5 ms·

I’m the furthest thing from having any knowledge here, but it feels like it should kind of be like how law firms can only have lawyers be owners with the idea t

I’m the furthest thing from having any knowledge here, but it feels like it should kind of be like how law firms can only have lawyers be owners with the idea that owners need to be aligned with codes of professional conduct/ethical obligations to clients etc

CamelCaseName 3y ago
This is true for the veterinary world, probably other professions too. The result is that a veterinarian owns the business on paper, but the PE fund can take over or replace them as needed.
- darth_avocado 3y ago
  The veterinarian world is doomed. Increasingly PE is taking over entire neighborhoods when it come to vet hospitals. This is led to increased wait times, lower standards of care, higher cost to consumers and higher pet mortality rates. That can very well translate to human healthcare.
  - rcme 3y ago
    But the barriers to starting a new vet are pretty low. If existing vets are inadequate, new ones can start.
    - darth_avocado 3y ago
      Capital is the barrier and the requirement is not low in the areas PE takes over.
      - rcme 3y ago
        It seems like a vet would be about as expensive as opening a restaurant, maybe 1-3x as much. That doesn't seem like the most capital intensive thing ever.
        RALaBarge 3y ago
        Other than the doctorate, of course.
        rcme 3y ago
        Presumably there is already a supply of licensed veterinarians, unless the PE vet practices are hiring unlicensed practitioners.
        anigbrowl 3y ago
        How many of them have easy access to a million bucks?
        rcme 3y ago
        Probably most of them. I don't think the limiting factor is access to capital, but rather the risk.
        darth_avocado 3y ago
        It is more expensive to open a clinic than a restaurant, with the costs being anywhere from $500k-$1M. The main difference between the two is that the vet clinic has higher running costs aka salaries in the early years before the practice takes off. For restaurants, it’s relatively lower (staff salaries and produce) if the demand is lower.
        rcme 3y ago
        500K-1M seems about 1-3x a typical restaurant. I'd also be surprised to learn that running a vet is more expensive than a restaurant. The margins are seem like they'd be way lower in a restaurant.
    - classichasclass 3y ago
      No. My late father started his own solo vet practice in 1983, in that less capital intensive environment, and he still required a substantial amount of seed capital to procure and retrofit the building to meet regulations and have enough in the tank to keep it going through the initial lean business years. (There were other complications related to the specific property and title liens not relevant here.) In these days it's not much different than a solo medical practice in terms of startup costs. Later VCA and Banfield asked him every year to sell out and he never did, but he was an already established practice by then. I can see why new vets are much less likely to embark on it.
      - rcme 3y ago
        Not sure what your point is. I'm not saying you can open a vet for free. All businesses require capital. But, as evidenced by your father, opening a new vet practice is not some totally new thing no one has ever done before. People have done it and people will continue to do it.
        pessimizer 3y ago
        > opening a new vet practice is not some totally new thing no one has ever done before. No one claimed no one had ever opened a vet practice. What they are claiming is that it is expensive. Nobody is accusing you of saying that someone can open a vet practice for free. What they are claiming is that it is expensive. > People have done it and people will continue to do it. Everyone knows this that independent vet practices have been opened in the past, and that some are likely to be opened in the future.
appplication 3y ago
As I understand it, there actually are laws for this for medical practices in most states (but I think not all?)
- thegaulofthem 3y ago
  Easy, hire a partner-figurehead as a rubber-stamp and you’re off to the races. I’ve seen similar in Federal contracting, hire a tick-the-box preference point partner with a make-work role to get contracts.
gruez 3y ago
That model works well for professional services (eg. lawyers, accountants, consultants) because require very little capital. Everything from the office they work in, to the computers they type on can be leased. The same can't be said for hospitals, which cost hundreds of millions to build and equip. How are you going to raise all that capital from only the doctors? They're rich, but not that rich. Moreover, the payback on said investment is on the order of decades. A doctor late in their career has the most to invest, but they're also nearing retirement. What are you going to do with their shares? Sell them to newly graduated doctors who are hundreds of thousands in debt? Let them keep them, at which point they turn into quasi-investors?
- ajhurliman 3y ago
  That’s not true. There was a doctor owned clinic in Seattle (The Polyclinic) with multiple locations across the city. A few years ago it was purchased by Optum (United Healthcare), and the standard of care has fallen through the floor.
  - magnawave 3y ago
    …and sadly the doctors have been fleeing too, all my doctors have left. Their replacements aren’t bad, but not to the same top notch level of care. The Polyclinic was honestly off the charts excellent, and now it’s just “fine”. In a few more years who knows. The alternatives are unfortunately not better.
- dcow 3y ago
  I bet society would figure out how to make it work if the law changed.
- boilerupnc 3y ago
  There were a number of physician owned hospitals. Here's one compiled list [0] circa 2013. ACA seems to have limited growth of these hospitals [1]. My view with a local flavor of this in Indianapolis (St.V Heart Center) was pretty positive and matches with the WSJ articles assertion. When doctors feel in control and view the hospital as a reflection of their own community - holistically the entire operation embodies and reflects that from the doctors to the nurses to the staff themselves. Similar to how a small-town practice reflects the values of the doctor who runs it and depends on its reputation. Some of these hospitals have been sold off and I've heard nurses and doctors lament of the better times when they felt more autonomy when the doctors made the decisions based on shaping a hospital that they'd like to be admitted to rather than the vision from an MBA. "Specialty physician-owned hospitals focused on cardiology and cardiac surgery were found to deliver higher-quality care than nonprofit hospitals, with lower rates of hospital readmission or mortality for high-risk surgery. Physician-owned specialty hospitals for orthopedic procedures, such as hip and knee replacements, offered lower costs and higher quality than nonprofit counterparts." [0] https://www.beckersspine.com/lists/14578-56-physician-owned-hospitals-to-know https://www.beckersspine.com/lists/14578-56-physician-owned-... [1] https://www.wsj.com/articles/end-obamacares-ban-on-physician-owned-hospitals-medicare-medicaid-healthcare-obama-price-control-competition-doctor-ef381a9e https://www.wsj.com/articles/end-obamacares-ban-on-physician...
pydry 3y ago
"UK opposition Labour plans to give workers a third of seats on company boards" https://www.reuters.com/article/us-britain-politics-labour-board-idUSKCN1M30B0 https://www.reuters.com/article/us-britain-politics-labour-b... The business lobbies freaked out when that was proposed, in spite of it being fairly moderate. It was one of the reasons for the character assassination extravaganza (anti semitism, "terrorist friends", etc).
sxg 3y ago
The ACA enacted a completely opposite law—doctors are not allowed to own hospitals.

CamelCaseName 3y ago

This is true for the veterinary world, probably other professions too. The result is that a veterinarian owns the business on paper, but the PE fund can take over or replace them as needed.

darth_avocado 3y ago
The veterinarian world is doomed. Increasingly PE is taking over entire neighborhoods when it come to vet hospitals. This is led to increased wait times, lower standards of care, higher cost to consumers and higher pet mortality rates. That can very well translate to human healthcare.
- rcme 3y ago
  But the barriers to starting a new vet are pretty low. If existing vets are inadequate, new ones can start.
  - darth_avocado 3y ago
    Capital is the barrier and the requirement is not low in the areas PE takes over.
    - rcme 3y ago
      It seems like a vet would be about as expensive as opening a restaurant, maybe 1-3x as much. That doesn't seem like the most capital intensive thing ever.
      - RALaBarge 3y ago
        Other than the doctorate, of course.
        rcme 3y ago
        Presumably there is already a supply of licensed veterinarians, unless the PE vet practices are hiring unlicensed practitioners.
        anigbrowl 3y ago
        How many of them have easy access to a million bucks?
        rcme 3y ago
        Probably most of them. I don't think the limiting factor is access to capital, but rather the risk.
      - darth_avocado 3y ago
        It is more expensive to open a clinic than a restaurant, with the costs being anywhere from $500k-$1M. The main difference between the two is that the vet clinic has higher running costs aka salaries in the early years before the practice takes off. For restaurants, it’s relatively lower (staff salaries and produce) if the demand is lower.
        rcme 3y ago
        500K-1M seems about 1-3x a typical restaurant. I'd also be surprised to learn that running a vet is more expensive than a restaurant. The margins are seem like they'd be way lower in a restaurant.
  - classichasclass 3y ago
    No. My late father started his own solo vet practice in 1983, in that less capital intensive environment, and he still required a substantial amount of seed capital to procure and retrofit the building to meet regulations and have enough in the tank to keep it going through the initial lean business years. (There were other complications related to the specific property and title liens not relevant here.) In these days it's not much different than a solo medical practice in terms of startup costs. Later VCA and Banfield asked him every year to sell out and he never did, but he was an already established practice by then. I can see why new vets are much less likely to embark on it.
    - rcme 3y ago
      Not sure what your point is. I'm not saying you can open a vet for free. All businesses require capital. But, as evidenced by your father, opening a new vet practice is not some totally new thing no one has ever done before. People have done it and people will continue to do it.
      - pessimizer 3y ago
        > opening a new vet practice is not some totally new thing no one has ever done before. No one claimed no one had ever opened a vet practice. What they are claiming is that it is expensive. Nobody is accusing you of saying that someone can open a vet practice for free. What they are claiming is that it is expensive. > People have done it and people will continue to do it. Everyone knows this that independent vet practices have been opened in the past, and that some are likely to be opened in the future.

appplication 3y ago

As I understand it, there actually are laws for this for medical practices in most states (but I think not all?)

thegaulofthem 3y ago
Easy, hire a partner-figurehead as a rubber-stamp and you’re off to the races. I’ve seen similar in Federal contracting, hire a tick-the-box preference point partner with a make-work role to get contracts.

gruez 3y ago

That model works well for professional services (eg. lawyers, accountants, consultants) because require very little capital. Everything from the office they work in, to the computers they type on can be leased. The same can't be said for hospitals, which cost hundreds of millions to build and equip. How are you going to raise all that capital from only the doctors? They're rich, but not that rich. Moreover, the payback on said investment is on the order of decades. A doctor late in their career has the most to invest, but they're also nearing retirement. What are you going to do with their shares? Sell them to newly graduated doctors who are hundreds of thousands in debt? Let them keep them, at which point they turn into quasi-investors?

ajhurliman 3y ago
That’s not true. There was a doctor owned clinic in Seattle (The Polyclinic) with multiple locations across the city. A few years ago it was purchased by Optum (United Healthcare), and the standard of care has fallen through the floor.
- magnawave 3y ago
  …and sadly the doctors have been fleeing too, all my doctors have left. Their replacements aren’t bad, but not to the same top notch level of care. The Polyclinic was honestly off the charts excellent, and now it’s just “fine”. In a few more years who knows. The alternatives are unfortunately not better.
dcow 3y ago
I bet society would figure out how to make it work if the law changed.
boilerupnc 3y ago
There were a number of physician owned hospitals. Here's one compiled list [0] circa 2013. ACA seems to have limited growth of these hospitals [1]. My view with a local flavor of this in Indianapolis (St.V Heart Center) was pretty positive and matches with the WSJ articles assertion. When doctors feel in control and view the hospital as a reflection of their own community - holistically the entire operation embodies and reflects that from the doctors to the nurses to the staff themselves. Similar to how a small-town practice reflects the values of the doctor who runs it and depends on its reputation. Some of these hospitals have been sold off and I've heard nurses and doctors lament of the better times when they felt more autonomy when the doctors made the decisions based on shaping a hospital that they'd like to be admitted to rather than the vision from an MBA. "Specialty physician-owned hospitals focused on cardiology and cardiac surgery were found to deliver higher-quality care than nonprofit hospitals, with lower rates of hospital readmission or mortality for high-risk surgery. Physician-owned specialty hospitals for orthopedic procedures, such as hip and knee replacements, offered lower costs and higher quality than nonprofit counterparts." [0] https://www.beckersspine.com/lists/14578-56-physician-owned-hospitals-to-know https://www.beckersspine.com/lists/14578-56-physician-owned-... [1] https://www.wsj.com/articles/end-obamacares-ban-on-physician-owned-hospitals-medicare-medicaid-healthcare-obama-price-control-competition-doctor-ef381a9e https://www.wsj.com/articles/end-obamacares-ban-on-physician...

pydry 3y ago

"UK opposition Labour plans to give workers a third of seats on company boards" https://www.reuters.com/article/us-britain-politics-labour-board-idUSKCN1M30B0 https://www.reuters.com/article/us-britain-politics-labour-b... The business lobbies freaked out when that was proposed, in spite of it being fairly moderate. It was one of the reasons for the character assassination extravaganza (anti semitism, "terrorist friends", etc).

sxg 3y ago

The ACA enacted a completely opposite law—doctors are not allowed to own hospitals.