Thread

1. 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. mhh__ · 1789946857 · focus · HN ↗

      PE staff are more intelligent and more shrewd than the people running the businesses they buy. Being a good doctor doesn't make you a good businessman.

      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.

      1. cool_dude85 · 1789947081 · focus · HN ↗

         What does it mean in this context to be more intelligent and shrewd than the existing owners? Delivering better profit margins?

         1. SoftTalker · 1789947739 · focus · HN ↗

            I mean, losing money is not sustainable. If a doctor or physician group isn't business savvy and can't earn a profit they will eventually go under. That's not good for the patient.

            1. cool_dude85 · 1789947983 · focus · HN ↗

               OK, but making money, though it may be less than a PE company would, is. Where do most doctor's offices fall?

               1. csa · 1789953772 · focus · HN ↗

                  Most doctors make good money, but most who are good doctors could make much more.

                  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.

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