That would have to come with some liability reform however. Injury lawyers are another cancer on society along with many practices of Private Equity.

When you take care of sick or disabled people, bad outcomes, even death, can come along with that. Nobody in their right mind is going to form a health care partnership with unlimited personal exposure to liability unless that is strictly limited to actual losses in cases of proven negligence.

I agree, there should be no limited liability for for-profit healthcare organizations.

And non-profit health care orgs should have strict regulation, and the state should appoint some of the members of the board.

> 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.

I would think unlimited liability would only work to increase prices as it would mean providers would become more laden with lawyers, even more bureaucratized and slow (spend most of your time documenting everything so we don't lose lawsuits), etc.

Those already seems like drivers of cost in hospitals. I have several family members who work in healthcare who are just miserable because so much of their time is consumed by things that are not helping and healing patients (documentation, etc.)

I don't understand how either of your proposed angles of reform are supposed to work.

These are services being paid by the state, so I would think the state already has direct say in pricing? Which is why the business becomes a march to the bottom in provided services, to increase margins by decreasing expenses since they can't increase prices.

I didn't see any mention of bankruptcy in the article, so I don't see what limited liability has to do here. If anything it seems like the entities are too well capitalized, in that they can fight with individual states and pay off whatever meager fines might result. Also as far as I understand the medical industry, the individual doctors/nurses signing off on the care being given are still directly liable (modulo professional insurance policies). They just have reams of paperwork saying the care was correct from their perspective, despite what the low level caregivers might be doing outside of the paperwork.

I personally think what limited liability entities have developed into has become a scourge in general, as they end up being considered to have all the rights and freedoms of personally-liable natural persons. Getting a government granted liability shield should mean submitting to significantly more regulation to preclude engaging in well known patterns of constructive negligence. The vaunted fiercely-independent "man in the arena" can always actually get into the arena if they want their business to partake of the full natural rights afforded to natural persons...

And maybe you're just coming from a similar feeling of wanting those ultimately in charge to also be directly responsible? I usually think of this in terms of corpos fighting regulation with specious justifications based on individual rights (Citizens United, corpo direction of employee speech, etc). I just don't see how adding the liability would make anything more actionable here.

limited liability has been a disaster for the entire human race.

My hat's off to you. That's often difficult, underpaid and important work.

Can you give us some examples on how they would play fast and loose with some regulations?

> 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.

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.

> destroying all the inherent value

Not all is destroyed. Some of the value is diverted to PE wallets. Setting 900k of someone else's value on fire in order to set up a updraft to push 100k into your pocket is a sweet, profitable deal for you.

and pumping up costs

Mostly? PE's original sin is being carpetbagger capitalism, exclusively focused on short-term profit. Without even the usual "Evil Corp" veneers of domain expertise, or emotional attachment to the underlying business and community.

The fact that it’s private equity is mostly a red herring.

The problem is the rules can be broken with minimal consequence. Swap out PE for another profit-seeking structure and you’ll tend towards the same outcome, as the bad outcompetes the good.

Just about all of them.

Feels like it would be easier to count the ills that _don't_ go back to this sort of thing.

> returned to creditors/customers/employees

I appreciate the sentiment, however it should really be clarified, for the purposes of productive dialogue, that employees and customers do not own a business. Businesses are for-profit and have a balance sheet just like everyone else, and creditors and minority shareholders have a responsibility in the ecosystem.

A creditor has a due-diligence obligation to determine credit worthiness, and a recent change in ownership could be part of that. Noone forces a creditor to give a loan.

In any non-public share ownership of a company, the shareholder has agency to manage their holdings in the company, and if they are bearish, they should sell.

Now the real grift is PE use of regulatory capture of a consumer. Consumers do not have much choice in the world of healthcare/hospice care.

In that sense, the government has the power of the pen to adjust the law.

I dont find any value in echoing a false entitlement to customers amd employees.

> at least it's not ultimate profiteering by default.

Unfortunately, voting is a terrible hiring plan to get competency in a highly complex often opaque environment.

I am currently lost as to what the right structure should be. It certainly is an interesting (and pressing) problem.

I've often wondered at what point toying with healthcare at a large enough scale becomes eugenics with extra steps.

PE is profiting off regulatory barriers to entry in situations like this; it has little to do with who the clients are. The way to solve this is to lower regulatory barriers to entry, which will make these industries more competitive and less appealing to PE.

No. Private equity means investors who buy equity in non-public companies. That's it. (It used to imply leverage, but that distinction has blurred away.)

In popular discourse it's close to a meaningless term.

Search Kagi for 1980s leveraged buyout and/or corporate raiders to get a start understanding how PE operate. Then realize that they have since optimized (profits must go up) upon that model of extraction at all costs for almost 40 years, and rebranded as PE for optics.

In 1980s Reagan/Yuppie/money obsessed America these guys were considered scum. In 2025 'the line must go up' America they are everywhere and considered 'you just have to accept them as part of capitalism' (even though 1980s Reagan America rejected them.)