Private equity pain practices suck

[bedrock]

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Getting away from politics for a minute-----I've been helping a family friend who is in Pain fellowship right now, to evaluate jobs she's looking at. Its been a while for me since I looked at the pain market and a few things stood out.

1- There are more available Pain jobs right now than I've ever seen. There are 6 open and advertised pain jobs in Southern California, and 5 open and advertised pain jobs in the Front Range of Colorado. Historically, both of those markets had very few Pain positions advertised. There are jobs all over both coasts, all over Florida, and a lot of jobs 1hr or less from a major city all over the country. There are academic pain positions available at U Colorado, Mayo clinic, Cleveland Clinic etc. In some ways its the best pain job market I've ever seen, BUT

2-A huge percentage, (more than half) of these jobs were at private equity practices. I looked at some of the contracts she's been offered and I calculated they are essentially taking 60% of the physicians revenue, including downstream revenue to the practice. I can understand a business taxing a physician employee who didn't start the business by pocketing 6% of their revenue but not 60%! Working for a private equity practice is essentially serving as a highly educated indentured servant.

So I'm starting this thread for other docs in fellowship or just out of practice as a PSA. Do everything you can not to sign with a private equity pain practice. No one stays long term in a private equity pain practice. You won't have stability or real security. You won't have freedom as the executive overlords move slowly and very frequently ignore physician concerns, and they will take more than half of the money you worked hard to earn.

The only time a PE pain job might make sense is if its your first job and you just have to live in a certain area for a couple years. Any other time, I would avoid private equity pain like the plague, and even if you take that PE job, don't delude yourself into thinking you'll want to stay with them long term and build a life in that area, with that PE job.

P.S- to job seekers out there. If you come across a job listing and either in the listing or later on the phone and they say they have pain jobs available within their company in multiple states, 99% of the time that is private equity

 

[rexed]

Getting away from politics for a minute-----I've been helping a family friend who is in Pain fellowship right now, to evaluate jobs she's looking at. Its been a while for me since I looked at the pain market and a few things stood out.

1- There are more available Pain jobs right now than I've ever seen. There are 6 open and advertised pain jobs in Southern California, and 5 open and advertised pain jobs in the Front Range of Colorado. Historically, both of those markets had very few Pain positions advertised. There are jobs all over both coasts, all over Florida, and a lot of jobs 1hr or less from a major city all over the country. There are academic pain positions available at U Colorado, Mayo clinic, Cleveland Clinic etc. In some ways its the best pain job market I've ever seen, BUT
2-A huge percentage, (more than half) of these jobs were at private equity practices. I looked at some of the contracts she's been offered and calculated they are essentially taking 60% of the physicians revenue, including downstream revenue to the practice. I can understand a business taxing a physician employee and taking 6% of their revenue but not 60%! Working for a private equity practice is essentially serving as a highly educated menial employee.

I'm making this thread for other docs in fellowship or just out of practice. Do everything you can not to sign with a private equity pain practice. No one stays for decades in a private equity pain practice. You won't have stability or real security. You won't have freedom as the executive overlords move slowly and very frequently ignore physician concerns, and they will take more than half of the money you worked hard to earn.

The only time a PE pain job might make sense is if its your first job and you just have to live in a certain area for a couple years. Any other time, I would avoid private equity pain like the plague, and even if you take that job, don't delude yourself into thinking you'll want to stay with them long term and build a life in that area.

Excellent advice. PE has no place in owning medical practices. Interestingly I've been getting numerous unsolicited emails over the past 3-4 months asking me if I wanted to sell my practice so the push is on, PE has found another potential production line revenue generator in pain...

 

[mille125]

Getting away from politics for a minute-----I've been helping a family friend who is in Pain fellowship right now, to evaluate jobs she's looking at. Its been a while for me since I looked at the pain market and a few things stood out.

1- There are more available Pain jobs right now than I've ever seen. There are 6 open and advertised pain jobs in Southern California, and 5 open and advertised pain jobs in the Front Range of Colorado. Historically, both of those markets had very few Pain positions advertised. There are jobs all over both coasts, all over Florida, and a lot of jobs 1hr or less from a major city all over the country. There are academic pain positions available at U Colorado, Mayo clinic, Cleveland Clinic etc. In some ways its the best pain job market I've ever seen, BUT

2-A huge percentage, (more than half) of these jobs were at private equity practices. I looked at some of the contracts she's been offered and I calculated they are essentially taking 60% of the physicians revenue, including downstream revenue to the practice. I can understand a business taxing a physician employee who didn't start the business by pocketing 6% of their revenue but not 60%! Working for a private equity practice is essentially serving as a highly educated indentured servant.

So I'm starting this thread for other docs in fellowship or just out of practice. Do everything you can not to sign with a private equity pain practice. No one stays for long term in a private equity pain practice. You won't have stability or real security. You won't have freedom as the executive overlords move slowly and very frequently ignore physician concerns, and they will take more than half of the money you worked hard to earn.

The only time a PE pain job might make sense is if its your first job and you just have to live in a certain area for a couple years. Any other time, I would avoid private equity pain like the plague, and even if you take that PE job, don't delude yourself into thinking you'll want to stay with them long term and build a life in that area.

I agree 100 percent. Been there and done that

 

[drusso]

Getting away from politics for a minute-----I've been helping a family friend who is in Pain fellowship right now, to evaluate jobs she's looking at. Its been a while for me since I looked at the pain market and a few things stood out.

1- There are more available Pain jobs right now than I've ever seen. There are 6 open and advertised pain jobs in Southern California, and 5 open and advertised pain jobs in the Front Range of Colorado. Historically, both of those markets had very few Pain positions advertised. There are jobs all over both coasts, all over Florida, and a lot of jobs 1hr or less from a major city all over the country. There are academic pain positions available at U Colorado, Mayo clinic, Cleveland Clinic etc. In some ways its the best pain job market I've ever seen, BUT

2-A huge percentage, (more than half) of these jobs were at private equity practices. I looked at some of the contracts she's been offered and I calculated they are essentially taking 60% of the physicians revenue, including downstream revenue to the practice. I can understand a business taxing a physician employee who didn't start the business by pocketing 6% of their revenue but not 60%! Working for a private equity practice is essentially serving as a highly educated indentured servant.

So I'm starting this thread for other docs in fellowship or just out of practice. Do everything you can not to sign with a private equity pain practice. No one stays for long term in a private equity pain practice. You won't have stability or real security. You won't have freedom as the executive overlords move slowly and very frequently ignore physician concerns, and they will take more than half of the money you worked hard to earn.

The only time a PE pain job might make sense is if its your first job and you just have to live in a certain area for a couple years. Any other time, I would avoid private equity pain like the plague, and even if you take that PE job, don't delude yourself into thinking you'll want to stay with them long term and build a life in that area.

It's also never been easier to open your own practice. AI is completely disrupting the health care industry. I can (and do) run all core business functions from my phone — EHR, Rev Cycle, HR, Payroll, even credentialing and compliance. Whatever "business solution" you're looking for, there's an app for that.

The only thing PE is still good for is money. Which, ironically, was their original purpose. With the Feds going after the corporate practice of medicine, the days of PE-owned practices and HOPD-employed MD's are numbered.

 

[callmeanesthesia]

Hopefully PE is cooling off. My group retained a broker to look for buyers (including PE - I told them the moment the group agreed to sell to PE they had my notice) about a year ago and we’ve gotten no bites so far. No one who wants to buy an ortho group with about 10 doctors. The broker says the buyers are all holding back due to the current regulatory environment around PE transactions.

 

[drusso]

Hopefully PE is cooling off. My group retained a broker to look for buyers (including PE - I told them the moment the group agreed to sell to PE they had my notice) about a year ago and we’ve gotten no bites so far. No one who wants to buy an ortho group with about 10 doctors. The broker says the buyers are all holding back due to the current regulatory environment around PE transactions.

The PE's bros are PISSED that they can't control medical decision-making. That really sticks in their craw.

 

[drusso]

 

[Agast]

Every doctor knows two things

1) Private equity sucks
2) Private equity pays you a lot if you're one of the partners

Millions of dollars sound more interesting than being a good physician

@callmeanesthesia if your group couldn't find a buyer, it's probably because you don't have enough in-house ancillaries to milk

 

[manowar rules]

It's also never been easier to open your own practice. AI is completely disrupting the health care industry. I can (and do) run all core business functions from my phone — EHR, Rev Cycle, HR, Payroll, even credentialing and compliance. Whatever "business solution" you're looking for, there's an app for that.

The only thing PE is still good for is money. Which, ironically, was their original purpose. With the Feds going after the corporate practice of medicine, the days of PE-owned practices and HOPD-employed MD's are numbered.

View attachment 425264

Isn’t the real difficulty opening up your own shop in negotiating insurance contracts?

 

[mille125]

Every doctor knows two things

1) Private equity sucks
2) Private equity pays you a lot if you're one of the partners

Millions of dollars sound more interesting than being a good physician

@callmeanesthesia if your group couldn't find a buyer, it's probably because you don't have enough in-house ancillaries to milk

They are definitely still out there. I have seen 3 or 4 closings on pain practices in my state in the last few years.

The latest darling for private equity is rheumatology/neurology practices that have infusion suites.

 

[mille125]

Isn’t the real difficulty opening up your own shop in negotiating insurance contracts?

yes

 

[bedrock]

Every experienced attending doctor knows two things

1) Private equity sucks
2) Private equity pays you a lot if you're one of the partners

FIFY

My post was really just a PSA for residents, fellows, and young attendings.

 

[bedrock]

They are definitely still out there. I have seen 3 or 4 closings on pain practices in my state in the last few years.

The latest darling for private equity is rheumatology/neurology practices that have infusion suites.

It’s now becoming a big issue in the dental world as well. I saw an article just this week.

Main point is ask very specifically who owns the dental practice before you go see a private equity dentist which is more likely to push unnecessary procedures on you.

 

[cowboydoc]

It’s now becoming a big issue in the dental world as well. I saw an article just this week.

Main point is ask very specifically who owns the dental practice before you go see a private equity dentist which is more likely to push unnecessary procedures on you.

Funny, the veterinary world is experiencing the same thing…

 

[drusso]

Isn’t the real difficulty opening up your own shop in negotiating insurance contracts?

Yes, you can outsource this to an AI-enabled platform.

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linksquares.com

 

[bedrock]

Funny, the veterinary world is experiencing the same thing…

Damn,

Now people need to ask who owns a medical, dental, or vet practice before they decide which to use!

 

[mille125]

Damn,

Now people need to ask who owns a medical, dental, or vet practice before they decide which to use!

There are around 10 other pain groups near me. 40% are PE owned and two others are contemplating. 9 of the 10 have had docs who were formerly practice owners who sold to PE. 10 of 11 if you include me.

 

[bubaghanush]

What's wrong with PE-owned groups?

NPs are running the clinic and the docs in the block shop are doing stims while the PE investors make bank. Isn't this what PE does everywhere?

Let the free market sort it out if it's not efficient or quality healthcare... Docs can leave elsewhere or start their own shop, no?

 

[mille125]

What's wrong with PE-owned groups?

NPs are running the clinic and the docs in the block shop are doing stims while the PE investors make bank. Isn't this what PE does everywhere?

Let the free market sort it out if it's not efficient or quality healthcare... Docs can leave elsewhere or start their own shop, no?

The original poster posed the question of PE backed practices for a new grad. Most of us are just saying that there is not a lot of longevity in them, I think that is true. The four PE groups closest to me have lost collectively over 50 doctors in about the last 7 years. That is a lot and a lot higher than physician owned or hospital owned practices in the same area.

As far as a patient, I wouldn't chose one of these practices but as you said it is a free market. If some thinks they are getting good care, they will stay.

 

[Agast]

There are around 10 other pain groups near me. 40% are PE owned and two others are contemplating. 9 of the 10 have had docs who were formerly practice owners who sold to PE. 10 of 11 if you include me.

I’m going to start a new clinic called “Pain Doctor Near Me.” We will capture 100% of the self-referral market. Who’s in? We ride at dawn!

 

[mille125]

I’m going to start a new clinic called “Pain Doctor Near Me.” We will capture 100% of the self-referral market. Who’s in? We ride at dawn!

The question is do you want 100% of the self referrals?

 

[bubaghanush]

The original poster posed the question of PE backed practices for a new grad. Most of us are just saying that there is not a lot of longevity in them, I think that is true. The four PE groups closest to me have lost collectively over 50 doctors in about the last 7 years. That is a lot and a lot higher than physician owned or hospital owned practices in the same area.

As far as a patient, I wouldn't chose one of these practices but as you said it is a free market. If some thinks they are getting good care, they will stay.

I am in academics and try to warn fellows about PE practices but still see them walk in and leave within a couple of years.

I agree with everything said, and I support the proposed legislation to ban PE ownership of practices.

I just find it inconsistent for those who complain about PE practices yet at the same time claim to be free market purists and anti-government regulation. PE is doing exactly what they always do in any industry - squeezing the profit as best they can.

 

[mille125]

I am in academics and try to warn fellows about PE practices but still see them walk in and leave within a couple of years.

I agree with everything said, and I support the proposed legislation to ban PE ownership of practices.

I just find it inconsistent for those who complain about PE practices yet at the same time claim to be free market purists and anti-government regulation. PE is doing exactly what they always do in any industry - squeezing the profit as best they can.

Healthcare is the most regulated industry in the country and it is definitely not a free market.

You could argue however is PE more of a bogeyman than hospitals. I could see arguments on both sides of that question.

 

[callmeanesthesia]

I haven’t worked for a big hospital system but I’ve considered several. How good the system is seems directly proportional to the amount of actual physician leadership. Kaiser and Sutter both have extensive physician leadership, whereas Providence, Dignity Health, and Adventist all seem to have foundation model medical groups that are independent in name only and actually run by hospital bureaucrats.

This strongly implies that we would all be better off with a more robust ban on corporate practice of medicine, hopefully one that doesn’t exempt non-profits.

 

[Agast]

The question is do you want 100% of the self referrals?

That's the wave of the future. No one goes to their PCP looking for a referral unless their insurance compels it. Any service I need, I hop on google first.

 

[mille125]

I haven’t worked for a big hospital system but I’ve considered several. How good the system is seems directly proportional to the amount of actual physician leadership. Kaiser and Sutter both have extensive physician leadership, whereas Providence, Dignity Health, and Adventist all seem to have foundation model medical groups that are independent in name only and actually run by hospital bureaucrats.

This strongly implies that we would all be better off with a more robust ban on corporate practice of medicine, hopefully one that doesn’t exempt non-profits.

I dont disagree

 

[mille125]

That's the wave of the future. No one goes to their PCP looking for a referral unless their insurance compels it. Any service I need, I hop on google first.

More true for sure but still greater than 60-70 percent of my new patients are referrals.

Despite the changing world I don't think this will fall below 50%.

 

[mille125]

More true for sure but still greater than 60-70 percent of my new patients are referrals.

Despite the changing world I don't think this will fall below 50%. but I could be wrong.

 

[drusso]

What's wrong with PE-owned groups?

NPs are running the clinic and the docs in the block shop are doing stims while the PE investors make bank. Isn't this what PE does everywhere?

Let the free market sort it out if it's not efficient or quality healthcare... Docs can leave elsewhere or start their own shop, no?

PE groups are now banned in some states because of corporate practices in medicine.

Under new management? Not so fast: Federal CPOM bill targets MSO structures, ‘friendly physician’ model

The federal corporate practice of medicine bill would restrict MSOs and void non-competes. See what H.R. 10444 means for PE and telehealth companies.

www.mcdermottlaw.com

 

[mille125]

PE groups are now banned in some states because of corporate practices in medicine.

Under new management? Not so fast: Federal CPOM bill targets MSO structures, ‘friendly physician’ model

The federal corporate practice of medicine bill would restrict MSOs and void non-competes. See what H.R. 10444 means for PE and telehealth companies.

www.mcdermottlaw.com

We will see if it passes.

 

[drusso]

We will see if it passes.

Do you know who is opposing it and on what principled grounds?

 

[mille125]

Do you know who is opposing it and on what principled grounds?

I dont think anyone is coming out opposing it that I have heard but as dysfunctional as this Congress is......who knows.

Given that it has no Republican sponsors that I could see and the Congressional session ends in Jan 2027, I would give its chances as unlikely.

 

[callmeanesthesia]

I dont think anyone is coming out opposing it that I have heard but as dysfunctional as this Congress is......who knows.

Given that it has no Republican sponsors that I could see and the Congressional session ends in Jan 2027, I would give its chances as unlikely.

Unfortunately yes, the bill is probably doomed due to lack of bipartisan support

 

[mille125]

Unfortunately yes, the bill is probably doomed due to lack of bipartisan support

Yes but there are already several states looking to make similar changes. That is probably the most pressing risk to PE and hospital owned groups.

 

[DrSpine]

No competent physician should ever join a PE group. If you're in a group and got dropped the news about PE acquisition, immediately begin steps for plan B the very next morning. Simultaneously, refuse any new handcuffs, and if you present any pre-existing value to the company, leverage it in the best way possible. It's fairly simple when you realize that you, the Physician, represent the core value/nucleus of the PE investment, and without you, such an investment cannot succeed/maximize its EBITDA potential. They're lucky to have you, not the other way around. Dictate your terms, refuse any handcuffs. Worst thing that happens is you leave, and believe me, it's likely going to happen anyway.

 

[drusso]

Some of the pain KOLs with PE ties are organizing a response around this topic.

 

[mille125]

Some of the pain KOLs with PE ties are organizing a response around this topic.

A response to the proposed legislation or something else?

 

[DrSpine]

Some of the pain KOLs with PE ties are organizing a response around this topic.

Not much of a KOL imo if you work for PE. Tells me you’re utterly clueless about money and financials. Let me guess, they just want to “focus on the medicine” and leave the “business side to the business people” ? Also what’s the point of being a KOL and doing all these advanced procedures if you’re not keeping the revenue or facility fee for yourself? Becoming a stim expert to enrich someone else’s pocket is certainly a unique “KOL” approach.

 

[Ducttape]

these are probably KOLs who actually are actual owners of the PE organization.

https://www.congress.gov/119/bills/hr10444/BILLS-119hr10444ih.pdf

(this site is more clearly written but took a long time to load):

https://www.govtrack.us/congress/bills/119/hr10444/text

Do you know who is opposing it and on what principled grounds?

interesting you wonder who opposes this bill and on what principled grounds rather than who is supporting it - 15 democrat cosponsors.

 

[bedrock]

This is where I disagree with republicans.

I think large for profit corporations should not be allowed to buy 1- single family homes, 2- medical practices, 3- dental practices, 4- vet practices.

They always deliver worse care for more cost and push inappropriate procedures/expenses due to pressure from their PE overlords....and keep young families out of homes, and drive up the cost of housing for everyone.

 

[Ducttape]

This is where I disagree with republicans.

I think large for profit corporations should not be allowed to buy 1- single family homes, 2- medical practices, 3- dental practices, 4- vet practices.

They always deliver worse care for more cost and push inappropriate procedures/expenses due to pressure from their PE overlords....and keep young families out of homes, and drive up the cost of housing for everyone.

but thats capitalism, right?

 

[bedrock]

but thats capitalism, right?

captitalism isn't perfect but its a hell of a lot of better than socialism. Again, no country under true socialism has every prospered long term in the history of the world.

Reminds me of a quote from Winston Churchill

"Democracy is the worst form of government—except for all the others that have been tried"


I would add my personal quote of

"Capitalism is the worst economic system---except for all the others that have been tried"

Bedrock

 

[DrSpine]

Democrats are finally doing something when it comes to PE in Medicine, but Democrats and their Obamacare is also the reason why Medicine is in the situation today with vertical and horizontal integration, and rise of hospital systems and PE roll ups.

They laid the foundations for it. So it’s a step in the right direction but I won’t give them any credit for fixing the damage they caused. It’s the very minimum they can do.

Elizabeth Warren, whose genetic background is questionable, has for once done something that is not questionable.

 

[Ducttape]

so you are admitting that capitalism requires social restraints.


guess who advocates for that?

social democrats


part of the american left you so vehemently disparage and want to label as wanting socialism.

look at the cosponsors of that bill.
hoyle
ocasio-cortez
tlaib
subramanyan


i dont see the senate version online, but it was cosponsored by
warren
merkley
wyden
(the last 2 should be very familiar to drusso)

 

[DrSpine]

these are probably KOLs who actually are actual owners of the PE organization.

https://www.congress.gov/119/bills/hr10444/BILLS-119hr10444ih.pdf

(this site is more clearly written but took a long time to load):

https://www.govtrack.us/congress/bills/119/hr10444/text

interesting you wonder who opposes this bill and on what principled grounds rather than who is supporting it - 15 democrat cosponsors.

The only ones that might put out statements in favor of it are those who sold their practice to one and had a liquidity event, and now have rolled in some of their money into the new structure. In that case, absolutely, they have a vested interest in pushing for PE in medicine because they are likely depending on their recap to grow (and also not lose) the remaining portion of their sale proceeds.

 

[SSdoc33]

The only ones that might put out statements in favor of it are those who sold their practice to one and had a liquidity event, and now have rolled in some of their money into the new structure. In that case, absolutely, they have a vested interest in pushing for PE in medicine because they are likely depending on their recap to grow (and also not lose) the remaining portion of their sale proceeds.

from what ive seen, the docs who sell to PE usually become handsomely paid indentured servants for a specified time period afterwards. with a big penalty if they leave or other fine print. sounds like a crap deal. why would PE be able to do things better or make more money than a well run PP? and if its not well run, why would PE be interested? this isnt like a venture capitalism where you need extra start up money up front. like for equipment or R&D

 

[DrSpine]

from what ive seen, the docs who sell to PE usually become handsomely paid indentured servants for a specified time period afterwards. with a big penalty if they leave or other fine print. sounds like a crap deal. why would PE be able to do things better or make more money than a well run PP? and if its not well run, why would PE be interested? this isnt like a venture capitalism where you need extra start up money up front. like for equipment or R&D

If you’re old, the initial liquidity event is a great way to close out the career and cash in the remaining money. If you’re younger, it can be life changing as well, but you’re also giving up future earnings for more immediate up front cash. The problem is the amount that rolls over is stuck depending on a recap which may not even pan out. Still, if you’re an original owner, good for you. If you’re not one of the original owners, and you choose to willingly stay with the transition or join these practices, and accept their handcuffs including worthless incentive share profits, you’re essentially throwing your own future away and enriching someone else while making yourself an indentured servant.

 

[bedrock]

If you’re old, the initial liquidity event is a great way to close out the career and cash in the remaining money. If you’re younger, it can be life changing as well, but you’re also giving up future earnings for more immediate up front cash. The problem is the amount that rolls over is stuck depending on a recap which may not even pan out. Still, if you’re an original owner, good for you. If you’re not one of the original owners, and you choose to willingly stay with the transition or join these practices, and accept their handcuffs including worthless incentive share profits, you’re essentially throwing your own future away and enriching someone else while making yourself an indentured servant.

Agree. The only physicians who really benefit from PE are older physician practice owners who can retire 10 years ahead of schedule.
No other physician truly benefits from PE, and no staff member or patient benefits from PE owning medical/dental/vet practices.

 

[callmeanesthesia]

Democrats are finally doing something when it comes to PE in Medicine, but Democrats and their Obamacare is also the reason why Medicine is in the situation today with vertical and horizontal integration, and rise of hospital systems and PE roll ups.

They laid the foundations for it. So it’s a step in the right direction but I won’t give them any credit for fixing the damage they caused. It’s the very minimum they can do.

Elizabeth Warren, whose genetic background is questionable, has for once done something that is not questionable.

Can we please stop blaming Obamacare for this? Healthcare costs have been exponentially increasing since we’ve been collecting data.

 

[DrSpine]

For Obamacare to succeed, it required vertical and horizontal integration of healthcare practices. It was literally made illegal also for Physicians to own hospitals, but no problem with PE or MBAs. The measures implemented overhead and changes that crippled independent practices over time, with only deep pockets willing to absorb the changes and costs. So yes, we should blame Obamacare.