I go out of my (sometimes significantly) to go to non-PE owned companies and services, and the experience is so much better it's like experiencing an entirely different quality of life. My 2¢ is that a decent chunk of the "dissolution of the social contract" in the US is due to the way that people are treated when they interact with these soulless entities.
I’d happily pay for a tool that lets me opt out of being slowly nickel-and-dimed by entities optimized for short-term yield. This feels like infrastructure: a small amount of collective effort that gives individuals leverage again. Visibility is the lever. And it could be done, it's just more organizing and involvement in local politics. The information already exists, it’s just effectively invisible, and a small translation layer could collapse it into a one-second answer, letting people avoid operators with a predictable extractive playbook, with the only real challenge being the constant, boring maintenance in an environment designed for churn and opacity. Eventually this should revolve around organizing and politics to make a difference.
Though less critical to our lives, PE has ruined loads of retail and restaurant options as well - Sears, Toy ‘R’ Us, Red Lobster, and Shari’s come to mind.
Storage unit rental went from $90 in 2014 to $110 about 2017, but then was acquired by CubeSmart which is publicly traded: now $241 per month. I know the local taxes and they have stayed about the same all those years.
Coutry wide only 16% of dental practices are DSO, and it's not that functionally different from junior dentists getting loans to set up their practices with practices themselves as a collateral.
My daughter is “on the spectrum” and dealing with these therapy places was just a huge waste of time and money. I don’t know if the places we went to were owned by private equity or what but the quality was really bad and this is in a major metropolitan area that is also affluent. The therapist seemed like good hearted people, but they were paid so miserably that there was constant turnover. The billing practices were always shady and complicated and frustrating. Not to mention most of these places have 6 to 12 months waiting list to see anybody in the first place.
It’s part and parcel to the mental healthcare system for the last decade or so. There is no place that does better because every single provider is dependent on private health insurance which rarely pays without major and intense hassle.
If everyone wasn’t held basically at economic gunpoint to a level where they are one or two missed paychecks to living in their car, we could advocate for patients and providers to strike outside of the managers offices or in front of a news station. It’s insane how having no financial security creates a world where they can extract with abandon.
If we’re going to stick with private ownership of our healthcare infrastructure, patient-facing providers should at least be required to be B Corps, with one Board seat set to represent the doctors’ and nurses’ interests and a second patients’ interests. (Not sure how you’d elect the latter.)
There should also be strict leverage, related-party transaction and dividend limits. In exchange, we might provide a public lender of last resort for healthcare providers who need a lifeline.
Banning private equity from healthcare is a good headline. And if I were a candidate, I’d probably run on it. But it’s a band-aid to a broader incentive problem.
I have hope that the newer generations don’t align with “big bad guvmit”, and there’s been enough negative experiences (direct and indirect) with healthcare that people will vote for alternatives.
Also, I am saddened by the shared anxiety of healthcare in US (availability while jobless, f*** by big bills, lack of care, etc). The raw amount of shared mental stress must contribute to lower lifespans :(
I think that's going to depend on the operation. Also where I said "private" I should have included "small group" as well.
Fair point about emergency medicine. I meant healthcare (and also veterinary, dental, etc) in general. But I suppose there are some exceptions where the model doesn't fit so well.
I really dislike this, especially because it ultimately results in worse care for the kids.
I think the place I take my kid to for therapy is likely private equity owned, but it's also about the only place available in my area.
I know they are charging around $80 per season, and I also know that the salaries for their therapists are around $25 to $30 per hour.
That leaves a very healthy margin for everything from employee benefits to building rental to admin (which I think is probably where the majority of margin goes).
I think you're over-estimating how much slack there is in the organization.
A rule of thumb is that benefits cost an employer 25-30% of salary. So you're already pushing to 50% of revenue going to direct salary costs. Then there are employees in non-revenue roles (HR, legal, accounting, IT, etc...) and employees doing non-revenue work.
Finally, you have rent, licensing, insurance, and all the other fixed costs.
An awful lot of businesses go under from underestimating what their expenses inevitably will be. Everyone they deal with has their hand out to get paid.
It's worth asking if you're curious or have a good relationship with the provider. Some may be willing to tell all about their ownership or management situation if prompted politely.
I know of a childcare center that was acquired recently. Not sure if by PE or just another business, but the employees are less than thrilled with the changes.
These should be useful signals to regulators. Regulation is imperfect but somehow we blame companies that take advantage, either of immature or nonexistent regulation (which might be the case here) or of poorly written regulation (e.g. circa 2000 California energy regulation that let Enron and company run wild).
These companies, in finding essentially arbitrage opportunities, are, perversely, helping strengthen regulation, but only if regulators pay attention to what is going on and do something about it, instead of just watching it happen.
This won't be at a 5yo level, but here's an attempt: there are a two things specific to private equity that often leads to higher prices and worsening service:
1. PE aren't investors like you and me. We can go to our brokerage and buy shares of a public company, hold those shares, vote on directors and proposals, etc... Or we can buy and sell ETF/mutual fund shares that own companies. Then, we (or fund managers) can sell those shares after any period of time we want. Could be years, decades, or minutes. Whatever meets our investing goals. The same is actually true for hedge funds. We buy a a piece of a company, hold it as long as we want, then sell to take profit/loss. When PE buys a company though, they buy the whole company AND they have a specific timeline in mind. This is because PE firms are actually temporary private "investment funds": partners put in money and expect a certain return on investment after a certain period of time. At the end, that's when the fund needs to wind down and return capital + returns. So, there's already a ticking clock on anything a PE firm buys, and pressure to generate return before time runs out. They typically do this by taking a company public on the stock market (maybe again) or selling it to someone else. (This doesn't always succeed, but there are other options then, like continuation funds.)
2. PE funds also take on a lot of debt. They can't afford to buy whole companies or roll up entire industries just with their investors' funds, so they borrow a lot. Now, the companies they buy for their portfolios not only need to generate returns for their investors, they also need to do that AFTER making payments on that debt. It multiplies the pressure.
There are a lot of cases where PE bought struggling companies, and with discipline and incentives turned things around on a timeline. But there are also a lot of cases where PE bought stable but boring companies, used debt and pressure to force them to raise prices, cut services, lay off workers, and lower quality in order to generate returns at the pace required.
(Most of this I learned from reading Matt Levine columns, I'm not an expert and don't work in this industry at all, so I may have some details wrong.)
An individual likely (hopefully) has a moral compass.
A family introduces some perverse financial incentives but you also get long term (ie multi generation) planning and reputation concerns.
A group of practicing professionals who own the operation will hopefully exhibit some shared pride and professionalism.
A co-op or similar arrangement ties the interests directly to the local community.
The larger the public company the less overlap there will be with the customer's interests. At least they might worry about reputation and stock price though.
Pretty much the only concern PE has is avoiding litigation. Their primary motivation is maximizing value extraction over the short or medium term.
Worse than PE? I very much doubt that but I guess the answer will depend on the voters, how the healthcare ventures themselves are structured, how much open corruption the local culture tolerates, and similar.
However AFAIK most government solutions in the west involve public "insurance" as opposed to the direct operation of health care facilities themselves.
Just a driveby speculator but my guess is PE dillutes interest in and responsibility for the businesses.
Individuals or family holdings are more likely to have concern for their reputations in addition to finances, public companies are more likely to scrutinized offsetting what would be their much lower reputational concerns. But PE is diffuse and often distant enough to eliminate human reputational concerns while being held to far lower stadards than public companies.
We already know that Private Equity kills people in the hospitals [1] and nursing homes [2] for profit. So why do we continue to allow them to operate Healthcare facilities?
Wait so are you doing the journalistic action? I can't wait for this to drop. Please give me more details if possible.
Massive respects to your journalism, I have a lot of questions regarding this tho, namely how long did it take you to build this expose and where are you gonna drop it because I searched net for Founderstowne but I didn't find anything special, are they the VC fund you are gonna expose?
After my first startup failed (didn't get PM fit) I got a bit obsessed with how to do good market research for innovation. Discovery interviews, JTBD, etc.
During my journey I took a beat and pointed my new skills at VCs. I interviewed a few dozen VCs trying to understand what they were trying to get done and what mattered to them, but with a bit of a bias trying to gauge whether they wanted to better predict market demand of their portfolio or prospective investments' products.
What I learned shocked me a bit. The sense I got was that they didn't really care about market demand or building a strong business, they mostly cared if the founder could sell the company up to food chain (series a, b, c etc).
Roughly speaking: "I don't care what value my portfolio companies create, I care about marking up my book so I can increase my take".
I don't know how much this had to do with ZIRP, but it really soured me to the VC industry. I've been committed to bootstrapping my companies ever since.
It's been submitted and will remain empty of comments until a HN user comments.
I see a post with 13 points (upvotes / positive reactions) and [flagged] (meaning the title alone upset a few people given there's been no time to read the content yet).
As with all HN submissions, YMMV - Your Mileage May Vary
Just a heads up. Oftentimes legally speaking a facade will only work if you haven't yet been found at fault.
And even if you know for a fact that you aren't at fault, an ounce of prevention is worth a pound of cure and all that. The legal process isn't exactly cheap.
Because we have governments anemic to running anything or regulating any business.
They are much more likely to continue shoveling cash into private businesses through subsidies then to want to setup and/or run the same business for a fraction of the cost.
> The same one who just said PE isn't allowed to buy any more residential real estate?
We'll see. That was just an EO. That doesn't really have the force of law behind it. There's not a regulatory body (AFAIK) that would or could prevent PE from gobbling up a home.
But if there's a route to stop it then I'm not opposed to it. PE buying essential goods and industries is bad for everyone.
The President's statements, and even unspoken thoughts, have the full force of law. This President, anyway-- I think the Supreme Court has a special criterion they use to determine whether Unitary Executive Theory should apply to a particular administration.
Government is probably the worst actor to run healthcare facilities. It’s not that different from PE, except with more administrative bloat. I’d be curious to compare US PE run facilities with government run facilities in Canada.
There is not an easy answer here, it basically a cost centre that whoever runs it, the welfare state is incentivized to spend as little as possible on it. PE is almost certainly a bad solution. If they can destroy a restaurant or other low impact business, I hate to think what they’d do to businesses that care for people. You’d get the healthcare equivalent of Burger King. But with government you get the equivalent of the DMV.
Canada's healthcare is generally cheaper per capita, pays healthcare workers less and has far lower administrative costs than the US. The US spends 5x the average of other wealthy countries on administrative costs [1]. This line that the government is automatically inefficient and terrible at anything at all is not true, is not set in stone and does not preclude private industry being even more greedy, stupid, amoral and inefficient than the government.
> The US spends 5x the average of other wealthy countries on administrative costs [1]. This line that the government is automatically inefficient and terrible at anything at all is not true
It's a line that tends to be mainly parroted by... the US. Quelle fucking surprise.
Free market ideologues are too dumb to understand local minima.
An ideal free market is a global minima (in theory). It's the best.
A non-ideal free market (heavily subsidised and regulated) might be close (in parameter space) to a global minima, but might be highly suboptimal compared to a local minima.
It's not even that. Free markets by themselves (as implemented thus far) DO NOT ACCOUNT FOR EXTERNALITIES.
I have yet to see reasonable fix to the tragedy of the commons in a free market situation, and that's one of the most basic things one is fucking introduced to when studying economics and game theory.
Anybody who thinks health care is best served solely privately should have to pay to be diagnosed for something; either that or they've been failed in their privately funded education.
In the past I have read some libertarian literature that suggested the answer to the tragedy of the commons was that there should be no commons. Everything should be privately owned. How that would actually work in practice is way beyond my tiny brain.
Huh the government is the ideal party to do that. Because it can set its goals to best serve its constituents instead of making money.
Don't forget there are so many countries with government healthcare and their care is a lot more accessible than the US's. I've lived in many countries and a nationalised healthcare system is one of the things I select for.
Even a poor country like Cuba has one of the highest numbers of doctors per capita. Unfortunately a bit hamstrung by the US's illegal and needless sanctions so they can't get proper equipment but I've been told healthcare is still pretty excellent there.
it’s that first paragraph which is really the bugaboo. In an ideal world that first paragraph is 100% true. In reality, what you get is the government getting its own people on the inside, raking in tons of contract money and doing very little for that, then squeeze the services on the inside to win political points from their constituents by drumming up hatred for the system in which they work. While they take in "campaign contributions" from private entities who benefit from people falling out of the system or being fed up with it.
so I agree with you in theory, but in practice, there was a whole host of other issues that would need to be dealt with somehow. I don’t know that more bureaucracy is the solution, but I would like to think it can be handled.
Actual competition and monopoly breaking/preventing.
"Free" markets tend to have transparent pricing : US healthcare does not.
"Free" markets tend to have large numbers of independent players that compete with each other : This is disappearing in the US market.
We have the worst of both systems currently. It's not ran by the government to control costs to the end user. And it's ran by a few monopolistic insurance/medical companies to reap as much profit as possible.
Canadian healthcare is horrible, pretty sure public healthcare in the UK is also very bad. It’s not a given that somehow switching to public healthcare will make the US like Finland, Canada is much more likely.
It's all about the execution - UK NHS public healthcare was once easily the envy of the world (I'm from Australia, not the UK) and then it suffered decades of being white anted by Conservatives.
Yes, when the government politicians hate public healthcare they can successfully sabotage it. That just means we need to structure it in a way that they can't. The examples given were all successful in their missions in the past before they were actively targeted.
Government is probably the worst actor to run healthcare facilities
Are those your gut feelings, or do you have an argument to back it up?
In reality, the outcomes from Government operated hospitals in Scandinavian Countries do not need to hide behind those of other countries, especially not with the US
Oh, trust me, I would absolutely love for a lot more of the US to be socialized (certainly healthcare, housing, and transportation.)
Unfortunately that is virtually impossible in the current political climate, so I didn't include it.
What I was trying to say is that, as it stands, PE is the end of an entity's life. Once it's been strip-mined for all value, of course nobody wants it.
> that is virtually impossible in the current political climate
We probably need a Constitutional amendment codifying independent agencies before it can happen. We don’t need the President denying protesters medical treatment because he needs to distract from his pediphilia.
The government-owned things still suck too, they just give sweetheart contracts to whoever greases the right palms even though they suck. The money still flows to bad people, no matter what. Having it be tax money in the first place just increases the possible money available to be stolen, since government budgets can in practice only go up, plus the feds can print money.
> only possible entities who could buy a company are either a bigger company, or private equity
Communities. Forcing PE to divest from healthcare would require setting up a lending facility communities can borrow from to buy back their healthcare infrastructure. (Or have the government just buy it outright.)
I guess you could make it work as a window-dressing bill. Force PE to divest. Leave unsaid that you’re letting billionaires and family offices buy it up to continue the same shit. But actually solving the problem means ponying up cash to buy this stuff back. Even if it’s out of bankruptcy. (I’m not even touching the politics of paying PE and its lenders with public money.)
If you change rules to make the PE business model unprofitable, since it's in many ways toxic to society, you can result in them then needing to sell, for much less than they'd like most likely, or adapt and become less toxic.
> you can result in them then needing to sell, for much less than they'd like most likely
I’m imagining harder. Forced divestiture. Good amount of the hospitals and nursing homes would be bought of out bankruptcy.
But they still need to be bought and funded. And I think nobody wants to have a conversation about how much that costs and who winds up paying for it, particularly with many of PE’s hospitals being in rural America.
> we should have kept taxing the rich the we did during WW2 and the few decades following it?
Genuine question: source for any of the rich having paid more in the 50s than they did in the 90s? My understanding is that while published rates were high, effective rates were roughly flat until the Bush and Trump tax cuts.
The average effective tax rate stayed flat from 1945-2015, but the effective tax rate for the 0.1% and 1% fell during that time period. Bottoming out around the Bush years (although the graph only goes to 2015 so another source is needed to see how the Trump tax breaks have played out). The top for the 0.1% was almost 50% and the bottom was almost 20%. Now those almosts are working in the opposite directions so you should look at the graphs.
Now the 1% is paying more of the overall taxes, about 40%, but that number is also skewed (and can be misleading) by the absolute massive disparity between what the top and bottom make now. Plus of course reporting and tax compliance has changed a bit, plus a whole host of other confounding factors that this 40% statistic subsumes, but it's worth mentioning because it's always brought up in these discussions.
> The point is that PE should never have purchased these things in the first place
You can change the present. Not the past. Private equity owns these things. If you want them to not own it, you have to buy it back. Even if out of bankruptcy. Even if via eminent domain. Then you have to run it. All of that costs money.
You're missing the point. It's too late to unwind those transactions.
In theory state or federal governments could seize ownership of those healthcare provider organizations. But then legally the government would be forced to compensate the current owners at fair market value.
Because between the 1970s and 1990s, Western nations decided that private operations should be the default for everything except where the law specifically requires state institutions, instead of the other way round.
In many countries, essential services like hospitals, drinking water supply, airport security, schools, even prisons are now partially or fully privatized. It seems insane when you think about it, but that’s what your grandparents voted for.
How would this work the other way around? The state provides cheeseburgers and fidget spinners until someone writes a law requiring private industry to provide these things? Isn't there a sort of lack of freedom inherent in forcing people to get all their cheeseburgers from a single place?
The other way around would be having public options except where explicitly forbidden. The existence of a public option does not forbid private options. For example the existence of the USPS does not forbid UPS or Fedex or Amazon from operating delivery services, which may be preferable for many customers. But the public option guarantees that a certain level of service is available to anyone and makes it impossible for any private entity to secure a monopoly. It also is very sensible in cases of natural monopoly (power plants, international airports, prisons, wastewater treatment centers) where there's never going to be any meaningful competition that the government should own and operate the monopoly.
Ukraine an interesting moment with the recent (as in less than 10 years ago) health reform. The change was not in the ownership regime, but in funding (preallicated fixed amount vs post payment for itemised coded services).
Once the incetives got changed, a lot of doctors opened up their own practices as PE. The government still foots the bill, but the corrupt middleman of the local variety got cut from the flow
What is the appropriate level of safety? Safety is a spectrum, not a binary condition. Privately owned commercial airlines operating under strict government regulation seem to be pretty safe.
Private is the default solution for all problems. The state only provides a service when the government takes action to do so, and usually this is on top of whatever existing private infrastructure there is.
This seems like a pretty weird perspective to have?
A mix of public and private can work with proper regulation (especially when combined with state owned private companies).
This article only refers to the US. This is the second time I've brought it up over the last week, but it'd be nice if the US and "the west" weren't constantly conflated.
Not all of us have fucked over their citizens and spiraled into borderline dictatorships that are well on their way to becoming international pariahs as much as the US have.
Everything suddenly makes a lot more sense once you realize the US is a developing country, one that happens to control the global money printer (due to a few accidents of history).
It's the only developing country that is also "first-world" or "western", and unfortunately, also the most powerful of those.
> It seems insane when you think about it, but that’s what your grandparents voted for.
Our grandparents wanted a nice hospital and that's what they voted for. The people they elected needed funds to build the hospital, so they sought funding. The IMF and World Bank said "sure, we'll help you fund it. But in order to do so, you need to privatize your healthcare industry."
Our grandparents got a nice hospital for a while, the politicians got another 4 years in power, and a few years later we noticed that our free healthcare was gone.
This, multiplied across the entire developing world.
If anyone wants to see how private equity has transformed the veterinary industry check out www.privateequityvet.org/vet-list - over 7000 practices mapped across the US so far. Our dog died at the hands of a recently acquired PE practice :(
>“Private investors making a little bit of money while expanding access is not a bad thing, per se,” Singh said. “But we need to understand how much of a bad thing this is and how much of a good thing this is. This is a first step in that direction.”
Who gets to say what "a little bit of money" is here?
You are implying people should shut up about it because it's not novel information. I think "are you surprised?" is a very lame and unoriginal response I see everywhere and doesn't even care to engage with the problem. I think HN's rules suggest you should put in more effort than this.
ah yes, another market where the private equity scum have realised that "the market is inefficient" and that the existing businesses aren't "extracting maximum consumer surplus"
fortunately the UK doesn't have this problem for people as the state run healthcare system has set the price floor at zero
it hasn't stopped the private equity scum completely though, instead they have bought up most of the country's formerly independent vets
> From only 10% in 2013, almost 60% of veterinary practices are now owned by large companies
they then immediately "optimise the demand curve", doubling/tripling their prices, meaning there are now people that can no longer afford to treat their pets
Reading the headline all I can think about is that many people with autism are not capable of communicating, or if they are, only in a limited way. Literally people who do not have a voice to speak for themselves.
Come to think of it, I don't think I've ever experienced a product or service that took a turn for the better, after the company was acquired by PE.
There might have been a time where PE bought up mismanaged companies, and turned them around - but the PE acquisition spree we've seen for the past 10 years or so...it seems exclusively to cause enshitification. And it is happening everywhere. There will always exist some niche PE firms for every sector out there, nothing is safe.
> The primary concern is that private equity firms may prioritize financial gains over families, said Daniel Arnold, a senior research scientist at the School of Public Health.
...may? How are they not already by gobbling them up in a calculated way. Targeting states with lax insurance claim scrutiny
If corporations are people than PE firms should be executed like the leaches on society they are. Nothing makes me see red like the fact that basic services are increasingly being captured by these disgusting rats so they can squeeze every last cent out of society possible.
Even with the losses a lot more is provided per dollar because its done at-cost, and the majority still going to the most desperate.
If we wanted to worry about the bigges source of theft though it is wage theft by a large margin over all other forms of threat combined. And the healthcare industry is ripe with labor abuses.
Or do you mean like Republican Senator from Florida Rick Scott who was elected AFTER he was involve in $1.7 billion dollars in Medicaid fraud (largest in history) and whom the Republican party embraces and endorses and has in a position of power today?
https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386....
What did you think was going to happen when you've got guaranteed payments and a growing customer base as people celebrate their "neurodiversity" whilst at the same time demanding subsidies and yelling "ableist" at anyone who criticises them or the system?
So politicians pretend to care by throwing more money at their cronies and get away with it because won't someone PLEASE think of the children. And then people pat them on back and vote for them in the next election, and blame "capitalism" while the people they've just voted back in make millions.
They even say "We're also dealing with children who are largely insured by Medicaid programs" and yet still people are failing to join the dots...
Private equity goes where the money is. Nothing is magically non-exploitative just because it's done by a bunch of small businessmen instead of a private equity company. There's a reason why Private Equity bought so many dialysis clinics. There's a reason why they're doing this.
It's easy to scam the government out of money for this because a bunch of well-meaning "useful idiots" will say "pay whatever it takes; give them as much money as they need; it's for human lives!" and none of that is true. It's all about using different battalions to rent-seek on normal tax-paying Americans.
Tim Walz lost his hope for re-election over this but he's not the only one. In time we will discover a large array of healthcare scams and home-care and autism/child mental health are going to be near the top.
If your dialysis clinics have the worst outcomes in the industrialised world, it should make you go hmmm.
And usually it's not a problem, of "Throwing more money at it", but lack of regulations and enforcing them.
That said, Physician Owned Clinics have better outcomes, there is no reason why that shouldn't be the standard model of operating them. Usually they have more moral scruples about worsening care for profit.
Also there is naturally more competition, if there are multiple small operators instead of only Fresenius Nephrocare or DaVita
The dialysis clinics are bad and make all the money because it’s Medicare fraud dude. Well meaning morons say “whatever people need we should pay for them” not thinking for a second that some unscrupulous fuck is the one getting the money.
Yes, as soon as I hit the "...children who are largely insured by Medicaid programs..." part of the article, I figured that this is happening because some PE firms ran the numbers and discovered they could use autistic kids to squeeze as much money from medicaid as possible.
We have something like this going on in Australia right now.
The NDIS is our disability welfare scheme, and it's costs have exploded as oversight has failed to keep pace with exploitative actors. Few questions asked welfare for our vulnerable would be nice, but sadly it doesn't look sustainable in most places.
Private equity in healthcare shows particularly clearly how far capitalism is willing to go. Profiting from the suffering of humans and animals, while probably still feeling good and even heroic about it, disgusts me.
I can see your perspective, but healthcare isn't always a zero sum game. It can be empathetic and useful while also being profitable. It often isn't, but it can be.
There is plenty of evidence that Hospitals, Nursing Homes operated by private equity have way more worse outcomes than those of other operators, even for-profit ones
Yes. It starts benign "no major changes!" and soon stock is reduced, staff get cut, and cost cutting rules are enacted by people who never have to witness the effects on the patients who slip into worse outcomes. And if it crashes into the ground they can float away on golden parachutes.
Why can't we just leave some things out of the whole madness?
It's not like we don't have enough stuff that can be made profitable already.
Just let your customers be healthy, have a roof over their head, water, electricity, internet. They'll have more time and money to spend on all the other profitable stuff.
I know this is the conventional view. But is it possible that the prevalence of autism has been somewhat exaggerated and overdiagnosed? There's a CLEAR profit motive here...
Yes, but also we've gotten better at diagnosis. Both things are likely true to varying degrees.
That said, Elon is one of the most obviously autistic people I've ever seen. He's not a great example of overdiagnosis. In fact, if autism hadn't already been discovered they'd have taken one look at him and invented Elontism.
No it's not over exaggerated at all. Autism is highly prevalent and everywhere. The industry made a mistake, it originally assumed autism was a rare condition, but now we're starting to see that it's a personality trait because it's so common. We're coming to similar realizations for other things like the concept of gender as well as society modernizes and gets rid of out-dated thinking practices.
Autism is not a personality trait. Many people are severely disabled by it and are essentially non-functional.
Only about 15-20% have full time jobs. The suicide rate is incredibly, almost unbelievably, high. I think it was something like 80% have attempted suicide.
Personally I think we need more subtypes again. Its weird to lump high functioning aspergers folks like the richest man in the world into the same category as those who have to wear helmets and be physically prevented from harming themselves.
No they weren't. Autism is as a result of endocrine disruptions through environmental contamination along with a significant amount of heredity transmission. Same reason why T rates, sperm rates, fertility, are cratering.
Im adding a second comment for the frogs thing, since its really a separate issue.
I'm very liberal and never made fun of the researcher who identified that atrazine makes frogs gay. It does objectively mess with amphibian development.
I did, and still do, mock Alex Jones for insisting that it was government conspiracy "chemical warfare operation" designed to do... something. That makes exactly as much sense as his Sandy Hook nonsense or pizzagate.
I’ve even offered to pay for several years in advance at their “current” rate, and they won’t accept it.
I had a storage unit for a while until I realized that the monthly bill was more than the value of the contents.
A few months ago i got an email saying that PE had acquired it.
I was paying between ~$25/month before. Today i got the first bill from new management for $89.
Same volume/usage, nothing significantly different.
Sigh.
There should also be strict leverage, related-party transaction and dividend limits. In exchange, we might provide a public lender of last resort for healthcare providers who need a lifeline.
Banning private equity from healthcare is a good headline. And if I were a candidate, I’d probably run on it. But it’s a band-aid to a broader incentive problem.
Americans are deeply divided on the big bad guvmit
Also, I am saddened by the shared anxiety of healthcare in US (availability while jobless, f*** by big bills, lack of care, etc). The raw amount of shared mental stress must contribute to lower lifespans :(
Also poor people who having serious health problems dont have time to be politically active.
Administrative overhead. And some things resist it, e.g. ERs.
Fair point about emergency medicine. I meant healthcare (and also veterinary, dental, etc) in general. But I suppose there are some exceptions where the model doesn't fit so well.
But insurance companies are a-ok
I think the place I take my kid to for therapy is likely private equity owned, but it's also about the only place available in my area.
I know they are charging around $80 per season, and I also know that the salaries for their therapists are around $25 to $30 per hour.
That leaves a very healthy margin for everything from employee benefits to building rental to admin (which I think is probably where the majority of margin goes).
A rule of thumb is that benefits cost an employer 25-30% of salary. So you're already pushing to 50% of revenue going to direct salary costs. Then there are employees in non-revenue roles (HR, legal, accounting, IT, etc...) and employees doing non-revenue work.
Finally, you have rent, licensing, insurance, and all the other fixed costs.
I know of a childcare center that was acquired recently. Not sure if by PE or just another business, but the employees are less than thrilled with the changes.
These companies, in finding essentially arbitrage opportunities, are, perversely, helping strengthen regulation, but only if regulators pay attention to what is going on and do something about it, instead of just watching it happen.
Like those centers are going to be owned by someone one way or another - what is so special or bad about equity firms vs alternatives?
Genuine question. Because I don’t have a clue how this works in US.
1. PE aren't investors like you and me. We can go to our brokerage and buy shares of a public company, hold those shares, vote on directors and proposals, etc... Or we can buy and sell ETF/mutual fund shares that own companies. Then, we (or fund managers) can sell those shares after any period of time we want. Could be years, decades, or minutes. Whatever meets our investing goals. The same is actually true for hedge funds. We buy a a piece of a company, hold it as long as we want, then sell to take profit/loss. When PE buys a company though, they buy the whole company AND they have a specific timeline in mind. This is because PE firms are actually temporary private "investment funds": partners put in money and expect a certain return on investment after a certain period of time. At the end, that's when the fund needs to wind down and return capital + returns. So, there's already a ticking clock on anything a PE firm buys, and pressure to generate return before time runs out. They typically do this by taking a company public on the stock market (maybe again) or selling it to someone else. (This doesn't always succeed, but there are other options then, like continuation funds.)
2. PE funds also take on a lot of debt. They can't afford to buy whole companies or roll up entire industries just with their investors' funds, so they borrow a lot. Now, the companies they buy for their portfolios not only need to generate returns for their investors, they also need to do that AFTER making payments on that debt. It multiplies the pressure.
There are a lot of cases where PE bought struggling companies, and with discipline and incentives turned things around on a timeline. But there are also a lot of cases where PE bought stable but boring companies, used debt and pressure to force them to raise prices, cut services, lay off workers, and lower quality in order to generate returns at the pace required.
(Most of this I learned from reading Matt Levine columns, I'm not an expert and don't work in this industry at all, so I may have some details wrong.)
A family introduces some perverse financial incentives but you also get long term (ie multi generation) planning and reputation concerns.
A group of practicing professionals who own the operation will hopefully exhibit some shared pride and professionalism.
A co-op or similar arrangement ties the interests directly to the local community.
The larger the public company the less overlap there will be with the customer's interests. At least they might worry about reputation and stock price though.
Pretty much the only concern PE has is avoiding litigation. Their primary motivation is maximizing value extraction over the short or medium term.
However AFAIK most government solutions in the west involve public "insurance" as opposed to the direct operation of health care facilities themselves.
The government has to answer to the people. PE firms do not: they answer only to money.
Individuals or family holdings are more likely to have concern for their reputations in addition to finances, public companies are more likely to scrutinized offsetting what would be their much lower reputational concerns. But PE is diffuse and often distant enough to eliminate human reputational concerns while being held to far lower stadards than public companies.
[1] https://jamanetwork.com/journals/jama/fullarticle/2813379
[2] https://www.nber.org/papers/w28474
It's hard to argue against those who say private equity ruins everything. It's astonishing. And massively depressing.
You can download for free when you search the 'net for Founderstowne.
Pages in my book related to how private-equity screwed over the vet industry: 250. 442. 1001.
I think people will be blown away that the company that makes M&Ms owns a ton of vets.
Massive respects to your journalism, I have a lot of questions regarding this tho, namely how long did it take you to build this expose and where are you gonna drop it because I searched net for Founderstowne but I didn't find anything special, are they the VC fund you are gonna expose?
I expose just about everyone as a "roman a clef" (a work of "fiction":>).
I'm 58 years old. Entrepreneurial builder. Disgusted by VC/PE. Been writing this book since 1987.
During my journey I took a beat and pointed my new skills at VCs. I interviewed a few dozen VCs trying to understand what they were trying to get done and what mattered to them, but with a bit of a bias trying to gauge whether they wanted to better predict market demand of their portfolio or prospective investments' products.
What I learned shocked me a bit. The sense I got was that they didn't really care about market demand or building a strong business, they mostly cared if the founder could sell the company up to food chain (series a, b, c etc).
Roughly speaking: "I don't care what value my portfolio companies create, I care about marking up my book so I can increase my take".
I don't know how much this had to do with ZIRP, but it really soured me to the VC industry. I've been committed to bootstrapping my companies ever since.
I see a post with 13 points (upvotes / positive reactions) and [flagged] (meaning the title alone upset a few people given there's been no time to read the content yet).
As with all HN submissions, YMMV - Your Mileage May Vary
Also, the two links in your profile do not work
When I get sued (and I will), I'll employ "roman a clef" and slightly fictionalize the names.
By the way, VCs are not exactly any better than PE firms.
I've tried to reach out Marc Andreesen to see if he can 100% pivot to building instead of extracting. I'm encouraged by his latest fund.
And even if you know for a fact that you aren't at fault, an ounce of prevention is worth a pound of cure and all that. The legal process isn't exactly cheap.
They are much more likely to continue shoveling cash into private businesses through subsidies then to want to setup and/or run the same business for a fraction of the cost.
I hope they go after hospitals next.
We'll see. That was just an EO. That doesn't really have the force of law behind it. There's not a regulatory body (AFAIK) that would or could prevent PE from gobbling up a home.
But if there's a route to stop it then I'm not opposed to it. PE buying essential goods and industries is bad for everyone.
There is not an easy answer here, it basically a cost centre that whoever runs it, the welfare state is incentivized to spend as little as possible on it. PE is almost certainly a bad solution. If they can destroy a restaurant or other low impact business, I hate to think what they’d do to businesses that care for people. You’d get the healthcare equivalent of Burger King. But with government you get the equivalent of the DMV.
[1] https://www.pgpf.org/article/how-does-the-us-healthcare-syst...
It's a line that tends to be mainly parroted by... the US. Quelle fucking surprise.
You don't have to do that, we have US government ran facilities. It's the VA.
And if you look at the costs associated with the VA, they are much much cheaper than almost any private care [1].
And if you know a few vets, you know they almost universally love the VA. It's one of the best perks of serving in the military.
[1] https://www.herc.research.va.gov/include/page.asp?ID=inpatie...
An ideal free market is a global minima (in theory). It's the best.
A non-ideal free market (heavily subsidised and regulated) might be close (in parameter space) to a global minima, but might be highly suboptimal compared to a local minima.
I have yet to see reasonable fix to the tragedy of the commons in a free market situation, and that's one of the most basic things one is fucking introduced to when studying economics and game theory.
Anybody who thinks health care is best served solely privately should have to pay to be diagnosed for something; either that or they've been failed in their privately funded education.
…or Nash equilibriums.
Don't forget there are so many countries with government healthcare and their care is a lot more accessible than the US's. I've lived in many countries and a nationalised healthcare system is one of the things I select for.
Even a poor country like Cuba has one of the highest numbers of doctors per capita. Unfortunately a bit hamstrung by the US's illegal and needless sanctions so they can't get proper equipment but I've been told healthcare is still pretty excellent there.
so I agree with you in theory, but in practice, there was a whole host of other issues that would need to be dealt with somehow. I don’t know that more bureaucracy is the solution, but I would like to think it can be handled.
"Free" markets tend to have transparent pricing : US healthcare does not.
"Free" markets tend to have large numbers of independent players that compete with each other : This is disappearing in the US market.
We have the worst of both systems currently. It's not ran by the government to control costs to the end user. And it's ran by a few monopolistic insurance/medical companies to reap as much profit as possible.
On what planet does this not happen in America?
The challenge for citizens is active participation in oversight of management of the commons - rats will sneak into every granary otherwise.
Are those your gut feelings, or do you have an argument to back it up?
In reality, the outcomes from Government operated hospitals in Scandinavian Countries do not need to hide behind those of other countries, especially not with the US
https://jamanetwork.com/journals/jamainternalmedicine/fullar...
"The government is the best entity to run healthcare, except, when the voters elect people who's motto is fuck you, I've got mine"
Not "Government is probably the worst actor to run healthcare facilities"
but:
"Americans are probably the worst actors to run healthcare facilities"
I hope it's not true.
We don’t want to pay for them. When private equity is forced to sell, someone has to buy or the providers get shuttered.
On the other hand, we’re clearly willing to blow the money and deficit on stupid stuff. But only if it goes boom, apparently.
The only possible entities who could buy a company are either a bigger company, or private equity.
That the leavings of a PE business are unattractive to either of them is not a surprise.
That has nothing to do with what society at large (a better definition of "we") actually wants or needs.
The American mind virus at work.
My (non-US) state government literally purchased a private hospital late last year. Now it’s public.
Keep telling yourself that corporations are going to save you. Maybe it’ll happen eventually.
Unfortunately that is virtually impossible in the current political climate, so I didn't include it.
What I was trying to say is that, as it stands, PE is the end of an entity's life. Once it's been strip-mined for all value, of course nobody wants it.
We probably need a Constitutional amendment codifying independent agencies before it can happen. We don’t need the President denying protesters medical treatment because he needs to distract from his pediphilia.
https://www.cms.gov/medicare/regulations-guidance/physician-...
Voters, broadly and monolithically.
> only possible entities who could buy a company are either a bigger company, or private equity
Communities. Forcing PE to divest from healthcare would require setting up a lending facility communities can borrow from to buy back their healthcare infrastructure. (Or have the government just buy it outright.)
I guess you could make it work as a window-dressing bill. Force PE to divest. Leave unsaid that you’re letting billionaires and family offices buy it up to continue the same shit. But actually solving the problem means ponying up cash to buy this stuff back. Even if it’s out of bankruptcy. (I’m not even touching the politics of paying PE and its lenders with public money.)
I’m imagining harder. Forced divestiture. Good amount of the hospitals and nursing homes would be bought of out bankruptcy.
But they still need to be bought and funded. And I think nobody wants to have a conversation about how much that costs and who winds up paying for it, particularly with many of PE’s hospitals being in rural America.
Perhaps we should have kept taxing the rich the we did during WW2 and the few decades following it? No, clearly that would never work!
Genuine question: source for any of the rich having paid more in the 50s than they did in the 90s? My understanding is that while published rates were high, effective rates were roughly flat until the Bush and Trump tax cuts.
https://taxpolicycenter.org/taxvox/effective-income-tax-rate...
Now the 1% is paying more of the overall taxes, about 40%, but that number is also skewed (and can be misleading) by the absolute massive disparity between what the top and bottom make now. Plus of course reporting and tax compliance has changed a bit, plus a whole host of other confounding factors that this 40% statistic subsumes, but it's worth mentioning because it's always brought up in these discussions.
So the article has no source for the data? Only two years of data comes from the IRS, where does the rest come from? Why should we trust this?
We don’t want to pay for them. When private equity is forced to sell, someone has to buy or the providers get shuttered.
Sell? The point is that PE should never have purchased these things in the first place.
You can change the present. Not the past. Private equity owns these things. If you want them to not own it, you have to buy it back. Even if out of bankruptcy. Even if via eminent domain. Then you have to run it. All of that costs money.
In theory state or federal governments could seize ownership of those healthcare provider organizations. But then legally the government would be forced to compensate the current owners at fair market value.
In many countries, essential services like hospitals, drinking water supply, airport security, schools, even prisons are now partially or fully privatized. It seems insane when you think about it, but that’s what your grandparents voted for.
Government runs anything that regulation alone cant make safe.
Once the incetives got changed, a lot of doctors opened up their own practices as PE. The government still foots the bill, but the corrupt middleman of the local variety got cut from the flow
Could you expand on this?
This seems like a pretty weird perspective to have?
This article only refers to the US. This is the second time I've brought it up over the last week, but it'd be nice if the US and "the west" weren't constantly conflated.
Not all of us have fucked over their citizens and spiraled into borderline dictatorships that are well on their way to becoming international pariahs as much as the US have.
It's the only developing country that is also "first-world" or "western", and unfortunately, also the most powerful of those.
Our grandparents wanted a nice hospital and that's what they voted for. The people they elected needed funds to build the hospital, so they sought funding. The IMF and World Bank said "sure, we'll help you fund it. But in order to do so, you need to privatize your healthcare industry."
Our grandparents got a nice hospital for a while, the politicians got another 4 years in power, and a few years later we noticed that our free healthcare was gone.
This, multiplied across the entire developing world.
When you review the findings on the standard behavioral intervention, autism, on average requires 2.5 years of 40hr/week.
Thats basically one persons job.
Who gets to say what "a little bit of money" is here?
fortunately the UK doesn't have this problem for people as the state run healthcare system has set the price floor at zero
it hasn't stopped the private equity scum completely though, instead they have bought up most of the country's formerly independent vets
> From only 10% in 2013, almost 60% of veterinary practices are now owned by large companies
they then immediately "optimise the demand curve", doubling/tripling their prices, meaning there are now people that can no longer afford to treat their pets
Moderate and below that I think you can live a pretty free life. Its not like down-syndrome. Autism is surprisingly normalized.
There might have been a time where PE bought up mismanaged companies, and turned them around - but the PE acquisition spree we've seen for the past 10 years or so...it seems exclusively to cause enshitification. And it is happening everywhere. There will always exist some niche PE firms for every sector out there, nothing is safe.
...may? How are they not already by gobbling them up in a calculated way. Targeting states with lax insurance claim scrutiny
Social programs have been funded, show poor results, then seem like dead ends because of fraud.
Stealing money put aside to help the less fortunate is far more heinous imo.
If we wanted to worry about the bigges source of theft though it is wage theft by a large margin over all other forms of threat combined. And the healthcare industry is ripe with labor abuses.
They already got audited by DOGE, now we move on to PE
Or do you mean like Republican Senator from Florida Rick Scott who was elected AFTER he was involve in $1.7 billion dollars in Medicaid fraud (largest in history) and whom the Republican party embraces and endorses and has in a position of power today? https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386....
So politicians pretend to care by throwing more money at their cronies and get away with it because won't someone PLEASE think of the children. And then people pat them on back and vote for them in the next election, and blame "capitalism" while the people they've just voted back in make millions.
They even say "We're also dealing with children who are largely insured by Medicaid programs" and yet still people are failing to join the dots...
Where is this 'join' translated from ?
It's easy to scam the government out of money for this because a bunch of well-meaning "useful idiots" will say "pay whatever it takes; give them as much money as they need; it's for human lives!" and none of that is true. It's all about using different battalions to rent-seek on normal tax-paying Americans.
Tim Walz lost his hope for re-election over this but he's not the only one. In time we will discover a large array of healthcare scams and home-care and autism/child mental health are going to be near the top.
And usually it's not a problem, of "Throwing more money at it", but lack of regulations and enforcing them.
That said, Physician Owned Clinics have better outcomes, there is no reason why that shouldn't be the standard model of operating them. Usually they have more moral scruples about worsening care for profit.
Also there is naturally more competition, if there are multiple small operators instead of only Fresenius Nephrocare or DaVita
https://www.cbsnews.com/texas/news/death-rates-at-u-s-dialys...
The NDIS is our disability welfare scheme, and it's costs have exploded as oversight has failed to keep pace with exploitative actors. Few questions asked welfare for our vulnerable would be nice, but sadly it doesn't look sustainable in most places.
Why can't we just leave some things out of the whole madness?
It's not like we don't have enough stuff that can be made profitable already.
Just let your customers be healthy, have a roof over their head, water, electricity, internet. They'll have more time and money to spend on all the other profitable stuff.
It doesn't have to be EVERYTHING!
That said, Elon is one of the most obviously autistic people I've ever seen. He's not a great example of overdiagnosis. In fact, if autism hadn't already been discovered they'd have taken one look at him and invented Elontism.
Only about 15-20% have full time jobs. The suicide rate is incredibly, almost unbelievably, high. I think it was something like 80% have attempted suicide.
Personally I think we need more subtypes again. Its weird to lump high functioning aspergers folks like the richest man in the world into the same category as those who have to wear helmets and be physically prevented from harming themselves.
https://www.theguardian.com/society/2023/jul/31/autism-could...
I always knew much of my family, including me, had autism.
https://en.wikipedia.org/wiki/Empathising%E2%80%93systemisin...
Unironically trying to villify the "Atrazine is turning the frogs gay" guy is going to look really stupid to liberals very soon.
I'm very liberal and never made fun of the researcher who identified that atrazine makes frogs gay. It does objectively mess with amphibian development.
I did, and still do, mock Alex Jones for insisting that it was government conspiracy "chemical warfare operation" designed to do... something. That makes exactly as much sense as his Sandy Hook nonsense or pizzagate.
Maybe these private equity firms are trying to create incubators out of these autism centers for new startup ideas..