Private equity snaps up disability services, challenging regulators

I'm not going to defend private equity, but the article mentions only bad outcomes for services owned by private equity. To get a more complete picture, they should probably also see if there are problems with companies that aren't owned by private equity funds. And then look to see what the positive outcomes associated with both private equity owned and non-private equity owned.

Which is to say... these are anecdotes that warrant further investigation, but then ensure effort is required only for equity fund owned services by looking at the whole picture. If there are industry-wide problems and you focus your effort on private equity fund owned services and companies, you might miss an opportunity to improve the entire industry.

That being said... PE funds have a bad reputation for a reason. I would be surprised to find they're not the worst offenders.

The consolidation is a big story and problem regardless of the type of parent company.

I am personally aware of at least one company which was bought up by private equity in the last 5 years, which has remained very much the same since. It hasn't taken on debt, it hasn't been parted out, it hasn't started optimizing for profit and reducing worker benefits.

The new owners seem content to simply sit back and collect the profits of the company that were previously going to the family that owned the company before.

That is to say, in greater than zero instances, PE has the capacity to be benign.

I think the median PE firm is far worse than the median non-PE firm, but there exist outliers in both groups.

Were you invoking Deus Ex when you said consolidation ? Because that's what I immediately thought of.

> To get a more complete picture, they should probably also see if there are problems with companies that aren't owned by private equity funds

There's also the problem of adverse selection. A subset of private equity is focused on buying distressed assets, so just because 50% of PE owned companies go under, doesn't necessarily mean they're bad.

Sure, but we're talking about health care here. It's not Red Lobster or some failing brick & mortar store. I know health care in general is treated like a business, but it really shouldn't be.

I don't care if Red Lobster dies, but I do care about the already stressed disability services dying. Basically, the weighting is (or at least should be) different.

Damn