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. Panzer04 · 1789947752 · focus · HN ↗

      Easy to imagine practices where the primary owner is going to retire and looking for an out.

      Maybe they find a buyer in a doctor, maybe they don't, but PE provides them an exit that keeps the practice operating in the community.

      Many people don't really run businesses efficiently. There was an interesting video I saw recently where a sole doctor practice made a few changes to their workflow that allowed them to hire more doctors and handle 2x as many people - I would expect a PE firm would pursue similar changes that help increase the number of people they can service, increasing competitiveness and lowering prices in the long run.

      I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.

      1. BrenBarn · 1789964551 · focus · HN ↗

         > Many people don't really run businesses efficiently.

         In many cases that's a good thing, depending on what we mean by efficient. Lots of people run businesses in ways that make less money than they could, and often that's good.

         > I don't know how these tradeoffs interact with patient care, but I wouldn't inherently expect PE to be worse at this than any other operating model.

         Doesn't the evidence suggest it is indeed often worse?

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