The Big Medical Short
Remember the financial crisis of 2008? I am not going to explain it in detail but it had to do with investors (Private Equity) and mortgages:
In the early and mid-2000s, high-risk mortgages became available from lenders who funded mortgages by repackaging them into pools that were sold to investors.
For more info about this see this link.
Why am I mentioning this here? I guess because of this article:
Half of private equity-owned physician practices are resold within 3 years
I just find this repackaging and selling very interesting. I am NOT saying I know enough about the finance industry to say this is the same thing as 2008.
Between 2016 and 2020, 807 physician practices in the three specialties were acquired by private equity firms. Just over half (51.6 percent) of these practices experienced an exit of the original private equity investor in which some or all assets were sold to a secondary buyer
When private equity firms acquire physician practices or other healthcare organizations, the intended end goal is to sell the entity so investors can see a return on investment. Investors generally expect to see returns within three to eight years, making exits a natural part of the private equity cycle.
What the hell does this have to do with Direct Primary Care? Well, I think a lot. For one, think about those corporations (DINOs) trying to be DPC. They invest a ton in them (millions into clinics) for style over substance and try to sell to a bigger DINO in a few years. Or, they will be trying to buy YOUR DPC practice and promise the world and then sell it within a few years.
The other way to look at this is that buying private practices is a losing proposition. They are trashing the already terrible healthcare system we have. Walgreens and Walmart are losing tons of money on primary care. They are burning it all to the ground with DPC being the shining beacon left.
To sum up, the Big Medical Short is a coming storm where private equity tries to buy up medical practices, replaces doctors with non-doctors, and finally crashes the whole thing. It’s like the insanity where apes take over the world in Planet of the Apes only for Charlton Heston’s character to realize we did it to ourselves.
Our only hope is the small, individually owned Direct Primary Care practices that keep the system going.
That’s my thoughts. What do you think?
(Yes, I know I combined two movies here but it is what it is).
Meanwhile, the AAFP does their “Hear no evil, see no evil, speak no evil” schtick.
They are too busy with DEI…