Bill to Ban Private Equity from Owning Medical Practices

jimbob45

Bi…cameral legislation?

NegativeK

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.

thrance

Nothing a few bills slipped to republican and "moderate" democratic senators won't fix!

djfobbz

They'll still manage to figure out some loophole to do it anyway. PE really is cancer to most industries.

janalsncm

> 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.

dd8601fn

How about just “cannot sell for 20 years”? The usual complaint is going full extractive mode, desperately squeezing profit and selling inside 3-7 years. So, yeah, we can keep private investment. But they're fucking stuck with it, trying to maintain a healthy business for 20 years.

elliotto

Australia is on its way down this path after Brookfield / Healthscope was holding a private hospital hostage against the government and had performance so degraded a child died. Hopefully we (aus) continue down this path of burning off the rot. https://www.abc.net.au/news/2025-03-27/nsw-government-joes-l...

mhh__

You know what american healthcare really needs is more regulation!

mentalgear

Most importantly to fight it as Private Equity is creeping like a cancer into good health systems globally, even in Europe, to slowly but surely siphon away all that is good. It's important to fight it now before it is too late and other places also fall apart into a degraded, predatory, dystopian US system !

JumpCrisscross

Make it a leverage limit. Otherwise you’ll have other players come in and replicate the playbook. The short-term fix is banning PE. The long-term one is restricting the leverage these groups can take. Then put limits on upstream leverage. We have these across our economy. We just don’t apply them to this sector.

frisco

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.

naveen99

I wonder if ai can help doctors reclaim their practices, as the bureaucracy of dealing with insurance may become easier. Administrative overhead must be cheaper with ai. It was the main reason for consolidation and giving up management to hospitals and private equity.

throwaway13337

There's a pattern to the kinds of companies PE buys and I think it points to the real problem. They like companies with some kind of moat that makes it hard to unseat them. Basically, companies where there is no alternative for the consumer. That way, they can inflict abuse but know there will be nowhere to run. There are two different ways to achieve this. Monopoly and regulation. Hospitals have both government granted locational monopoly and tons of regulations that make it impossible to compete. Private equity is the symptom, not the disease. Until we get at the disease, new monsters will be born with different name filling the same ecological niche. It's economic natural selection played out in the environment we created.

mmooss

If for-profit healthcare is allowed then it could be regulated like banking, with requirements to prevent failure (including requirements for financial health), and if there is failure, to ensure customers are protected and provide for continuity. Like banks, failure of a healthcare institution can be destructive for its customers and the community. If a bank goes under, especially a significant one for the community, regulators see that it's acquired by a surviving institution - often with only a weekend of downtime.

balderdash

I feel like medical practices should be like law firms where effectively non-lawyers can’t own equity and equity owners have to comply with ethics and code of conduct rules…

nargella

I did a small research project based on medical billing challenge data ( https://medgis.te0.io/ ). I tried to correlate the data to PE firms (best effort). As far as I could tell they were just a volume player but not the worst. After talking to people in the industry, theres some real sleezy doctors out there. Some do appointments at hospitals even if not required so they can charge more. There’s more anecdotes. All the incentives are messed up and I’m not sure how to fix without policy changes.

rrrrrrrrrrrryan

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).

s1artibartfast

How does it define PE?

burnt-resistor

PE buys up hospitals to gut them, make them less capable, and cheaper to run. Then, they buy up air ambulance services to unnecessarily fly patients to other hospitals they own because it's more profitable at the expense of care delays and worse outcomes. Meanwhile, patients and their families are stuck with exorbitant air ambulance bills $20k-60k.

stephen_cagle

My main problem with PE is that it is being invested in by things that I do not consider "investors" like retirement funds, teacher's pensions, annuities, etc. Many of these things have sort of implicit guarantees from the State or Federal government. These organizations should be completely banned from investing in PE. PE investments should only be invested in by "investors", and investors understand that their investment may go to zero.