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Posted by paimapi 1 day ago

Bill to Ban Private Equity from Owning Medical Practices(truthout.org)
497 points | 369 commentspage 4
janalsncm 1 day ago|
> employers expect health care plan costs to rise by an average of 11 percent per worker in 2027, unless benefits are cut

I am sure most workers would prefer to get that extra 11% as a cash raise, but because healthcare costs are out of control the same care costs 11% more.

Certainly some companies will throw up their arms and hire someone overseas instead.

Avicebron 1 day ago|
Look up "Medical Loss Ratio" from the ACA if you want to find out where the perverse incentives for health care pricing comes from..
smallmancontrov 1 day ago||
The cap is generous. If an insurance company is hitting it, competition is failing to keep them in check and lifting the cap would just let them gouge deeper. Of course, that doesn't keep them from constantly yapping this talking point, as if it wasn't that way before, as if we don't have evidence that it wouldn't work. "Just lift our profit cap" is self-serving baloney.
Avicebron 1 day ago||
That's not the issue, it's because an insurer's absolute profit only grows if the premium base grows. This removes any reason to compete on reduced costs and an incentive to have the costs go up.
smallmancontrov 16 hours ago|||
If they aren't at the cap -- which is generous -- they can grow their profit by controlling costs. For once.

If they are at the cap, they wouldn't have passed on the benefits from controlling costs anyway because the cap is generous and reaching it proves that they have enormous pricing power.

There is simply no way that lifting the generous cap results in benefit to the consumer. It's a slimy self-serving talking point through and through.

rileymat2 1 day ago|||
Except you can grow the premium base by adding customers as well, as you are featured in a direct price comparison on the ACA website. Higher premiums mean less customers, unless you are offering more services that they find valuable.
frisco 1 day ago|
Medicine is extremely capex intensive and only become more so. Sucking private capital out of healthcare is going to make it vastly worse for everyone; higher prices and less innovation. I think we can criticize the often ruthlessness of PE while realizing that limiting medicine's ability to invest would be a huge self-own and only force further centralization into the biggest non-profit centers.

Medicine is already held back enough by the lack of ability to use debt to finance its sales, unlike almost every other industry; you can repossess a car but you can't repo an implant or administered drug, forcing everything to be paid for in cash upfront. Medicine needs as much access to capital as it can get.

drknownuffin 1 day ago||
I have no words for how completely toxic the surge of PE in healthcare has been. It's driven the degradation of care everywhere I've been. Healthcare chains have no issues with investment (see any annual reporting document to see how much money is sitting in various investments, mostly RE); smaller clinics being eaten up by PE chains is not an answer to centralization, it's just another mechanism of it.
frisco 1 day ago||
"Private equity" also includes venture capital here. It means all private direct investment. The thing you are imagining is one small corner of what private equity actually is.
BugsJustFindMe 1 day ago|||
> Sucking private capital out of healthcare is going to make it vastly worse for everyone; higher prices and less innovation.

Injecting PE into healthcare is what made it vastly worse for everyone in the first place. You can't have it both ways.

frisco 1 day ago||
I'm sorry, compared to what? We're not talking about a routine doctor's office for healthy people. Advanced care is extremely technologically intensive and your local surgeon is not personally buying the $20M in infrastructure required for many modern advanced treatments. Venture capital has been essential for progress in medicine, and many advanced therapies are going to be increasingly delivered vertically integrated for the widest accessibility and best outcomes.
bonsai_spool 1 day ago||
> Venture capital has been essential for progress in medicine

VC's can still fund companies that are making expensive new products.

Banks (and PE...) can still underwrite loans for these things.

We have many solutions for capex-intensive businesses and have had these for over four hundred years. LBO-type PE is not even fifty years old yet

frisco 1 day ago||
agreed but that is not what they are talking about banning -- "PE" is expansive and includes all those other things. If they narrowed this proposal to just what people are thinking of as "PE" here rolling up clinics and gaining local pricing power that would be different and I'd agree with you
bonsai_spool 1 day ago||
> agreed but that is not what they are talking about banning

I think you misunderstand me. I think what is proposed to be banned (employers of doctors who are PE firms) should not exist. It is strictly not necessary, and there's an excellent example of the consequences playing out across Massachusetts right now (which explains the bill's introduction by Warren)..

I'm not sure how we decided only lawyers can run law firms but that anybody can operate a hospital...

BLKNSLVR 1 day ago|||
It feels to me as if the US is a useful example for the outcomes of a focus on capitalist ideals does for medical services in a country.

Apologies if an AI summary is offensive to some, but here we go:

> The US is a world leader in advanced and specialist medicine, but its overall system for providing affordable, accessible, equitable medical care to its citizens ranks poorly—last among the 10 comparable high-income countries in the strongest recent comparison.

Both sources are the same site:

https://www.commonwealthfund.org/sites/default/files/2024-09...

https://www.commonwealthfund.org/publications/fund-reports/2...

vjvjvjvjghv 1 day ago||
" less innovation"

"Innovation" as in marketing expenses and stock buybacks?