I think this a debt issue. Practices probably don’t lose money.
No different than when 21C did the same thing and GenesisCare took over
Probably same docs, only thing that changes is the slumlord
Bro, hopefully you’re charging more than $300/hour for those. #750orGTFOBoo hoo. You buy a bloated underperforming asset in a difficult operating envirnoment with significant reimbursement headwinds and...
Just know that while the little people (doctors/nurses/staff) will get salary cuts, loss of any stock options etc. remember that the CEO and his C-buddies got paid to run it into the ground, so don't worry, their yacht and 3rd home are not impacted whatsoever. Whew.
ps. Some of their docs were earning 1M plus. Ok. But only as W2. And they did some funny "regional director" hiring that was unkosher - hard pass. Now look. Karma: its not just chickens that roost.
pss. don't worry, I got mine. I did one of those "expert opinion" calls.. they paid me 300$ to ask my opinion (by an anonymous PE firm client) about whether to buy 21C out of debt. I told them I'd write the check myself, but only if I could have operational control... lol..
20 min phone call. $900/hr telephone rate or GTFO
“Sluggish recovery in patient volumes”
I mean sure… but the exploding cost of credit is likely the main culprit in this case
Hypo-fractionation is too. ASTRO asleep at the wheel for payment reform for years while it happened
True, and their debt load. Nevertheless, over the past 10 years, profit and patients are being funneled to the large systems.
The revenue needs to be multiples higher than servicing the debt payments, for any business.
21c was basically farked after over they overpaid for the oncure acquisition during the great housing bubble imo. Basically payment cuts and hypofx/SBRT exploded the decade after that. So they paid too much for an asset (lots of centers with old ass equipment) and had to put in capital during a time where fractions/reimbursement kept going down Wasn't priced in their acquisition I'm sure. Probably propagated by GC when they took over.
They and subsequent capital infusers bought high and now have to sell low. Too bad they didn’t constantly read SDN through the years and thus didn’t have a fulsome knowledge of the US rad onc marketplace.21c was basically farked after over they overpaid for the oncure acquisition during the great housing bubble imo. Basically payment cuts and hypofx/SBRT exploded the decade after that. So they paid too much for an asset (lots of centers with old ass equipment) and had to put in capital during a time where fractions/reimbursement kept going down Wasn't priced in their acquisition I'm sure. Probably propagated by GC when they took over.
Oncure Medical has been acquired by 21st Century Oncology
www.mppartnersllc.com
This probably has some relevant stuff if anyone can get access:
I think @madchemist89 is on to it. Floating rate debt. Killing a lot of real estate syndicates too. Hopefully no one invested in the bad ones recently. The reimbursement climate and fractionation isn't helping either though
www.wsj.com
GL doesn't pay much above that rate and if you are getting 900/hr for your opinion.. Good for you.
I think 500-600 is reasonable/realistic for those kind of calls per hour. Shot the breeze with a hydrogel knockoff vendor and got $500 for 55 mins.
You can request to go higher.
Not the full story. They’re busier than you and I! But they’re not as busy as they used to be (“patient-fractions,” a unit like man-hours), and due to a series of unfortunate events… and poor decisions… had such thin margins that slight revenue downturns were not absorbable.
Don’t forget a bunch of lawsuits!
Without meaningful regulation, markets consolidate. Existing bankruptcy laws typically protect the rich and bankruptcy itself may be a strategy to protect against lawsuits. (See Purdue Pharma).
I get the sense that the founders of 21C were able to take a f-load of money out of the company and saddled it with huge debt from expansion. They paid something like a 100 million just for south florida oncology practices alone. Company would be fine if someone takes on their debt at .10/dollar
This is happening all over the place. Businesses that took on a lot of debt when borrowing was essentially free, are now really stressed in a higher interest rate environment. The winners and losers will get sorted out pretty quick.
Did you up the rate? SDN bros gotta stick together.
21co founders basically went into business to compete against them in FL several years ago (advocate radiation oncology).
www.modernhealthcare.com
Language for widgets (us). Don't let your kids go into finance or corporate consulting (fashionable fields for those with elite degrees).
Yeah, they don't. I don't think this what "materially incentivize" means for KKR.
1+1=3
Think about the absurdity of this.
