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182 points tencentshill | 6 comments | | HN request time: 0.95s | source | bottom
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JumpCrisscross ◴[] No.45065373[source]
Healthcare, especially the patient-facing part, isn’t like other services.

If we want private ownership of this infrastructure it has to look more like either a utility, where the state has a direct say in service changes and pricing, or a partnership, where unlimited liability flows through to the owners. I’m a fan of the latter.

Limited liability was an amazing invention. But it’s not appropriate for healthcare. Turn these services into partnerships and you’ll see the give-a-shit factor quintuple overnight. (You’ll also probably see a reduction in leverage.)

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1. bko ◴[] No.45066408[source]
> Limited liability was an amazing invention. But it’s not appropriate for healthcare.

If you want to make these services more expensive and produce shortages, this is how you would do it. Why would anyone invest or want to work in these fields?

I have an unpopular take on PE taking over these small businesses after working with a few small businesses in the home improvement space. The fact is they are incredibly inefficient. You can't even get these guys to answer a phone. They bill you by mail weeks after and you call them to give them a credit card over the phone after you received your bill. Even getting estimates could take months. The service is not consistent. Depending on who they send, they could be completely clueless. You don't know until you finally stumble across someone competent that tells you how bad the last guy was.

Pricing is all over the places. You can get two quotes that are 50% different. So there is little discovery. These are only the obvious external inefficiencies. I couldn't imagine how bad it is operationally.

The bar is so low, which is prob why it's interesting for a PE firm. There is so much money being left on the table. That's why I generally prefer large chains for things like auto. You know the pricing. They are efficient and won't rip your face off for the most part. So I welcome more professionalism and corporate ownership if this means a better, more consistent level of service for me. I get there are downsides but right now I have enough trouble getting a hold of any of these guys that I just don't care.

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2. triceratops ◴[] No.45066479[source]
> Why would anyone invest or want to work in these fields?

That's how individual doctor's practices already work. If someone doesn't want to take liability for patient outcomes, good riddance.

3. azinman2 ◴[] No.45066622[source]
You’re making the assumption (from what I understand) that most of the inefficiency is in the administration side. I’m sure there is, but it’s also woefully complicated with insurance, laws, parties who may or may not be financially and cognitively sound, etc.

But let’s say you can make the administration side way more efficient. How much did that save? 20%? That’s not the kinds of returns being sought. So where does the 2x, 3x, or more returns expected come from? Cutting services.

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4. nickff ◴[] No.45066840[source]
I think you hit the nail on the head when you mention the complexities of the business being the cause for the inefficiencies. Private Equity has figured out that they can buy into businesses with high legal, regulatory, and 'friction'-related barriers to entries, and squeeze the clients (either by increasing prices or decreasing service level/quality). The solution would be to make entry into these businesses easier by reducing legal and regulatory barriers, but that seems vanishingly unlikely.
5. bko ◴[] No.45069271[source]
Forget efficiency. I want someone to pick up my phone call and pay my bill online. These guys leave a ton of money on the table. They can also better compete when the other guys are clowns
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6. ethanwillis ◴[] No.45069747{3}[source]
If it's so much money being left on the table, have you thought about picking some of it up?

What would that look like?