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Bill to Ban Private Equity from Owning Medical Practices

509 points · 384 comments · paimapi

  1. rrrrrrrrrrrryan · · focus · HN ↗
    It's actually worse with veterinary practices.

    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).

    1. limagnolia · · focus · HN ↗
      What is so costly about a veterinary practice that new veterinarians can't just start their own? Why would they need to buy one? There is certainly some benefit to working for some one for a while, and maybe eventually buying out an established practice... but if they want too much for it, just start your own?
      1. randerson · · focus · HN ↗
        If you start your own veterinary practice, and eventually build up a steady stream of happy customers, then sooner or later the PE firms will come knocking on your door, too.

        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.

        1. bitmasher9 · · focus · HN ↗
          No way. I think most people realize “they are offering me $5M because they know they’ll make a good profit on this business. That means it’s worth more.”
          1. DaedalusII · · focus · HN ↗
            it is worth more, but you have to do 100% of the work to get 25% more upside.

            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

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