Thread

Bill to Ban Private Equity from Owning Medical Practices

509 points · 384 comments · paimapi

rrrrrrrrrrrryan · 1789953795 · 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 · 1789956107 · 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 · 1789958697 · 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.
    bitmasher9 · 1789960983 · 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.”
    randerson · 1789963614 · focus · HN ↗
    Indeed. But remember a PE firm has economies of scale because they own many vet practices. They can negotiate better rates with suppliers than you can, and better payment terms. Maybe they even own some of those suppliers. They can divide their advertising costs by all the practices they own, whereas you can't.
    Even if you were willing to be as ruthless as a PE firm, raising your prices and sacking half your staff, and even if you were somehow an expert in financial engineering and business optimization, you still won't make the business as profitable as they can.

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