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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

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.

Waterluvian 12d ago
The Americans simply will not reject their broken for-profit medical system wholesale. What I see is one more attempt at chipping away at it in hopes that maybe they can succeed piecemeal.
- claytongulick 12d ago
  I'm not sure anyone has solved the problem, though. "For profit" isn't really the problem, fee for service is. Value based arrangements and capitated payment structures are real improvements. When you don't have any market forces constraining utilization, you get massive access problems.
  - Gigachad 12d ago
    I don’t think it’s useful to categorise these things as “solved” or “not solved”. They always exist on a scale. I can tell you I am infinitely more happy living with the Australian medical system than what the US has even if it isn’t flawless with zero issues left to deal with.
  - robmccoll 12d ago
    The United States has both market forces and massive access problems. I'm not sure you can establish that causal relationship.
    - georgemcbay 12d ago
      > The United States has both market forces and massive access problems. It boggles my mind when I still occasionally hear people speaking out against all forms of single payer healthcare in the US saying they don't want to have to wait weeks/months to see a doctor like they do in Canada/UK/wherever. If I give them the benefit of the doubt of not being paid lobbyists for the medical insurance industry, I can only surmise these people haven't been to a non-emergency doctor since prior to 2020. Because even here in the US if you aren't fabulously wealthy with concierge medical you'll be waiting weeks/months to see a 'doctor'. And you'll almost certainly never actually see a doctor, you're going to see an overworked NP (no shade on NPs here, most of whom are great, just establishing how our medical system actually works in 2026).
      - LoganDark 12d ago
        I'm in the US, and I see my GP every two weeks + can arrange for an appointment within about a day or over the phone whenever I need it. If I need to be referred to a specialist though, I could be waiting months just for the initial consultation, and then months again before anything happens. Also, there just aren't specialists in my area for some things. Been trying to get a consult about dissociative disorder for years now. My GP is great though, he constantly tells me about exciting new papers he's been reading and he loves to share science and research level stuff. It's clear that he loves his job, it makes me super happy. (He's an MD, not NP, and he takes Medicaid)
      - milesskorpen 12d ago
        This is not my family's experience on distinctly not-concierge-medicine Kaiser Permanente in the Bay Area. Always meet with doctors (and NPs), have gotten in quickly when necessary, etc.
        stephenhuey 12d ago
        California is the only state that regulates wait times for specialists. When you uttered the words "Bay Area" it signaled that you enjoy better service than most Americans. I know people in states very close to yours (as well as my own) who have had extensive wait times.
  - prophesi 12d ago
    Not offering solutions here, because I think it's more multi-faceted than I know about. But when people are afraid to take on the debt of on-board EMS for a 911 call, and local pharmacies are forced out to be bought up by the top national pharmaceutical companies letting them rent-seek, I do think "for profit" is part of this multi-faceted problem.
  - Wololooo 12d ago
    For profit IS the problem, the fundamental issue is that there are some services that needs to be run at a loss because the profit is the service which is being provided, that is the whole point of public service and paying taxes in order to have those operated. Now I'm not advocating for reckless spending, you can run services with reason while staying within a spending envelope, but there is a striking difference between entities that are specifically aligned for profit and those who aren't, and this is very noticeable in the health sector, in America, were wealth directly correlates with health.
- 999900000999 12d ago
  Reagan and other racists succeeded in turning government benefits into a synonym for POC stealing from White Americans. It’s fine for a military defense contractor to go a few billion over budget for a weapons platform that barely works, but if a single mother uses food stamps to buy cake ingredients and then sells a few pieces of cake that’s a travesty. Millions of Americans, not just white, but plenty of Hispanics, Blacks and Asians too, voted to take away their own medical insurance. Because they know that they’re just temporarily embarrassed millionaires. Not the type of people who need handouts.
brightball 12d ago
That’s also a correlation of federal vs state policy. Federal leaves nowhere to run.
SpicyLemonZest 12d ago
Is there such a pattern? I'm not aware of any data pointing towards one, and I know lots of businesses with no monopoly or regulatory moat that have been acquired by private equity firms. I think people just don't care when PE buys businesses that don't seem very important.
- AnthonyMouse 12d ago
  If PE buys something that doesn't have a moat then they can't enshittify it because the customers would immediately switch to alternatives. They often still buy those things, e.g. when there is a failing company in a competitive market that could do better with new management, but then no one complains about it because they're not making the product worse (and can't because there is actual competition).
deleted 12d ago
[deleted]
dadrian 12d ago
That’s absolutely not true. Private equity regularly buys small businesses, D2C businesses, retail businesses, failing businesses, software businesses…
- misterderpie 12d ago
  Genuine Q: Are they buying failing businesses because they see potential and want to get those on the right track, or are they buying them because their forecast tells them they can still make money, before shutting them down for eternity?
  - what-the-grump 12d ago
    It doesn’t matter to PE as long as they can make a profit. Buy a failing business and leverage debt on it until you can’t, spend the money on yourself restructuring the business. Buy a working business and gut it for multiple. Buy failing businesses to offset tax burden. This a meta level game, they don’t care about the outcome as long as it produces profit. Product quality goes down the drain? That product is retirement homes, healthcare, food, utility, schools, it doesn’t matter. There is a million levels of separation and paperwork and a corp structure to prevent shit swimming up the stream. Net result, if you live in America look around you, go to an auto service center, or a clinic. It’s been gutted for profit one way or another.
ip26 12d ago
Regulation is usually what you accept in exchange for a monopoly. I would argue a granted monopoly without any regulation is evidence of regulatory capture. If you want to argue from first principles, and we accept for a moment that granted monopoly is the system we are working in (whether or not you feel it's the optimal regime) then I'd argue there's a clear gap in regulation, as flagrant abuse of the consumer has not been prevented.
- Nifty3929 12d ago
  Not really. Monopolies are an invitation to competition: Your margin is my opportunity, as it were. They are therefore hard to maintain absent some kind of external force to support it: Regulations (regulatory capture), licensing, explicit grant from the government, intellectual property laws, or some kind of collusion or market manipulation (more leading to oligopolies rather than monopolies). This is how industrial barons of the early-mid 20th century operated, as an example, with collusion and price fixing type things. Or hospitals and medical facilities today with certificate-of-need laws enforced by the government.
  - dregitsky 12d ago
    This is inaccurate - natural monopolies are a thing. Monopolies happen due to barriers to entry, and not all barriers to entry are government-created or illegal: network effects, big upfront costs, economies of scale, control of a scarce resource, etc. Regulation can produce a monopoly, but lots of regulations also exist to keep natural monopolies in check.
    - throwaway13337 12d ago
      True. Though I don't like the term 'natural monopoly'. Most natural monopolies aren't - or don't have to be. Maybe a term like 'natural markets' captures it better? The property being that natural markets/monopolies provide some sort of substrate on which a market can exist. Good regulations seem to be ones that force open protocol and interoperability of these platforms that get large. This creates a new marketplace abstraction layer that enables new innovation to thrive. I'm certainly glad that I'm not on AOL's internet. And also glad that internet exists in part due to Bell's telephone system being forced open. Bad regulations do not seem to have that characteristic. It's too bad we do not have vocabulary to tell them apart. Public good type regulations are more muddy and can be used as a weapon more often than not.
duped 12d ago
> They like companies with some kind of moat that makes it hard to unseat them. The biggest moat is capital. PE is buying up things like medical practices, law firms, vets, etc, where typically there would be an upwards path for one generation to hire new blood to cover their markets and then sell partnership stakes to them when they want to retire. But why should an owner of a practice sell to their junior staff when PE is there offering 2, 3, 5x as much? Consolidation of these kinds of businesses at the hands of PE is endemic of systemic lack of capital acquisition of a generation of people, held down by debt and concerns about practical shit like healthcare. PE is just a symptom of larger macro economic trends, namely the depletion of the next generation from free cash they could use to become business owners.
- throwaway13337 12d ago
  These PE-owned companies create market demand by being shitty. Somehow they are able to keep their margins and their market so that their business model makes sense. That's a puzzle, right? There is no shortage of investment looking for great returns. A market with huge demand not being met adequately is a dream to investors. Even more when you know the competition must continue to fuck their customers because they paid above market rates for the purchase and the business is saddled with debt obligations it must meet (Leveraged buyouts do that). What could stop new competition from beating them out? It's not capital.
  - what-the-grump 12d ago
    It is capital? It’s going to the same PEs and private markets. Who the hell is going to take the risk on and for what? Take x billon dollars to build from scratch or near guaranteed profit to buy 50 practices and shittify them for near guaranteed profit. Show me an example of trend reversal please of this happening in any sector. These are essentials and basics and they are captured, this isn’t a froyo start up that has a 3 year cycle.
  - duped 12d ago
    PE doesn't create anything. They extract from margins. It only works by having more capital to begin with. Otherwise you wouldn't see consolidation where it shouldn't exist.
croon 12d ago
I'm unsure if I'm reading you correct. Are you saying that the disease is all "monopoly and regulation", or just some of it? Healthcare, infrastructure, etc are natural monopolies, and the alternative isn't much better. No one wants four parallell roads or multiple competing electrical grids, or side-by-side hospitals. We however don't want unnatural monopolies that have enough capital to swat away any competition, nor do we want natural monopolies taken over by rent-seekers.
Henchman21 12d ago
The disease is Capitalism.

Waterluvian 12d ago

The Americans simply will not reject their broken for-profit medical system wholesale. What I see is one more attempt at chipping away at it in hopes that maybe they can succeed piecemeal.

claytongulick 12d ago
I'm not sure anyone has solved the problem, though. "For profit" isn't really the problem, fee for service is. Value based arrangements and capitated payment structures are real improvements. When you don't have any market forces constraining utilization, you get massive access problems.
- Gigachad 12d ago
  I don’t think it’s useful to categorise these things as “solved” or “not solved”. They always exist on a scale. I can tell you I am infinitely more happy living with the Australian medical system than what the US has even if it isn’t flawless with zero issues left to deal with.
- robmccoll 12d ago
  The United States has both market forces and massive access problems. I'm not sure you can establish that causal relationship.
  - georgemcbay 12d ago
    > The United States has both market forces and massive access problems. It boggles my mind when I still occasionally hear people speaking out against all forms of single payer healthcare in the US saying they don't want to have to wait weeks/months to see a doctor like they do in Canada/UK/wherever. If I give them the benefit of the doubt of not being paid lobbyists for the medical insurance industry, I can only surmise these people haven't been to a non-emergency doctor since prior to 2020. Because even here in the US if you aren't fabulously wealthy with concierge medical you'll be waiting weeks/months to see a 'doctor'. And you'll almost certainly never actually see a doctor, you're going to see an overworked NP (no shade on NPs here, most of whom are great, just establishing how our medical system actually works in 2026).
    - LoganDark 12d ago
      I'm in the US, and I see my GP every two weeks + can arrange for an appointment within about a day or over the phone whenever I need it. If I need to be referred to a specialist though, I could be waiting months just for the initial consultation, and then months again before anything happens. Also, there just aren't specialists in my area for some things. Been trying to get a consult about dissociative disorder for years now. My GP is great though, he constantly tells me about exciting new papers he's been reading and he loves to share science and research level stuff. It's clear that he loves his job, it makes me super happy. (He's an MD, not NP, and he takes Medicaid)
    - milesskorpen 12d ago
      This is not my family's experience on distinctly not-concierge-medicine Kaiser Permanente in the Bay Area. Always meet with doctors (and NPs), have gotten in quickly when necessary, etc.
      - stephenhuey 12d ago
        California is the only state that regulates wait times for specialists. When you uttered the words "Bay Area" it signaled that you enjoy better service than most Americans. I know people in states very close to yours (as well as my own) who have had extensive wait times.
- prophesi 12d ago
  Not offering solutions here, because I think it's more multi-faceted than I know about. But when people are afraid to take on the debt of on-board EMS for a 911 call, and local pharmacies are forced out to be bought up by the top national pharmaceutical companies letting them rent-seek, I do think "for profit" is part of this multi-faceted problem.
- Wololooo 12d ago
  For profit IS the problem, the fundamental issue is that there are some services that needs to be run at a loss because the profit is the service which is being provided, that is the whole point of public service and paying taxes in order to have those operated. Now I'm not advocating for reckless spending, you can run services with reason while staying within a spending envelope, but there is a striking difference between entities that are specifically aligned for profit and those who aren't, and this is very noticeable in the health sector, in America, were wealth directly correlates with health.
999900000999 12d ago
Reagan and other racists succeeded in turning government benefits into a synonym for POC stealing from White Americans. It’s fine for a military defense contractor to go a few billion over budget for a weapons platform that barely works, but if a single mother uses food stamps to buy cake ingredients and then sells a few pieces of cake that’s a travesty. Millions of Americans, not just white, but plenty of Hispanics, Blacks and Asians too, voted to take away their own medical insurance. Because they know that they’re just temporarily embarrassed millionaires. Not the type of people who need handouts.

brightball 12d ago

That’s also a correlation of federal vs state policy. Federal leaves nowhere to run.

SpicyLemonZest 12d ago

Is there such a pattern? I'm not aware of any data pointing towards one, and I know lots of businesses with no monopoly or regulatory moat that have been acquired by private equity firms. I think people just don't care when PE buys businesses that don't seem very important.

AnthonyMouse 12d ago
If PE buys something that doesn't have a moat then they can't enshittify it because the customers would immediately switch to alternatives. They often still buy those things, e.g. when there is a failing company in a competitive market that could do better with new management, but then no one complains about it because they're not making the product worse (and can't because there is actual competition).

deleted 12d ago

[deleted]

dadrian 12d ago

That’s absolutely not true. Private equity regularly buys small businesses, D2C businesses, retail businesses, failing businesses, software businesses…

misterderpie 12d ago
Genuine Q: Are they buying failing businesses because they see potential and want to get those on the right track, or are they buying them because their forecast tells them they can still make money, before shutting them down for eternity?
- what-the-grump 12d ago
  It doesn’t matter to PE as long as they can make a profit. Buy a failing business and leverage debt on it until you can’t, spend the money on yourself restructuring the business. Buy a working business and gut it for multiple. Buy failing businesses to offset tax burden. This a meta level game, they don’t care about the outcome as long as it produces profit. Product quality goes down the drain? That product is retirement homes, healthcare, food, utility, schools, it doesn’t matter. There is a million levels of separation and paperwork and a corp structure to prevent shit swimming up the stream. Net result, if you live in America look around you, go to an auto service center, or a clinic. It’s been gutted for profit one way or another.

ip26 12d ago

Regulation is usually what you accept in exchange for a monopoly. I would argue a granted monopoly without any regulation is evidence of regulatory capture. If you want to argue from first principles, and we accept for a moment that granted monopoly is the system we are working in (whether or not you feel it's the optimal regime) then I'd argue there's a clear gap in regulation, as flagrant abuse of the consumer has not been prevented.

Nifty3929 12d ago
Not really. Monopolies are an invitation to competition: Your margin is my opportunity, as it were. They are therefore hard to maintain absent some kind of external force to support it: Regulations (regulatory capture), licensing, explicit grant from the government, intellectual property laws, or some kind of collusion or market manipulation (more leading to oligopolies rather than monopolies). This is how industrial barons of the early-mid 20th century operated, as an example, with collusion and price fixing type things. Or hospitals and medical facilities today with certificate-of-need laws enforced by the government.
- dregitsky 12d ago
  This is inaccurate - natural monopolies are a thing. Monopolies happen due to barriers to entry, and not all barriers to entry are government-created or illegal: network effects, big upfront costs, economies of scale, control of a scarce resource, etc. Regulation can produce a monopoly, but lots of regulations also exist to keep natural monopolies in check.
  - throwaway13337 12d ago
    True. Though I don't like the term 'natural monopoly'. Most natural monopolies aren't - or don't have to be. Maybe a term like 'natural markets' captures it better? The property being that natural markets/monopolies provide some sort of substrate on which a market can exist. Good regulations seem to be ones that force open protocol and interoperability of these platforms that get large. This creates a new marketplace abstraction layer that enables new innovation to thrive. I'm certainly glad that I'm not on AOL's internet. And also glad that internet exists in part due to Bell's telephone system being forced open. Bad regulations do not seem to have that characteristic. It's too bad we do not have vocabulary to tell them apart. Public good type regulations are more muddy and can be used as a weapon more often than not.

duped 12d ago

> They like companies with some kind of moat that makes it hard to unseat them. The biggest moat is capital. PE is buying up things like medical practices, law firms, vets, etc, where typically there would be an upwards path for one generation to hire new blood to cover their markets and then sell partnership stakes to them when they want to retire. But why should an owner of a practice sell to their junior staff when PE is there offering 2, 3, 5x as much? Consolidation of these kinds of businesses at the hands of PE is endemic of systemic lack of capital acquisition of a generation of people, held down by debt and concerns about practical shit like healthcare. PE is just a symptom of larger macro economic trends, namely the depletion of the next generation from free cash they could use to become business owners.

throwaway13337 12d ago
These PE-owned companies create market demand by being shitty. Somehow they are able to keep their margins and their market so that their business model makes sense. That's a puzzle, right? There is no shortage of investment looking for great returns. A market with huge demand not being met adequately is a dream to investors. Even more when you know the competition must continue to fuck their customers because they paid above market rates for the purchase and the business is saddled with debt obligations it must meet (Leveraged buyouts do that). What could stop new competition from beating them out? It's not capital.
- what-the-grump 12d ago
  It is capital? It’s going to the same PEs and private markets. Who the hell is going to take the risk on and for what? Take x billon dollars to build from scratch or near guaranteed profit to buy 50 practices and shittify them for near guaranteed profit. Show me an example of trend reversal please of this happening in any sector. These are essentials and basics and they are captured, this isn’t a froyo start up that has a 3 year cycle.
- duped 12d ago
  PE doesn't create anything. They extract from margins. It only works by having more capital to begin with. Otherwise you wouldn't see consolidation where it shouldn't exist.

croon 12d ago

I'm unsure if I'm reading you correct. Are you saying that the disease is all "monopoly and regulation", or just some of it? Healthcare, infrastructure, etc are natural monopolies, and the alternative isn't much better. No one wants four parallell roads or multiple competing electrical grids, or side-by-side hospitals. We however don't want unnatural monopolies that have enough capital to swat away any competition, nor do we want natural monopolies taken over by rent-seekers.

Henchman21 12d ago

The disease is Capitalism.