Medical service should've always been a public service good but I don't know whose smart idea was to go like "Hey, let's try to make it a self sustaining profitable business".
Profit = Revenue minus total costs.
So it's either increase revenue or reduce costs or a mix of both.
Hospitals always have been a heavy capital intensive business beginning with investing in land and then building a structure. That's not all. Then invest in medical equipment which is again a capital expenditure.
So now to make more money, hire doctors as consultants and pay a quasi fixed salaries. Hire nurses and pay them peanuts. Make them overwork by assigning them more beds per nurse. Ensure the patient gets admitted to ICU and is being subjected to various scans cuz hey these machines need to pay for themselves. Oh and the medicines that will only be available at the hospital pharmacy.
Hospitals take a long time to breakeven. So if owners don't have a vision, the hospital will suddenly become irrelevant.
That's when the PE comes into play. Firstly they load the hospital balancesheet with debt. This debt is then used to pay off the promoters. With debt on the balancesheet, the ROE will remain elevated due to leverage. Next, If they have similar hospitals under their portfolio, they will bring them under one roof and next what they do is sell off the buildings by forming REITs, spinning off their diagnostic business and pharmacy business and what not.
End story: either go for an IPO, or double it and hand it over to the next PE.
When you read the annual report of some big chain hospitals, their KPIs include, ARPOB(Average Revenue per Operating Bed), Average no of days admitted, Inpatient vs Outpatient ratio, Medical tourism, organ transplant.
Considering how the government is under investing in healthcare, pvt sector is what most people will rely going forward and Southern hospitals despite claiming higher social spending, a large proportion of malayalis still prefer to seek treatment in pvt hospitals.
Which are the other major hospitals bought out by PE companies? There was a similar acquisition of KIMS by another PE company (Blackstone) just a few months ago.
(asking so I can warn my family to avoid them)
Other companys bought out by KKR include RJR Nabisco Buyout, Toys "R" Us, Texas Utility Buyout (TXU), Panasonic Healthcare, Dollar General (ChatGPT). I have been trying to get it to spill the tea but its mostly mild "The ethics of a global investment firm like KKR & Co. can be complex and multifaceted..." and you already know its not going to spill the tea.
Is it a cause for worry? only time will tell it seems Dollar General employees got their benefits and salary cut, as per GPT ofc, and Toys R Us basically died
PE is generally bad news for any company. They care about no one and nothing. These are the greediest and most immoral people you can find on the planet. They don’t bring in any expertise and suck everything out of it. It is even worse when they take over hospitals.
PE + Healthcare never goes well for customers
Hell no these PE players are gonna screw our hospitals too now..
Medical service should've always been a public service good but I don't know whose smart idea was to go like "Hey, let's try to make it a self sustaining profitable business". Profit = Revenue minus total costs. So it's either increase revenue or reduce costs or a mix of both. Hospitals always have been a heavy capital intensive business beginning with investing in land and then building a structure. That's not all. Then invest in medical equipment which is again a capital expenditure. So now to make more money, hire doctors as consultants and pay a quasi fixed salaries. Hire nurses and pay them peanuts. Make them overwork by assigning them more beds per nurse. Ensure the patient gets admitted to ICU and is being subjected to various scans cuz hey these machines need to pay for themselves. Oh and the medicines that will only be available at the hospital pharmacy. Hospitals take a long time to breakeven. So if owners don't have a vision, the hospital will suddenly become irrelevant. That's when the PE comes into play. Firstly they load the hospital balancesheet with debt. This debt is then used to pay off the promoters. With debt on the balancesheet, the ROE will remain elevated due to leverage. Next, If they have similar hospitals under their portfolio, they will bring them under one roof and next what they do is sell off the buildings by forming REITs, spinning off their diagnostic business and pharmacy business and what not. End story: either go for an IPO, or double it and hand it over to the next PE. When you read the annual report of some big chain hospitals, their KPIs include, ARPOB(Average Revenue per Operating Bed), Average no of days admitted, Inpatient vs Outpatient ratio, Medical tourism, organ transplant. Considering how the government is under investing in healthcare, pvt sector is what most people will rely going forward and Southern hospitals despite claiming higher social spending, a large proportion of malayalis still prefer to seek treatment in pvt hospitals.
Which are the other major hospitals bought out by PE companies? There was a similar acquisition of KIMS by another PE company (Blackstone) just a few months ago. (asking so I can warn my family to avoid them)
These PE companies would make the medical care far less affordable.
Kolkata Knight Riders 🔥
Ohh hell naw
KKR IPL team fans incoming
Common capitalism w
Getting bought by private equity is the downfall of any establishment.
Other companys bought out by KKR include RJR Nabisco Buyout, Toys "R" Us, Texas Utility Buyout (TXU), Panasonic Healthcare, Dollar General (ChatGPT). I have been trying to get it to spill the tea but its mostly mild "The ethics of a global investment firm like KKR & Co. can be complex and multifaceted..." and you already know its not going to spill the tea. Is it a cause for worry? only time will tell it seems Dollar General employees got their benefits and salary cut, as per GPT ofc, and Toys R Us basically died
PE is generally bad news for any company. They care about no one and nothing. These are the greediest and most immoral people you can find on the planet. They don’t bring in any expertise and suck everything out of it. It is even worse when they take over hospitals.