PE world

[atlas_88]

Hi there!!

Hearing rumblings about upcoming sale of RCA!!
My husband just started with this PE and now we are hearing like they tried to sell RCA to eye care partners! And that didnot work out. And they are trying to sell it to insurance company.

Any information will be helpful!!

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[LightBox]

Isn't a sale a good thing? That's the whole point of this.

 

[dantt]

I dont know if anybody enjoys working for optum.

 

[MstaKing10]

Good for who is the question. The whole point of the initial aquisitiion is to sell again to a "bigger fish." With interest rate reductions maybe this is more likely to happen soon. RCA initial sale was 2020. 3-5 years is the usual hold time before resale for most PE investments so time is right.

 

[percyeye]

I'll never understand how such hard working and smart people who make it into Ophthalmology Residency get out and are willing to work for a PE company (AKA an investment bank or insurance company or some pension fund basically). I can understand those who sell for millions, in the end we all sell our business. But I find it weird that folks who get through Wills or Bascom find it too difficult to figure out a small business and not insist on being in that setting vs PE.

Medicine is selling out the entire profession, and some of these legacy practices will never come back.

 

[LightBox]

I think people are a little fried when they come out of training and just want some guaranteed income that is reasonably-good. And also in nice locations like California. Physicians are also notoriously adverse to risk. Hence, why people flock to Kaiser, PE-jobs, VA, etc

 

[docdoc2012]

The true reason is people who graduate from bascom, wills etc get used to big city life. And in big cities, predatory senior practices are a dime a dozen - they have terrible starting salaries, huge non-compete areas and most people end up getting shorted when it comes to partnering.
PE jobs offer a lot more predictability in bigger cities. Is it eventually akin to a glorified labor camp? Maybe. But atleast you get to sleep in fluffy beds and eat steak for dinner

 

[percyeye]

I always find it hilarious to look at what other businesses the Fund owns that is buying up these practices. Webster Equity Partners is the PE fund that is using other people's money to get loans to buy up these Retina offices and own Retina consultants of America. Their company also buys the restaurant Margaritavilles, a Pet care company, a Horse Saddle retailer, a little girl/baby clothing companies, and a cleaning company. So right after trying fluff up these Ophthalmology new grads and pat them on the back about what great patient care they are giving and count the money they made off of them, and then they go into the next meeting looking at total nacho and beer revenue from their Margaritavilles, and if right now Moms are buying enough baby sundresses. Just put a few Doctors on the Leadership team and it almost seems like the company actually cares about health care.

 

[Dusn]

Regardless, PE is not a long term job. Don’t buy a house (especially if noncompetes are legal in your state). Keep making plans to find or create a new job with long term stability

 

[LightBox]

I always wondered: why people seem to cast Kaiser jobs in a favorable light comapred to PE jobs? Do people just like working for some bureacratic monolithic entity (Kaiser) (where all providers are making the same $) instead of a similar organization where some members are making bank?

 

[eyeeye_captain]

For the OP, your husband unfortunately took a job where he’s a cog in a machine. When his contract comes up for renewal next year, good luck. If they’re buying at these rates, all costs must go down, which likely includes his salary. They probably won’t fire him at least.

We all know PE is garbage except for partners who get one or two bites of the cherry. The class B or C stock options the junior folks get are pretty worthless. You get your higher starting salary but nothing after. Maybe some free nachos?

Maybe me and my connections are in different markets and situations than docdoc’s, but I only know one person who went non-PE PP who wasn’t a partner by their second job at the worst.

My favorite example of this PE junk is a person I trained with who practices in a neighboring state. Not a partner. Multispecialty, a few practices get lumped together, gets nothing. About 75% of the docs are near retirement. Half have already hung it up, rest are about to. Shuttling specialists across massive territory because they can’t hire, even with a not terrible location. Trying to replace services with optometrists to the point of them managing advanced glaucoma patients with trabeculectomies. They have ODs leaving to go to America’s Best/My Eye Doctor, which I’m sure Percy can tell you is basically hell for them.

I’m no lover of Kaiser, but at least you get the pension and healthcare with a slow schedule. Similar to PE folks, people prioritizing location for the most part.

 

[solitude]

I always wondered: why people seem to cast Kaiser jobs in a favorable light comapred to PE jobs? Do people just like working for some bureacratic monolithic entity (Kaiser) (where all providers are making the same $) instead of a similar organization where some members are making bank?

I have never worked for Kaiser but rotated through it in training multiple times and know many docs who work there. I believe the reasons are: Location (almost exclusively in nice areas), job security, pension, free healthcare, lots of vacation, no need to fish for referrals, and an easy pace of practice. Also you can refer out a lot of the complex stuff so it's just in general, an easy life with minimal worries. Same reasons people take government jobs rather than in the private sector, for much less pay.

In contrast, PE does not offer most of these things. There is minimal job security, no pension, poor benefits, and they work you to the bone.

 

[Slide]

I always wondered: why people seem to cast Kaiser jobs in a favorable light comapred to PE jobs? Do people just like working for some bureacratic monolithic entity (Kaiser) (where all providers are making the same $) instead of a similar organization where some members are making bank?

Anecdotal sample size but most retina I know working for Kaiser seem very happy. They don't make as much as private practice but have good work/life balance. Also many of them are in SoCal or the West Coast which is probably part of it.

 

[MstaKing10]

I always find it hilarious to look at what other businesses the Fund owns that is buying up these practices. Webster Equity Partners is the PE fund that is using other people's money to get loans to buy up these Retina offices and own Retina consultants of America. Their company also buys the restaurant Margaritavilles, a Pet care company, a Horse Saddle retailer, a little girl/baby clothing companies, and a cleaning company. So right after trying fluff up these Ophthalmology new grads and pat them on the back about what great patient care they are giving and count the money they made off of them, and then they go into the next meeting looking at total nacho and beer revenue from their Margaritavilles, and if right now Moms are buying enough baby sundresses. Just put a few Doctors on the Leadership team and it almost seems like the company actually cares about health care.

Never thought of it that way but I guess you are right. I will say these firms are quite complex and the portion that runs the healthcare piece is run exclusively by executives with a ton of experience in healthcare space. I've met with them before and have been impressed with their ability to understand the complexities of running a practice pretty quickly. I'm certain as they pivot to the "next thing" their ability to understand the nuances of that space is likely equally fast, but I'm certain they likely stay in healthcare and don't pivot to diapers or wet wipes or whatever. I don't know much about Keiser other than the bureaucracy would probably drive me nuts. Is it similar to the VA or the like?

 

[percyeye]

Never thought of it that way but I guess you are right. I will say these firms are quite complex and the portion that runs the healthcare piece is run exclusively by executives with a ton of experience in healthcare space. I've met with them before and have been impressed with their ability to understand the complexities of running a practice pretty quickly. I'm certain as they pivot to the "next thing" their ability to understand the nuances of that space is likely equally fast, but I'm certain they likely stay in healthcare and don't pivot to diapers or wet wipes or whatever. I don't know much about Keiser other than the bureaucracy would probably drive me nuts. Is it similar to the VA or the like?

Here is their portfolio: Portfolio - Webster Equity Partners

They definitely invest in other sectors of Healthcare, but their portfolio isn't has big as I would think. Again it is split up into some random stuff, healthcare, restaurants, Radio, child care, building homes...aka whatever will make them a little money, which is what they care about. I'm sure they have people in there who know how to run some Eye Care practices, but in the end if Baskin Robins gets them a better return on their money they'd pivot there in a heart beat.

Another PE group American Vision Partners is owned by H.I.G group., who owns other health care companies bust also some food business including Patriot Pickle, a manufacturer and distributor for pickles in stores. So that is something awesome to be associated with. Again I find it hilarious, work your ass off, give away your entire 20's and some of your 30's to finally graduate and get a job for a PE place that may or may not value a Pickle company more than you.

 

[LightBox]

The PE guys definitely know the financials and inner workings of running a practice much better than most physicians. It's amazing how motivated people are to know all of the details when it's their money on the line. However, they haven't figured out how to "tame" the fiercely-independent, eccentric nature of most Ophthalmologists. It's an interesting game to see played out.

 

[dantt]

Here is their portfolio: Portfolio - Webster Equity Partners

They definitely invest in other sectors of Healthcare, but their portfolio isn't has big as I would think. Again it is split up into some random stuff, healthcare, restaurants, Radio, child care, building homes...aka whatever will make them a little money, which is what they care about. I'm sure they have people in there who know how to run some Eye Care practices, but in the end if Baskin Robins gets them a better return on their money they'd pivot there in a heart beat.

Another PE group American Vision Partners is owned by H.I.G group., who owns other health care companies bust also some food business including Patriot Pickle, a manufacturer and distributor for pickles in stores. So that is something awesome to be associated with. Again I find it hilarious, work your ass off, give away your entire 20's and some of your 30's to finally graduate and get a job for a PE place that may or may not value a Pickle company more than you.

To be fair, Nestle used to own Alcon. I remember getting chocolates and ensure in the company store back in the day. Nobody liked working there more under Novartis or spun off than under Nestle.

 

[percyeye]

The PE guys definitely know the financials and inner workings of running a practice much better than most physicians. It's amazing how motivated people are to know all of the details when it's their money on the line. However, they haven't figured out how to "tame" the fiercely-independent, eccentric nature of most Ophthalmologists. It's an interesting game to see played out.

I think they know how to run a practice by the book, but do they know how to run a sustainable and great cultured practice? Sure, I can look at some financials and say I thin it'd be better if we paid some people less, had one less front desk person, lower bonuses, see 70 people per day instead of 45, use cheaper products etc, but that doesn't mean in the long run it'll be successful.

 

[MstaKing10]

To be fair, Nestle used to own Alcon. I remember getting chocolates and ensure in the company store back in the day. Nobody liked working there more under Novartis or spun off than under Nestle.

This is what I mean. These organizations are vertically structured. So their healthcare investments are top down run by healthcare oriented leaders. Their other investments are similarly structured. At some point at the very top is a leader well versed in all investments I suppose. But to say that the guy/gal running the healthcare piece will pivot to running their adult diaper division is a bit absurd.

 

[MstaKing10]

I think they know how to run a practice by the book, but do they know how to run a sustainable and great cultured practice? Sure, I can look at some financials and say I thin it'd be better if we paid some people less, had one less front desk person, lower bonuses, see 70 people per day instead of 45, use cheaper products etc, but that doesn't mean in the long run it'll be successful.

A well run one will. A poorly run non-PE or PE private practice has no idea how to do this, regardless of ownership.

 

[Gonio5]

PE seems to have been successful in the infertility market. OB-GYN is not a competitive specialty for medical students but REI fellowships are very competitive. So much so that they can force fellows to spend 1.5 years of a 3 year fellowship doing research. Once finished, they don't have to work nights but sometimes have to work on Saturdays. The barriers to entry is fairly large because a practice needs a lab. PE also is attracted to the high fees that IVF generates. Google notes one cycle of IVF can be $25,000 or more. Often multiple cycles are needed.