Yes, a lot of bills are introduced in one chamber and die in that same chamber. This case is referring to it being introduced by "Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Jeff Merkley (D-Ore.), along with Representatives Val Hoyle (D-Ore.), Alexandria Ocasio-Cortez (D-N.Y.), and Suhas Subramanyam (D-Va.)", presumably there's a companion bill for the house, since the links seem to only have the Senate version.
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.
It should be more about making certain levels of consolidation and deep erosion of local ownership illegal.
We have run this country on an assumption that we must give businesses a high amount of freedom. An argument can be made that businesses have been given too much freedom in our system. We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form.
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
Can you define profit? Would a doctor be allowed to earn more than $200 per hour? $300 per hour? $400 per hour? Is a doctor allowed to be paid per procedure or time?
How much would you want to sacrifice your 20s and early 30s? How much would you need to work in the middle of nowhere where your kids won’t have the best opportunities?
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
Why stop at healthcare? Why not other essentials of life, like food or toilet paper?
You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
Many of them already lack profitability without subsidy.
Many agricultural products all pass through the same mega-sized processors and entities. Driscoll’s, Tyson, etc.
We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
Like what?
Many of them already lack profitability without subsidy.
That doesn't mean anything without context. How are the non-PE farms doing?
We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
"We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form."
Do you realize that when Walmart moves into a community, prices charged for everyday things overall drop significantly, both at Walmart and their competition, which means that poor families are able to buy more with every dollar.
They then get to skim the other side of those subsidies, too, since they sell so many items that qualify for SNAP and WIC, as well as being one of the largest if not the largest prescription supplier in the country.
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
You don't need to disallow them for necessary care to be provided. You can just have public healthcare programs. That can look like publicly-owned hospitals or regulation that private hospitals must provide certain services under certain conditions if they want to keep operating. Private healthcare then works to provide more than that basic service that fulfills necessary care, to the benefit of the public that can afford more.
That’s a good expansion of the premise, I’d support your idea wholeheartedly. Let PE raid chain restaurants and toy stores, not essential services where they add no value and only extract wealth.
Easy. PE 99% of the time buy businesses that were already failing and provide a lifeline. A failing business can't afford to pay for expensive medical treatments without a loan that a bank will not provide since it is failing.
People who are vehemently against PE generally do not have any idea of how the system works
They don't have to have an in-depth understanding of leveraged finance to get pissed off when their doctors start doubling prices or their own employment conditions get worse or their parents get treated badly in care homes because the staff are now overworked etc. they're mad at the outcomes they're overwhelmingly not actually trying to debate the merits of it from an exit liquidity perspective.
That's one model of private equity, but PE has also been buying up very successful local businesses in areas like veterinary care. The PE firm keeps the name and branding of the local vet because people have traditionally wanted to take their pet to a trusted local vet, not a big chain.
Many medical practices (and other businesses) are poorly operated and administered. I think of my dentist: terrible website (even by 1995 standards), awful at follow up, weird insurance coverage (since she doesn't have time to follow up with new plans it seems) and almost no appointment reminders. There are obvious things to do that could drive business for her.
It makes sense to me that someone could come in and say "hey, let me run the business + finance side of the house while you practice medicine" and at least on paper I can see a real world where that works out for everybody.
Of course, soon you end up with dentists pushing unnecessary procedures and more, so it doesn't always works out that way.
Improving efficiency and optimizing profit are two overlapping segments on the road to crap. It’s not easy to stop the car once you put the bean counters in the driver's seat. If a company is able to do so, it’s usually because there’s a strong leader or culture to resist the slide. But otherwise it’s a thousand small decisions that all seem reasonable on their own.
Many new medical treatments/approaches involve heavy capex (robots, light and ion sources, imaging systems, etc) and removing private money that doesn't belong to individual physicians personally will suck a vast amount of capital out of healthcare, creating significant forces against innovation and deployment.
PE exists because a lot of companies are poorly managed. It's better for your local hospital to be taken over by a PE firm than to go out of business. You can say that it would be even better if the government ran the hospital, and you would be right, but that would require a radical overhaul of the American healthcare system. Until that happens, PE plays a major role in keeping things working.
PE staff are more intelligent and more shrewd than the people running the businesses they buy. Being a good doctor doesn't make you a good businessman.
I'm not a huge fan of PE but the point of economics to deliver cheap and quality goods to consumers not keep people in a job.
In healthcare in US in particular I think the main thing that capital should be (if regulators allow) boutique / specialists that e.g. are the best in the biz at doing MRI scans, in some states my understanding is that it's literally illegal to start a business aiming to make one small part of the process better.
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.
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.
Bi…cameral legislation?
...meaning both houses of Congress.
As opposed to the many famous cases of unicameral American legislation?
Yes, a lot of bills are introduced in one chamber and die in that same chamber. This case is referring to it being introduced by "Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Jeff Merkley (D-Ore.), along with Representatives Val Hoyle (D-Ore.), Alexandria Ocasio-Cortez (D-N.Y.), and Suhas Subramanyam (D-Va.)", presumably there's a companion bill for the house, since the links seem to only have the Senate version.
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.
The upside is to the folks who sold the businesses they owned.
Should they be outlawed from selling to certain classes of investor? Which?
It should be more about making certain levels of consolidation and deep erosion of local ownership illegal.
We have run this country on an assumption that we must give businesses a high amount of freedom. An argument can be made that businesses have been given too much freedom in our system. We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form.
Healthcare practices that provide necessary care shouldn’t even really be allowed to be for-profit entities if you ask me. The incentives become too perverse as a result.
Can you define profit? Would a doctor be allowed to earn more than $200 per hour? $300 per hour? $400 per hour? Is a doctor allowed to be paid per procedure or time?
How much would you want to sacrifice your 20s and early 30s? How much would you need to work in the middle of nowhere where your kids won’t have the best opportunities?
I updated my comment, I mean a for-profit entity versus non-profit, which the IRS already defines.
Not-for-profit entities can still pay market rate wages to employees and owners.
Should Doctors have a legally enforced max pay? Same with the web devs, max $150K, anything else is just profit driven bullshit right?
No, not-for-profit entities pay market rate salaries. This is already a well-established system.
Why stop at healthcare? Why not other essentials of life, like food or toilet paper?
Hippocratic oath?
You’re absolutely right. For example, we’ve seen the negative impacts from excessive agricultural consolidation.
Many of them already lack profitability without subsidy.
Many agricultural products all pass through the same mega-sized processors and entities. Driscoll’s, Tyson, etc.
We’ve already made things like water and sanitation non-profit/government owned so the idea of doing more of that for food and essentials isn’t that crazy.
Like what?
That doesn't mean anything without context. How are the non-PE farms doing?
sanitation: please see https://en.wikipedia.org/wiki/Waste_Management,_Inc.
water, but not power, or natural gas?
Google “taylor farms cyclospora” or “tyson beef prices shortage” for an example of the problems of highly consolidated processing.
I wasn’t talking about private equity farms versus not, I’m generally talking about industry consolidation.
Sanitation includes sewers which are typically municipal.
Power and natural gas are legal monopolies with strict rules on pricing.
There are also public electric utilities such as Cleveland Public Power.
https://en.wikipedia.org/wiki/List_of_foodborne_illness_outb...
If a product isn't nationally consolidated, it can't have a national foodborne illness outbreak.
"We’ve allowed Amazon and Ticketmaster and Walmart to exist and they shouldn’t exist in their present form."
Do you realize that when Walmart moves into a community, prices charged for everyday things overall drop significantly, both at Walmart and their competition, which means that poor families are able to buy more with every dollar.
What do you have against poor people?
https://en.wikipedia.org/wiki/Boots_theory
And the employer with the largest amount of employees using SNAP benefits is…
Walmart is subsidized by the government to the tune of $2,000 per employee due to their low wages: https://rmfu.org/taxpayer-dollars-subsidize-wal-mart/ [1]
They then get to skim the other side of those subsidies, too, since they sell so many items that qualify for SNAP and WIC, as well as being one of the largest if not the largest prescription supplier in the country.
(25% of Walmart employees qualify for Medicaid https://mafainsurance.com/how-many-walmart-employees-are-on-...)
So their employees on SNAP and Medicaid turn right around and spend that money inside Walmart.
What competition? When Walmart comes to town, the competition closes.
[1] Probably a lot higher since this article is about 20 years old
You don't need to disallow them for necessary care to be provided. You can just have public healthcare programs. That can look like publicly-owned hospitals or regulation that private hospitals must provide certain services under certain conditions if they want to keep operating. Private healthcare then works to provide more than that basic service that fulfills necessary care, to the benefit of the public that can afford more.
If the business is a hospital?
Yes.
I'd expand that to any type of business that has effectively inelastic demand through the ability to hold people emotionally hostage.
So, for example, in addition to hospitals also include veterinarians, funeral services, family planning, etc.
Soulless PE vultures should be barred from all of this.
That’s a good expansion of the premise, I’d support your idea wholeheartedly. Let PE raid chain restaurants and toy stores, not essential services where they add no value and only extract wealth.
Yes. This is already the case for law firms as they have to be owned and managed by lawyers, in most jurisdictions.
Easy. PE 99% of the time buy businesses that were already failing and provide a lifeline. A failing business can't afford to pay for expensive medical treatments without a loan that a bank will not provide since it is failing.
People who are vehemently against PE generally do not have any idea of how the system works
That's just not true. Distressed and turnaround investing represent less than 20% of PE acquisitions [0].
[0] https://www.ey.com/en_us/insights/private-equity/pulse
They don't have to have an in-depth understanding of leveraged finance to get pissed off when their doctors start doubling prices or their own employment conditions get worse or their parents get treated badly in care homes because the staff are now overworked etc. they're mad at the outcomes they're overwhelmingly not actually trying to debate the merits of it from an exit liquidity perspective.
That's one model of private equity, but PE has also been buying up very successful local businesses in areas like veterinary care. The PE firm keeps the name and branding of the local vet because people have traditionally wanted to take their pet to a trusted local vet, not a big chain.
written by someone who worked in private equity for 20 years:
https://www.bloomberg.com/news/articles/2025-06-06/private-e...
https://archive.is/27tJr
Many medical practices (and other businesses) are poorly operated and administered. I think of my dentist: terrible website (even by 1995 standards), awful at follow up, weird insurance coverage (since she doesn't have time to follow up with new plans it seems) and almost no appointment reminders. There are obvious things to do that could drive business for her.
It makes sense to me that someone could come in and say "hey, let me run the business + finance side of the house while you practice medicine" and at least on paper I can see a real world where that works out for everybody.
Of course, soon you end up with dentists pushing unnecessary procedures and more, so it doesn't always works out that way.
Improving efficiency and optimizing profit are two overlapping segments on the road to crap. It’s not easy to stop the car once you put the bean counters in the driver's seat. If a company is able to do so, it’s usually because there’s a strong leader or culture to resist the slide. But otherwise it’s a thousand small decisions that all seem reasonable on their own.
Many new medical treatments/approaches involve heavy capex (robots, light and ion sources, imaging systems, etc) and removing private money that doesn't belong to individual physicians personally will suck a vast amount of capital out of healthcare, creating significant forces against innovation and deployment.
PE exists because a lot of companies are poorly managed. It's better for your local hospital to be taken over by a PE firm than to go out of business. You can say that it would be even better if the government ran the hospital, and you would be right, but that would require a radical overhaul of the American healthcare system. Until that happens, PE plays a major role in keeping things working.
PE staff are more intelligent and more shrewd than the people running the businesses they buy. Being a good doctor doesn't make you a good businessman.
I'm not a huge fan of PE but the point of economics to deliver cheap and quality goods to consumers not keep people in a job.
In healthcare in US in particular I think the main thing that capital should be (if regulators allow) boutique / specialists that e.g. are the best in the biz at doing MRI scans, in some states my understanding is that it's literally illegal to start a business aiming to make one small part of the process better.
What does it mean in this context to be more intelligent and shrewd than the existing owners? Delivering better profit margins?
What shows that they are more intelligent? They might be better at extracting value from enterprise, but is that generally “more intelligent?”
Nothing a few bills slipped to republican and "moderate" democratic senators won't fix!
They'll still manage to figure out some loophole to do it anyway. PE really is cancer to most industries.
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.
Look up "Medical Loss Ratio" from the ACA if you want to find out where the perverse incentives for health care pricing comes from..
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.
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...
You know what american healthcare really needs is more regulation!
Are you saying it needs less? Why do you think that?
yes. It's completely insane that health insurance A) does all price discovery B) is tied to your employer.
Ask an American hospital how much something costs - you will get a completely fake price back, this is a sign of a totally broken market.