
                It's not worth it to solve any of the problems, let alone the biggest problem, if we can't solve all of the problems immediately, after all.
                1. AnthonyMouse · · focus · HN ↗
                  You're still assuming that the insurance companies are the biggest problem, and on top of that that single-payer is the best way to improve even that part of the system.

                  For example, why do we have insurance companies "negotiating" with providers and having "in-network" nonsense instead of requiring universal price transparency? Instead of the insurance company setting the price, have them set how much they cover, e.g. they pay 90% of the second lowest price that service is available for within 100 miles of the patient. Then the patient chooses where to go and pays whatever the insurance doesn't cover. Meanwhile the providers are all required to publish transparent pricing so there is a public database of everyone who can perform a service and how much they charge.

                  Then a patient receiving non-emergency care (which is the large majority of medical expenses) can decide whether they want to travel 50 minutes to get the lowest price, or pay a little more of their own money because another provider is closer or provides optional amenities. Which in turn makes the providers actually compete with each other, which is the thing single-payer doesn't get you.

                  1. underlipton · · focus · HN ↗
                    >You're still assuming that the insurance companies are the biggest problem, and on top of that that single-payer is the best way to improve even that part of the system.

                    They are, and it is. And I'm not assuming; it's been proven empirically. Chasing "choice" is a distraction; the goal is access, which choice comes alongside.

            7. ChickeNES · · focus · HN ↗
              > you'll be waiting weeks/months to see a 'doctor'

              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,

        3. prophesi · · focus · HN ↗
          Not offering solutions here, because I think it's more multi-faceted than I know about. But when people are afraid to take on the debt of on-board EMS for a 911 call, and local pharmacies are forced out to be bought up by the top national pharmaceutical companies letting them rent-seek, I do think "for profit" is part of this multi-faceted problem.
        4. Wololooo · · focus · HN ↗
          For profit IS the problem, the fundamental issue is that there are some services that needs to be run at a loss because the profit is the service which is being provided, that is the whole point of public service and paying taxes in order to have those operated.

          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.

          1. bopou · · focus · HN ↗
            "because the profit is the service which is being provided" What does this mean? Are you saying healthcare has positive externalities and hence should be subsidised? I don't think this is true, since the positive externalities are dwarfed by the benefits the individual consumer gets.
      2. 999900000999 · · focus · HN ↗
        Reagan and other racists succeeded in turning government benefits into a synonym for POC stealing from White Americans.

        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.

        1. bopou · · focus · HN ↗
          This reads like it was written by a 2022 LLM trained on 2024 Reddit
          1. 999900000999 · · focus · HN ↗
            >Defense Contractor President Sentenced to 48 Months in Bribery Scheme

            <a href="https:&#x2F;&#x2F;legacy.sba.gov&#x2F;article&#x2F;2026&#x2F;01&#x2F;16&#x2F;defense-contractor-president-sentenced-48-months-bribery-scheme" rel="nofollow">https:&#x2F;&#x2F;legacy.sba.gov&#x2F;article&#x2F;2026&#x2F;01&#x2F;16&#x2F;defense-contractor...

            Taking kickbacks and awarding no bid contracts is bad.

            Not as bad as baking a cake!

            &gt;Michigan woman faces up to 10 years behind bars for allegedly using food assistance for baked goods sold online

            <a href="https:&#x2F;&#x2F;www.yahoo.com&#x2F;news&#x2F;articles&#x2F;michigan-woman-faces-10-years-172856107.html" rel="nofollow">https:&#x2F;&#x2F;www.yahoo.com&#x2F;news&#x2F;articles&#x2F;michigan-woman-faces-10-...

            To be fair maybe at sentencing they&#x27;ll just give her probation, but it&#x27;s still an absurd prosecution.

            At most this should of been a civil penalty. At best the local city council could of given her advice on how to apply for a small business loan.

    2. brightball · · focus · HN ↗
      That’s also a correlation of federal vs state policy. Federal leaves nowhere to run.
    3. SpicyLemonZest · · focus · HN ↗
      Is there such a pattern? I&#x27;m not aware of any data pointing towards one, and I know lots of businesses with no monopoly or regulatory moat that have been acquired by private equity firms. I think people just don&#x27;t care when PE buys businesses that don&#x27;t seem very important.
      1. AnthonyMouse · · focus · HN ↗
        If PE buys something that doesn&#x27;t have a moat then they can&#x27;t enshittify it because the customers would immediately switch to alternatives.

        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&#x27;re not making the product worse (and can&#x27;t because there is actual competition).

    4. [deleted] · · focus · HN ↗

      [deleted]

    5. dadrian · · focus · HN ↗
      That’s absolutely not true. Private equity regularly buys small businesses, D2C businesses, retail businesses, failing businesses, software businesses…
      1. misterderpie · · focus · HN ↗
        Genuine Q: Are they buying failing businesses because they see potential and want to get those on the right track, or are they buying them because their forecast tells them they can still make money, before shutting them down for eternity?
        1. what-the-grump · · focus · HN ↗
          It doesn’t matter to PE as long as they can make a profit.

          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.

    6. ip26 · · focus · HN ↗
      Regulation is usually what you accept in exchange for a monopoly. I would argue a granted monopoly without any regulation is evidence of regulatory capture.

      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&#x27;s the optimal regime) then I&#x27;d argue there&#x27;s a clear gap in regulation, as flagrant abuse of the consumer has not been prevented.

      1. Nifty3929 · · focus · HN ↗
        Not really. Monopolies are an invitation to competition: Your margin is my opportunity, as it were. They are therefore hard to maintain absent some kind of external force to support it: Regulations (regulatory capture), licensing, explicit grant from the government, intellectual property laws, or some kind of collusion or market manipulation (more leading to oligopolies rather than monopolies).

        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.

        1. dregitsky · · focus · HN ↗
          This is inaccurate - natural monopolies are a thing.

          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.

          1. throwaway13337 · · focus · HN ↗
            True. Though I don&#x27;t like the term &#x27;natural monopoly&#x27;. Most natural monopolies aren&#x27;t - or don&#x27;t have to be.

            Maybe a term like &#x27;natural markets&#x27; captures it better? The property being that natural markets&#x2F;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&#x27;m certainly glad that I&#x27;m not on AOL&#x27;s internet. And also glad that internet exists in part due to Bell&#x27;s telephone system being forced open.

            Bad regulations do not seem to have that characteristic. It&#x27;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.

          2. protocolture · · focus · HN ↗
            Most people, especially governments, aren&#x27;t positioned to analyse monopolies.

            &gt;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&#x27;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.

        2. djtango · · focus · HN ↗
          Am I the only that is happy that &quot;cheap unregulated doctors&quot; isn&#x27;t the solution to shaking up monopolistic health care?
        3. ip26 · · focus · HN ↗
          Take garbage hauling. You have five haulers running the exact same routes through town, stopping at different houses. Government is unhappy with the tremendous added wear on the roads from the redundant trucks, and the extra traffic, so it strikes a deal and grants exclusivity to one hauler.

          This is a granted monopoly. It has real positives, such as the same service at 5x less road wear. It should also be obvious that to be positive overall the deal needs to prevent abuse of the public.

          1. anamax · · focus · HN ↗
            Nope.

            If there are 5x as many truck runs, the trash per truck is 1&#x2F;5th.

            The more likely result is that each of the providers runs far fewer trucks than a single provider would because trucks and drivers cost money. Unless the 5 companies figure out how to get the total revenue to 5x, they can&#x27;t pay for that.

            Let&#x27;s do an example.

            Suppose we have a street with 100 houses and it takes 5 houses to fill a truck. Therefore, it will take 20 truck runs to collect that street&#x27;s trash.

            If there is only one trash company, it will need 20 truck runs to service that street.

            If there are five trash companies, each with an equal share of those 100 houses, each of those companies needs only 4 runs to service its 20 houses. Why would any of them do more runs?

            Yes, the average distance per run may be higher for the 5 companies, but it won&#x27;t be 5x.

            1. tanseydavid · · focus · HN ↗
              Now do Amazon deliveries. I&#x27;m only half-joking.
            2. datsci_est_2015 · · focus · HN ↗
              &gt; Yes, the average distance per run may be higher for the 5 companies, but it won&#x27;t be 5x.

              You contradict yourself at the end of the comment. Yes, it could be estimated a linear equation (mx + b) where m is the cost per house and b is the cost per route, roughly. And then you could have a system of which equations, where each row in the system’s matrix corresponds to an additional company.

              The optimal result is probably not 1 company, but it’s probably not 1 company per house either

          2. IAmBroom · · focus · HN ↗
            Some part of Ohio functions as a granted monopoly for the power company.

            They are given 5-year contracts, but an agency exists to tabulate complaints, reaction time to outages, and so on. If they don&#x27;t impress the agency near the end of their contract, it will be opened up for market bidding.

            Because of this pressure, the monopoly power company has even been known to reduce rates, proving a priori that they are indeed serving the public interest at a commendable level.

        4. ndsipa_pomu · · focus · HN ↗
          That doesn&#x27;t seem true to me.

          Monopolies are the result of failure of competition. There&#x27;s no &quot;invitation&quot; to compete, but a clear warning that a new entrant will have no chance.

          This is why profit seeking organisations aim to become a monopoly as then they are guaranteed profits and can abuse customers as they wish.

    7. duped · · focus · HN ↗
      &gt; They like companies with some kind of moat that makes it hard to unseat them.

      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.

      1. throwaway13337 · · focus · HN ↗
        These PE-owned companies create market demand by being shitty. Somehow they are able to keep their margins and their market so that their business model makes sense. That&#x27;s a puzzle, right?

        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&#x27;s not capital.

        1. what-the-grump · · focus · HN ↗
          It is capital? It’s going to the same PEs and private markets.

          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.

        2. duped · · focus · HN ↗
          PE doesn&#x27;t create anything. They extract from margins.

          It only works by having more capital to begin with.

          Otherwise you wouldn&#x27;t see consolidation where it shouldn&#x27;t exist.

          1. throwaway13337 · · focus · HN ↗
            I think I could have been clearer.

            The PE firm creates market demand for the goods&#x2F;services that the purchased company used to provide at a better value to the customer.

            So yes, the &#x27;creation&#x27; 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&#x2F;monopoly).

      2. AnthonyMouse · · focus · HN ↗
        &gt; But why should an owner of a practice sell to their junior staff when PE is there offering 2, 3, 5x as much?

        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&#x27;s juniors don&#x27;t have to outbid Wall St to acquire it.

        1. duped · · focus · HN ↗
          No, it&#x27;s money. Younger generations have less money. It&#x27;s not more complicated than that.
          1. AnthonyMouse · · focus · HN ↗
            I notice that you haven&#x27;t actually answered the question of what they&#x27;re supposed to be needing to buy.
    8. croon · · focus · HN ↗
      I&#x27;m unsure if I&#x27;m reading you correct. Are you saying that the disease is all &quot;monopoly and regulation&quot;, or just some of it? Healthcare, infrastructure, etc are natural monopolies, and the alternative isn&#x27;t much better. No one wants four parallell roads or multiple competing electrical grids, or side-by-side hospitals.

      We however don&#x27;t want unnatural monopolies that have enough capital to swat away any competition, nor do we want natural monopolies taken over by rent-seekers.

    9. Henchman21 · · focus · HN ↗
      The disease is Capitalism.
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