[sueders101]

The value add is an enthusiastic pursuit of profit. Ownership by a collection of doctors drives lower margins/profits than ownership by a private equity firm. Economies of scale can also help, but that’s not the driving reason behind PE acquisitions. There’s a degree of good faith/naïveté when medical providers and pharmacies bill insurance providers. PE firms can leverage this expectation and push for increased costs with little, if any, additional overhead.

[bradleyjg]

A kind of commitment device so that doctors can ensure their fellow doctors will act unethically without having to do the enforcement themselves.