Private equity in healthcare is like a glass of milk that has been left out overnight. It looks fine from a distance, but if you drink it you will get sick.
With decreasing reimbursements and increasing overhead requirements needed to bill insurance, private practices are getting squeezed. The days of solo practice and small practices are all but gone. Physicians keep banding together to try and dilute the overhead so they can remain in charge of their own practice.
Even very large practices are facing trouble. Of course one of the local hospital systems would love to own them. A lot of physicians desperately do not want to sell to the hospital system that has been harassing them for years at a time.
The days of solo practice and small practices are all but gone. Physicians keep banding together to try and dilute the overhead so they can remain in charge of their own practice. Click To Tweet
Enter private equity. The promise that “You can keep your practice exactly the same, we will just own it”. Private equity in other areas is known for changing business by squeezing the dollars out. Physicians tend to take people at their face value, so when PE tells them that they won’t change their practice, they believe them.
Fast forward a few years to a very different story, when PE does what PE does, and starts squeezing dollars out. This makes for a very unhappy physician.
If you are looking to get out of medicine and want to cash out, then fine. But if you are planning on working still, PE will lead to wealth and misery. Wealth only accounts for so much when you are miserable.