Private Equity Acquisition of Oncology Clinics in the US

[Chartreuse Wombat]

Private Equity Acquisition of Oncology Clinics in the US

This cross-sectional study examines private equity–backed acquisitions of medical and radiation oncology clinics in the US from 2003 to 2022 using financial databases and publicly available data.

jamanetwork.com

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[Fpg1245]

Private Equity Acquisition of Oncology Clinics in the US

This cross-sectional study examines private equity–backed acquisitions of medical and radiation oncology clinics in the US from 2003 to 2022 using financial databases and publicly available data.

jamanetwork.com

They’re getting chased out of anesthesia and radiology. So naturally this is their next target.

See their experience for guidance.

 

[BobbyHeenan]

We will see how this goes without a zero interest rate environment.

They (PE) have done pretty well in dentistry, optho, and derm. I know a number of those types of docs that hav either made a killing (older partners) or have been absolutely hosed (early partner or employee on partner track) when a practice sold to PE.

The model is changing though, so it may not stick.

 

[sirspamalot]

FYPM is the only model to live by. Not tomorrow, not next week... TODAY. Good will ain't shyte when it comes to providing labor services.

#

PE can, in the great words of Duke Nukem..

 

[grenz]

We will see how this goes without a zero interest rate environment.

They (PE) have done pretty well in dentistry, optho, and derm. I know a number of those types of docs that hav either made a killing (older partners) or have been absolutely hosed (early partner or employee on partner track) when a practice sold to PE.

The model is changing though, so it may not stick.

How does an early partner get hosed? Assuming they have equal ownership, wouldn’t they get the same payout as a senior partner?

 

[BobbyHeenan]

How does an early partner get hosed? Assuming they have equal ownership, wouldn’t they get the same payout as a senior partner?

Assuming equal partner yes. I probably worded that poorly.

I knew of one derm who was a "partner" in some regards (I think on voting and clinical duties but not in terms of ownership) but didn't have their full sweat equity in. She was absolutely hosed.

You can still get hosed though even if you get a nice bag at the sale. A one time payment is great, but if your yearly salary then takes a nose dive because they opt to pay you less (or try to replace you with a PA in a few years like derm sometimes does) then you can still get hosed in the long run.

 

[Fpg1245]

If PE oncology takes off, the biggest Medicare fraud scheme has yet to be committed.

 

[grenz]

Assuming equal partner yes. I probably worded that poorly.

I knew of one derm who was a "partner" in some regards (I think on voting and clinical duties but not in terms of ownership) but didn't have their full sweat equity in. She was absolutely hosed.

You can still get hosed though even if you get a nice bag at the sale. A one time payment is great, but if your yearly salary then takes a nose dive because they opt to pay you less (or try to replace you with a PA in a few years like derm sometimes does) then you can still get hosed in the long run.

Yea I see what you mean now. Senior partner gets a big payout right before retirement. Younger partner gets the same big payout but reduced salary and potentially bigger workload the rest of their career.

 

[BobbyHeenan]

Yea I see what you mean now. Senior partner gets a big payout right before retirement. Younger partner gets the same big payout but reduced salary and potentially bigger workload the rest of their career.

Exactly....and loss of control of working conditions, hiring/firing, etc.

Lots of times as part of the sale you have to agree to stay on and work X number of years for the PE firm too. Other times you can leave (with probably a non compete so you're literally leaving town then).

There are lots of different ways it can be structured. But in general, someone about to retire is getting the best deal here.

 

[DebtRising]

PE has allowed the boomers in other fields to hose subsequent physicians who followed in their footsteps almost as much as rad onc. Truly a bastion of “we had our cake and will eat it to” generation. Whole genres of opportunity available to the previous generation sold out at the end of careers already better than many will dream of today. It’s so sad to be part of such a society

 

[NotMattSpraker]

PE has allowed the boomers in other fields to hose subsequent physicians who followed in their footsteps almost as much as rad onc. Truly a bastion of “we had our cake and will eat it to” generation. Whole genres of opportunity available to the previous generation sold out at the end of careers already better than many will dream of today. It’s so sad to be part of such a society

Lol "almost as much"

One of the concerns of private equity in emergency medicine has been them ramping up training to flood the labor market and lower physician salaries. I swear I've read about that once before in Rad Onc...

 

[Fpg1245]

Lol "almost as much"

One of the concerns of private equity in emergency medicine has been them ramping up training to flood the labor market and lower physician salaries. I swear I've read about that once before in Rad Onc...

This certainly isn’t unique to PE. HCA is doing this all on its own.