[vault_]

> A doctor knows what his practice is worth and wants every cent he can get out of it - but the next generation of doctor is not going to be able to compete with debt financing what a PE cash-buyer can get.

In my opinion, the physician in this example is a monster. Profit maximization is a choice, not some kind of moral imperative. Am I supposed to have any respect for somebody selling out their employees and patients to vampires so they can retire to a beach or whatever?

The solution I'd want to see for situations like this is to find a way to sell to the people who have a continuing interest in how the business is run: employees and customers. The "exit" that does right by all interested parties would be something like having a newly formed employee coop gradually buy out the founder's ownership stake. To make a tech analogy, you don't have to sell your 0-day to foreign government just because they pay more than the bug bounty program! You don't have to sell out your community to vampires because they're the highest bidders! This is a choice that somebody is making.

[BeetleB]

> In my opinion, the physician in this example is a monster. Profit maximization is a choice, not some kind of moral imperative.

They've had a career of treating patients. I think they've satisfied the moral imperative already. And selling to PE doesn't necessarily equate to "profit maximization". It could just mean "decent sale". As the OP said, often there simply isn't anyone available to buy it out at the timeline it needs to be bought out.

> The solution I'd want to see for situations like this is to find a way to sell to the people who have a continuing interest in how the business is run: employees and customers. The "exit" that does right by all interested parties would be something like having a newly formed employee coop gradually buy out the founder's ownership stake.

I don't doubt that this can work (it has for other businesses!). However, a given doctor wants to retire soon. Can you point him to a concrete plan to set this up? As in a firm that will have said plan ready, does all the legal work, and manages the terms with the existing employees/customers? The doctor already has his hands full treating patients and running the business.

If you cannot point him to such a resource, then do you see why he'd just sell to PE?

[derbOac]

> They've had a career of treating patients. I think they've satisfied the moral imperative already.

No offense (really), but speaking from professional experience, I think this is naive and contributing to a lot of reasons why healthcare costs have started to spiral out of control. There are moral doctors, and immoral ones, and everything in between.

I'm not really sure why healthcare provision as an economic transaction is necessarily more moral than any other economic transaction that brings net benefit to the receiver of the service.

If there was such a cost to the physician overall, in terms of altruistic cost-benefit balances, they'd have trouble finding people wanting to go to medical school. I think the labor markets (in terms of medical school supply and demand) speak to the nature of that balance.

I don't want to demonize doctors (my family and myself fall into these categories) but I think it's dangerous to idolize them at the same time.

[stubybubs]

Also from experience, I think it's Baumol's cost disease really starting to show. Wages/practice costs for doctors have increased because everything around them is more expensive.

A family doctor in my hometown used to be able to afford a house in the nicest neighbourhood on their earnings. They didn't have to talk about money, and when they sold their practice they were happy to make sure it went into the right hands and sold it for a reasonable amount of money.

These days a family doctor can get a 2 bed condo or a townhouse near their practice, or they can have a long commute with something larger. After paying for office expenses, childcare (which also suffers from Baumol's cost disease) and their more expensive education, there's far less for retirement. You really have to maximize what you get out of your practice when you sell it.

I know there's a long history of it being "a calling" and expecting sacrifice. That's still expected, and yet the same rewards aren't there as in the past. Nobody in the past looked like a greedy asshole because they didn't have to ask for more money or really worry about anything. It was set up your practice and live your life on autopilot.

[P_I_Staker]

I want to demonize doctors.

[JumpCrisscross]

> Am I supposed to have any respect for somebody selling out their employees and patients to vampires so they can retire to a beach

Nobody else will buy it. The alternatives are shutting down the practice or forcing oneself to keep working. Particularly in medicine, the latter is dangerous.

> solution I'd want to see for situations like this is to find a way to sell to the people who have a continuing interest in how the business is run

Sounds like a buy-out strategy! Seriously. Berkshire Hathaway could negotiate good deal terms by making this promise.

[pitaj]

> Nobody else will buy it. The alternatives are shutting down the practice or forcing oneself to keep working. Particularly in medicine, the latter is dangerous.

Can't you just hire a "CEO" who will take over all management responsibilities?

[JumpCrisscross]

> Can't you just hire a "CEO" who will take over all management responsibilities

You, the retiring doctor, hire a manager whose job it is to hire another doctor? Do you not see why this works at scale but for one practice?

[legitster]

Well, keep in mind that from the perspective of the rest of the healthcare industry, private practices are kind of dinosaurs at this point. They don't play well in our modern system, and the last 50 years of healthcare legislation has done everything short of outright banning them.

New doctors are not trained or expected to run businesses. Getting money from medicare or insurance is a nightmare. Patients want access to more services than ever before. The entire idea of a private practice is anathema to modern ideas of healthcare oversight and access equity. Even getting private malpractice insurance is almost impossible now.

There is a reason almost nobody is starting private practices anymore. So to give the doctors a bit of credit this is a chance to slip quietly into the night.

[JohnFen]

This explains quite a lot about why health care has been noticeably getting worse over the last several years -- for everybody.

In my part of the US, you can't even find a doctor that is taking new patients at all, private practice or otherwise. Talking with some doctors, it's clear that being a doctor these days is a very undesirable job. I know I wouldn't want to do it.

[tomaskafka]

The system and incentives the US voters have set up says "we want you to sell to the vampires, and will give you a huge financial bonus if you do".

Maybe if voters didn't want such system, they might vote different people into power, or vote to change the system.

POSIWID. https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...