Hindenburg Report - PE and Healthcare

[unkemptmiso]

Anyone catch the latest Hindenburg report on Lifestance? The points mentioned are nothing surprising - worsening clinician churn, disgruntled staff, deteriorating payor mix, pushing med management for soft indications, etc. I thought the Zoloft story was a funny cherry on top for the whole report. Wonder if they'll ever get to uncovering PE in anesthesia. Thoughts?

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[kb1900]

How many years til the first regulation against PE involvement in healthcare if ever I wonder. Feel like patients and laypersons are increasingly aware and disdainful

 

[<(^_^)>]

How many years til the first regulation against PE involvement in healthcare if ever I wonder. Feel like patients and laypersons are increasingly aware and disdainful

Agreed, plus private equity is never going to get any sympathy from the public. And politicians will get brownie points for going after them.

 

[GassYous]

How many years til the first regulation against PE involvement in healthcare if ever I wonder. Feel like patients and laypersons are increasingly aware and disdainful

Although it seems to be slowing down for anesthesia I think it's ramping up for surgery. Several practices in my area have sold out for what I'm sure were very high value deals.

 

[circleK]

I love this assessment:
“Overall, we think LifeStance is a classic example of what happens when private equity meets a ‘hot’ healthcare sector: Massive debt fueling a grinding, metric-focused corporate culture resulting in worse quality of care for patients, a worse environment for clinicians and long-term losses for the average investor.”

 

[anbuitachi]

How many years til the first regulation against PE involvement in healthcare if ever I wonder. Feel like patients and laypersons are increasingly aware and disdainful

after theres no more money left to be earned by PE in healthcare, then they'll leave and find their next target. then politicians may pass some regulation

 

[CubsDynasty]

I heard a recent podcast where someone said that you don't get a dog and then get mad at it for barking. Same thing with PE, until there are federal regulations they'll keep doing what they're doing because its their business model. If no regulations are made then naturally only once it stops being an easy source of income will they pivot to their next ventures. But until then they'll just keep doing their job regardless of collateral damage.

 

[vm26]

I heard a recent podcast where someone said that you don't get a dog and then get mad at it for barking. Same thing with PE, until there are federal regulations they'll keep doing what they're doing because its their business model. If no regulations are made then naturally only once it stops being an easy source of income will they pivot to their next ventures. But until then they'll just keep doing their job regardless of collateral damage.

I am not a fan of PE but if all physicians, private practices, hospitals, HC systems etc were "thriving", they wouldn't be any available buy opportunities. Our system is broke. We annually get pay decreases via CMS and routinely get scr*wed by commercial insurance (essentially a monopoly in the US). Population is getting older and unhealthier (unrelated to aging). Everything is more expensive. Overall things look pretty bleak and then PE comes in to save the day (along with lots of upfront cash that goes to the select few).

At times I wonder which entity is worse-CMS/Govt or Commercial Insurance/corporations.

 

[lotsapain]

You mean this:

LifeStance: A Private Equity-Backed Mental Health Rollup Headed For A Breakdown – Hindenburg Research

hindenburgresearch.com

It is not all straightforward the CEO's reply as to the reasoning is indeed partly true: "personal motivations, burnout driven by pandemic fatigue, some retirement, " so its a mixed bag as providers are also searching for the next best thing...... indeed the industry has a lot to do with it as well looking for larger margins lowest care they can buy who cares about quality these days ?

 

[kidthor]

And politicians will get brownie points for going after them.

Sadly the politicians get major donations from PE and many of the politicians are PE graduates. They don't want to bite the hand that feeds them.

Plus the public at large has never heard of most PE firms, so it's all smoke and mirrors to them. Similarly they've never heard of Optum, they don't know what a pharmacy benefit manager is, and they have no idea what a facility fee means. All they know is that "the doctor" sent a huge bill and they're mad at us physicians.

 

[aneftp]

Labor costs are very high in healthcare and not easily replaceable.

Thats the issues private has to deal with. It’s hard to outsource labor for cheaper. Labor costs (and not insurance payor mix) was really the downfall of envision. They will claim the usual debt they couldn’t meet. But the reason they couldn’t meet the debt is because not the insurance payments. The labor cost spiraled out of control.