2 ms·

Taking the emotion out of the analysis, all i am hearing is that the PE uses more capital, but produces a cheaper, more efficient service. If the original smal

• lapcat 3y ago
  > produces a cheaper, more efficient service. More profitable perhaps, but not cheaper. In fact, usually more expensive, because the PE firms buy up all the clinics in a city, eliminating competition, and then they can set the rates to whatever they want. Needless to say, any "savings" are passed along to the investors, not to the consumers. > If the original small business owner sold, the money they got paid isn't gone - they could've used it to start another small business They're usually selling because of retirement, so they're not going to start another business. The issue here is that the business is not passed along to another new small business owner, it's passed along to a giant PE firm. > produce a more intensely competitive environment. In reality, to reproduce an environment with less competition and more consolidation, as mentioned above.
  • ghufran_syed 3y ago
    Great, that "less competition" means higher prices... Which means someone setting up a new clinic can benefit from those higher prices - oh look, now you have competition again.
• harperlee 3y ago
  Sure, until they have no competition anymore, and raise the prices to whatever they want them to be, extracting 99% of value from what they offer with a huge moat that eliminates all competition. Then the consumer is left with no pricing negotiation and the experience is objectively worse for most of the society. The escape hatch for that is taxes to the powerful market entities, that revert value back to the less powerful market entities, but that's not popular in the U.S.
• TeMPOraL 3y ago
  > i am hearing is that the PE uses more capital, but produces a cheaper, more efficient service. You have to understand what "more efficient" means. It really means "it's shit and only getting worse, but isn't bad enough to abandon the service entirely". It starts with a corresponding price drop, and you either get a race to the bottom, or the competition gives up early, at which point the quality continues to go down the drain, but the price stays the same, as the provider pockets the difference.
• banannaise 3y ago
  Because customers tend to almost universally agree that they create a worse service in the process. Scaled systems perform poorly in areas where people require customized service rather than a one-size-fits-all experience, and veterinary care is absolutely not a one-size-fits-all type of service.
• yoyohello13 3y ago
  Cheaper and more efficient does not mean higher quality.
• abosley 3y ago
  Quantity has a quality of its own. Dude named Piketty wrote almost 2k pages about wrt capital accumulation. The opposite of what you propose is what actually happens. For another example, please see Amazon.