Take Medicine Back Keynote Speaker and Session

Listen to some of Take Medicine Back’s most influential members discuss why the Corporate Practice of Medicine is bad for patients.

Timestamps:
00:00 Start
1:03 Mitch Li, MD TMB
9:38 President of AAEM, Dr. Jonathan Jones
17:36 Brendan Ballou, Private Equity
46:55 Sailesh Konda, MD CPOM Updates
1:02:28 Katie Porter, US Representative
1:10:18 Q&A session

My pleasure to co-host for you today here in Palm Springs my co-host is Dr Mitchell Lee the founder and president of take medicine back and I would like to extend to each of you a very warm welcome and thank you so much for being here with us today we appreciate you

Taking the time off of your busy schedule to join us now we hope that the exciting program that we have lined up for you today today will be engaging and impactful each of you is here because you know that what you do matters what you put your time and your energy into

Matters to your patients to your clients to your family your friends and to each other the purpose of this event today is to bring together leading voices in the fields of medicine law and politics to work together to once and for all eliminate corporate interference and restore patient

Relationship the profession of law has broadly upheld prohibitions on the corporate practice of law to maintain the sanctity of the attorney client relationship why then has the Federal Trade Commission of the 1970s prohibited doctors from doing the same thing for the physician patient relationship specifically preventing the profession of

Medicine from enforcing standards of professional ethics you’ll find out from our speakers today why are there Federal programs that incentivize consolidation and vertical integration when both are known to harm patients you’ll find out from our speakers today why have State Attorneys General including here in California failed to enforce existing prohibitions on the

Corporate practice of medicine that were meant to protect the public or to investigate the contractual schemes used to circumvent law including the so-called friendly physician arrangements and stock transfer restriction agreements you know what it’s called when you work around a law instead of abiding by it it’s called being a

Criminal so why has the so why has the State Attorney General of California failed to investigate corporations and hospitals in California who instead of abiding by the law seek to circumvent it you’ll find out from our speakers today why is there no federal prohibition on the corporate practice of

Medicine as a requirement of federal funding especially when State prohibitions have so widely failed to protect the public you’ll find out today from our speakers why are there no significant Federal protections of physician due process rights including passage of the ER hero and patient safety act to protect doctors who are fired

Disciplined or not hired simply for speaking up for the quality of patient care you’ll find out from our speakers today and finally why have Physicians today many Physicians failed to recognize the existential threat that the corporate practice of medicine holds to our profession and our patients with that I would like to turn

Over the mic to my good friend Dr Mitchell Lee of take medicine back thanks Jesse uh thank you guys for joining today super excited um just going to do a really quick introduction and uh sort of set the stage from a historical perspective uh first of all take

Medicine back would not be here if it weren’t for the American Academy of emergency medicine which started this fight uh 30 years ago after there was a recognition that some leaders in the in the specialty were creating a business model that essentially commoditized the rest of us which follow the 1970s

Actions uh commoditizing the profession of medicine um and since then businesses including hospitals and private Equity firms have taken that to the next level and we’re reaching a crisis point there just a really brief overview of the of History if anyone’s familiar with the Gilded Age the actual Gilded Age from uh

Over a 100 years ago at the end of the 1800s and early 1900s this is the HBO series which I’ve gotten through three quarters of an episode I’m not hooked but um but it’s in pop culture right now so a lot of people think that we’re in a

New guilded age and I’m among them uh this is a pretty historically popular iconic image from the early 1900s the beginning of the Anti-Trust movement so there was a recognition that there was extremes of wealth poverty and Equity back 100 years ago and maybe that sounds familiar to where we are at

Today so there were a few societal responses to this one was the labor movement one was the Anti-Trust movement which we don’t really talk about trust today but we talk about the antitrust movement which is confusing because it’s really the anti Monopoly or Pro competition movement and there was the corporate

Practice of medicine Doctrine which is created by this profession and we don’t talk about that one as much so the American Medical Association says that the corporate practice of medicine concept dates back to the 19th century and was integral to elevating the medical profession and ensuring the autonomy of Physicians and providing an

Ethical basis for the practice of medicine so meanwhile the AMA today says you can enter into whatever contractual agreement we you want to and they even give you a guide on how to sell your practice out so uh something is wrong with that picture this was so integral

To the ethical basis of our profession maybe it’s time to go back there and I think there’s others that agree with us at this point this is uh we’ve got the authors of this article in New England Journal of Medicine uh 34 or so States enacted State Medical Practice acts various

Degrees of prohibitions on the corporate practice of medicine that were based on the doctrine that basically said Physicians should not be influenced or controlled by corporate lay interests meaning corporations that are not licensed to practice medicine which is all corporations unless they’re composed of Physicians labor movement as mentioned

We’re seeing that we’ve got a lot of Union people here um we’ll be talking on that one and uh this is the somebody iconic from the from the movement a supre Supreme Court Justice early 1900s who said that we can have democracy or we can have uh concentrated

Power in the hands of the few but we can’t have both and this refers to government but it also refers to corporations so we’re not here to say that we’re all it’s all government it’s all corporations it’s really concentrated power anywhere and that’s what we’re seeing right now it’s really

Consistent with our philosophy um I’m going to skip over this the antitrust Paradox gets a little a little bit uh a little wonky but in the 1970 we had this change in our nation’s how how we interacted with antitrust law that’s led to a lot of this commoditization and consolidation that led to

Hmos which was uh the idea that the nation’s mbas and business people were going to make uh medicine much more ethical and and Equitable and so here we are with uh Healthcare costing four times as much as it did in 1980 as a percentage the GDP because we have

Commoditized Physicians and our salaries did go down but that has not translated to lower cost for patients we have the Envision lawsuit you’ll hear more about that today so there’s movements here um this is a book from James Keeny in 1990s named in a 1990s way but um really so

We’ll call it the pillage of emergency medicine this was integral to moving and changing where we are today with uh the American Academy emergency medicine and and our group take M back so uh this is our white paper you can check it on our website uh we are now taking

Applications to become founding members for the 501c3 that we’re forming we’re a public benefit company right now um so our our website takemine back.org you can do that physician members at this point we’ll have supporting members um and that’ll help us with uh all the startup cost inform forming this

Including our website uh and then you’re going to hear from the rest of these folks because we deci we were working on this corporate practice of medicine thing started by uh Dr mamara and James Keeny um long ago but at the same time we did that so we’re a bunch of lawyers

And policy makers and they’re here today so you’ll hear from all of us and is Dr Jones there he is okay we’re gonna introduce Dr Jones um the president of the American Academy emergency medicine I’ll hand that over to you and we’ll get we’ll get started with our keynote speakers fantastic [Applause]

Thank you Dr Lee and now it is my pleasure to introduce to all the president of the American Academy of emergency medicine here to give his opening remarks Dr Jonathan Jones Dr Jones thanks Jesse thanks Mitch um so uh good to see everybody here I’ll just

Take a few minutes so uh as Mitch mentioned um I think a lot of this was spearheaded by the my predecessors as presidents of a uh this has been the core mission of the American Academy of emergency medicine for uh our entire existence and I’m proud to help continue

That and and not continue that but to expand that um with take medicine’s back assistance and so I’ll talk just a little bit um we don’t need to go through all these slides but this is I think sums up what am’s committed to a future in which neither patients nor

Physicians are subjected to non-physician interference right I think that’s why we’re here as was already mentioned by Jesse by Mitch the doctor patient relationship that is the core of what we do that’s why we went into this profession and that’s being eroded uh every day uh and so we need to get back

To that and that’s why our Academy exist is simply that um we have a lot of stuff so uh private equity and consolidation I’m just going to say a few things so right so uh corporate practice of medicine is bad I think yeah okay good it’s it’s good when you have a

A audience that you can connect with right but it it’s gotten worse I mean the corporate practice of medicine has just went over the the prohibitions against it have existed for a long time but so has the practice of it as existed for a long time and and I’m not going to

Say everything was fine because it wasn’t it was bad but but you know what it can get worse and it has gotten worse and so that’s what private Equity backed corporate practice of medicine is worse right because now at now it’s it’s short-term thinking as opposed to just

Just taking the profits and and keep them going and and taking advantage of the patients and the doctors now it’s let’s get as as much as we can in the next two to three years and then run this into the ground as fast as we can and now it’s Consolidated private Equity

Back corporate practice of medicine is what we’re dealing with now okay so despite the 30 years of a working on this the Situation’s only gotten worse but as we all know sometimes you have to you have to hit that bottom sometimes you have to get to that that ner where

You can finally rise and I hate to say it but if you ask the average patient right 10 years ago what corporate practice medicine was what private Equity was how many of them would have known anything about that almost none and it’s because it didn’t directly affect them and they are finally seeing

It affect them uh I’m make not going to be the first person to say this and you can shoot me down I know I just said it’s a friendly audience but Co did some really good things okay and one of the things is it shed a light on Staffing

And management and consolidation and corporate practice of hospitals and that’s the last good thing I’m going to say about covid but you got to take advantage you have to take advantage of of devastations okay you have to to to turn a bad into a good and that’s what

We’re doing in the American Academy of emergency medicine that’s what take medicine back is doing um so I just wanted to to do with that um these are the things that corporative Max corporate practice of medicine affects it’s not just us and our patients uh it’s actual National

Security just what two weeks ago I had a call um with the Department of Homeland Security about the consolidation and health care and if all of our hospitals all of our emergency departments are now run by one company and okay no it’s not one but right by a select handful of

Companies and what if we have a national disaster what if there’s a war what if something bad H is this actually a threat to National Security when Mitch first put me in touch with Homeland Security I said said what in the world do you want me to talk to Homeland

Security about okay but it’s true so this is is not just us and our patients we need to think well outside the backs and that’s what take medicine back is doing and so I applaud take medicine back and everybody that’s worked so hard with take medicine back by expanding

This and it’s not just doctors and patients it’s not just the emergency department obviously I’m an Emergency Physician that’s why I care about the most but it is not just the Ed it is the entire hospital it is our profession it is the health of this country and I’m

Not just talking about the physical health I’m talking about just our health our ability to to to be an ongoing concern as a country if we can’t manage our Healthcare cons you know no concerns then we don’t have anything um we’ll talk about that Envision bankruptcy in the lawsuit

Um we have a lot of good State stuff I do want to just I have to put a plugin for uh if if you’re an Emergency Physician or if not please if you want to keep this conversation going after this talk come uh this spring to our annual conference it’s in Austin Texas

This year we’re going to continue a lot of the things we’re talking about here and then I do want to just add one last thing on um due process which is not exactly corporate practice in medicine but it’s obviously very very tied to it so for years um a decade now the

American Academy emergency medicine has been fighting to get a a federal prohibition uh on uh the allowing Physicians to wave due process rights so long story short the federal government says you have to have due process rights as a physician to engage with CMS but

Those can be waved and so all of these thirdparty contracts all of these corporate entities Force the Physicians to wave their due process rights or you can’t work there so effectively Physicians particularly emergency physicians have all been forced to wave due process we’ve been fighting to get this changed we’ve had bills dropped

Again and again and unfortunately they don’t go anywhere just received word this past week February 26th in the Senate Roger Marshall and Elizabeth Warren are going to drop again a process to ensure due process for all Physicians so be on the lookout for that so I think

That’s a great thing I’m going to clap for myself um the last thing I want to add on the original name of the the Act was the ER patient and hero safety act I’m very proud to say that after discussions with both offices it is not only going

To apply to Emergency Physicians it will apply to all Physicians having the ACT dropped is the beginning uh we have supporters in the house um but we’re going to need your help and everybody’s help to get this across the finish line and then the thing that makes me so optimistic about

All of this not just that act and this is but this this is a issue that brings of us together this is not a partisan issue this is not a Republican or Democrat issue this is not a liberal or conservative issue we have Union people we have capitalists we have everything

In between that’s great this is a this is a health care issue this is a when you get sick and go to the hospital what type of hospital do you want to go to where do you want your family to go to who do you want making decisions for

Your family I think nothing better better exemplifies that honestly than the two senators that we have that are that are that are co-sponsoring this they’re about as as opposite sides of the spectrum as you can get and they agree on this I mean this this is a

Wonderful concept and we just need to get the word out more because nobody other than the fat cats that were in that first picture disagrees with this concept so thank you for being here thank you for fighting uh I’m here to support you and and I’m very excited to

Be at this event so thank you Mitch thank you [Applause] Jesse guys we were going yeah come on come on up uh hot seat I guess so we were going to and we will uh play a video from Katie Porter um um essentially a white whiteboard breakdown on the corporate

Practice of medicine uh I we’re just working on Tech issues so I can share screen we’re going to do that after uh Brendon BL so we’ll start with our keynote speaker Brendan blue JD author of plunder private equities plan to pillage America and also a Department of Justice

Federal prosecutor but not speaking on behalf of the Department of Justice but I am gonna still point that out because it’s also badass so um Brendan is has been featured on an awful lot of podcasts if you listen to like Freakonomics and all the all those kinds of things talking about uh corporate

Practice corporate practice medicine but also um private equity in across the board um he also is I you said this publicly on podcast is dating a veterinarian um and so he’s also looked at we and we have veterinarians joining us virtually uh and in person here uh there’s a corporate practice of pretty

Much all the professions are being taken over by private Equity firms and uh and really financialized so we’re going to open up with Brendan bl’s talk on private Equity we’ll have Dr syes Konda moderate some questions afterwards and then we’ll get a video on cpom and

Keeping in mind that we are uh a nonpartisan group but with bipartisan Solutions so we do have some videos from Democrats but we’re also in California and that’s you know that’s where we are so um without further Ado brenon Belo thank you very much and do we want to bring Sal up to

Uh they’re they’re pitching this as me as giving a keynote but this is really Duo here so uh do you want to introduce yourself I sure um I’m celes cond I’m a faculty University of Florida in Gainesville and oh yeah um I’m a dermatologist and M surgeon been there

For about nine years and I’ve done some extensive research in private equity and dermatology specifically uh since about 2017 and 2018 and then got loed in with Mitch and the rest of the gang about three years ago so great uh and I’m going to try to talk to the microphone

Because I understand that there are a fair number of people that are online watching this uh well first off thank you uh so much for coming out at at 8:15 in the morning on a Saturday uh this is horrifying for me uh as a lawyer but I

Guess you guys are doctors and are used to getting less sleep than I do so uh thank you thank you for your time um as Mitch mentioned I’m obviously speaking in a purely personal capacity here um and uh we we sort of initially discussed

This as a as a speech but I think as I said this is going to be more of a a Duo and a conversation here I want to talk a little bit about the private Equity business model generally and why it often leads to bad consequences and then

I’m hoping to pass it off and maybe talk you can talk a little bit more about the effects in healthcare specifically and it can become more of a dialogue um I should also say you know this isn’t a blow smoke but the reason that I came

Out here um was not to to give this talk but really to hear from all of you uh there is just a wealth of knowledge in this room and you know I can read the public reporting and the legal briefs and all of that but you guys are the

Medical experts and the professionals and so I’m hoping that we can have you know not just a Q&A in this panel but please uh let’s talk in the corridor or in the breakout sessions uh I am very easy to reach uh my it’s just my first

Name do my last last name at gmail.com so if we don’t get a chance to talk uh please reach out to me because I want to hear your stories and understand what’s happening to the medical profession right now so why don’t we start off with some

Basics uh I confess uh you know I did this whole project on private Equity I didn’t know really what private Equity was until after I got the book deal so uh is is any is yeah is anybody willing to raise their does anybody not fully understand what

Private Equity is maybe you’ve heard the term but the specific business model is anybody willing to be brave enough on that okay we got a room of experts here nobody’s going to raise nobody’s going to raise their hands well let me let me start off with just the basics and then

We’ll build up from there so uh the basic business model of private Equity is very simple private Equity firms take a little bit of their own money maybe one or 2% of the acquisition cost uh for buying up a business some investor money so that’ll be money from a pension fund

Uh a sovereign weal fund maybe uh uh Foundation or um some wealthy individuals and then a whole lot of borrowed money uh to buy up companies and the really important trick here to understand I shouldn’t call it a trick but really the tactic here that distinguishes private Equity is when

They use all this debt to buy up the business it’s not the private Equity Firm that’s responsible for paying the debt it’s the business that they buy so when KKR and Bane and Vornado spend several billion dollars to buy up Toys R Us or when Carlile buys up the nursing

Home chain manner care which I’ll talk about in a little bit uh spends billions of dollars on these Acquisitions most of that money is money that Toys R Us or manner care is going to be responsible for paying it’s a little bit like getting to use somebody else’s credit

Card so private Equity firms use this debt to buy up businesses and then try to flip the business for a profit um generally a few years later after making some Financial or operational changes um it’s a very simple business model you know um and it’s one that has been tremendously successful uh and

Increasingly pervasive in 2021 private Equity firms spent I think close to or over a billion do over a trillion dollars on Acquisitions in the United States alone uh so the entire US GDP is about $25 trillion that’s a bit of an apples oranges comparison but it

Gives you at least a a rough sense of scale here uh and they’re moving in virtually every part of the economy uh and they’re actually interestingly moving beyond the business of private equity which we’ll talk about in a little bit but if you’re in this conference you know that private Equity Acquisitions

Often have uh very bad results uh you know there’s the famous nursing home study say saying that private Equity Acquisitions uh in that industry are responsible for an estimated 20,000 premature debts over less than a 20-year period in the retail industry private Equity firms and hedge funds uh lost

600,000 jobs over a 10-year period nearly 600,000 uh at the same time as the industry as a whole was actually gaining jobs and on average uh private Equity portfolio companies so the companies they buy are 10 times as likely to go bankrupt as similarly situated businesses that aren’t bought up by

Private Equity firms very interesting so why is that why do you often have bad consequences across Industries um I think in the public reporting on this there’s often a focus on the people in the private Equity firms they say you know supporters of private Equity see these guys are Mass

Of the universe the critics of private Equity say you know they’re Evil Geniuses they’re you know cartoon you know they’re Mr Burns characters or something like that I I’ve talked to a lot of folks in private Equity I think by and large they are very friendly very

Nice people they take their kids to soccer practice um I don’t think it’s I think the the public focus on the people in private Equity kind of misses the point because it suggests that the solution is to swap out the people and it’ll solve the problem and I don’t

Think that’s quite right I think what’s going on here is structural private Equity firms and private Equity executives are responding to the incentives that are that surround them because of laws and regulations that we’ve created I always say you know lawyers like myself invent a bad business model every 20 years you know

Right now it’s private Equity firms 20 years ago it was subprime lenders 40 years ago it was SNL 60 years ago it was conglomerates a hundred years ago is trust it’s just something we do it’s in our DNA and then there’s a crisis and then hopefully something gets

Fixed so what are the incentives or what are the structural problems that we’ve got with the business model um I would argue that there are three basic issues first is private Equity firms invest for the short term so they tend to buy up companies for three years five

Years seven years very short period of time and that changes your perspective how you’re going to treat the business if you are trying to make a bit a profit or increase your profit in three years are you going to invest in R&D are you going to invest in infrastructure are

You going to invest in your employees or in your customers maybe maybe not second problem sort of alluded to it when we were talking about the business model is reliance on debt and fees so we already talked about private Equity firms um using debt to buy up these

Companies you know maybe making up 80% of the acquisition um at the same same time as they’re loading up debt on the company uh they are able to extract fees from the business so uh management fees which the portfolio company pays for the privilege of being owned by the private

Equity Firm or transaction fees which when the when the portfolio company sells off a key asset uh a percentage of that will go back to the private Equity Firm and the really interesting thing is these fees don’t go to all the owners of the business they don’t go to the

Pension funds and The Sovereign wealth funds and the foundations and the wealthy individuals these fees solely go to the private Equity Firm and so as the company is getting loaded up with thatt the private Equity Firm is able to take money out of the business the third problem and at some

Level I think it’s the least covered of uh the problems with private Equity or the private Equity business model but it’s potentially the most important is private Equity firms are extraordinarily successful at insulating themselves from the consequences of their portfolio company’s actions so if something goes

Wrong at a portfolio company uh even if it is the direct or indirect consequence of a directive of the private Equity Firm it is often um very hard to hold that um private Equity Firm responsible so how does that play out in practice um I alluded just a minute ago

To HCR manner care which was at one point the second largest nursing home chain in the United States uh in 2007 the Carlile group bought up manner care uh executed a number of tactics that are now sort of familiar you guys may be aware of some of these like a a sale

Leaseback where they required Manor Care to sell off all the re the real estate for its nursing home chain and then lease it back to itself which obviously generates a quick hit of cash but now it’s like a reverse mortgage now you’re responsible you you no longer add have

That asset and you’re going to have actually have to pay a lease on that asset cut Staffing health code violation Spike resident complaint Spike um one resident at a facility dies allegedly because of underst Staffing um she has to go to the bathroom by herself she

Slips and Falls hits her head on a bathroom fixture she dies of subdural hematoma when her family sues Carlile for wrongful death carlile’s able to get the case against it dismissed uh and what they do is they argue that we’re not the technical owners of the nursing home chain we just advise a

Series of funds who limited partners through several Chell companies own the nursing home chain and that’s enough to get the case against it dismissed uh and Carly was not held responsible uh for the actions at that nursing home center so that’s one illustration of how private Equity firms can escape

Liability let me give you one other one uh which is the diner chain friendlies or any if any of you guys are from the Northeast okay I see one person nodding he remembers this so this was this was like a like a you know American Fair

Diner you know it would be um like a steak and shake or Culver if you’re from the south or the Midwest or something like that um had this really inspiring story uh it was these two brothers Curtis and Presley Blake who started the chain back um during the Great

Depression it was an ice cream chain initially they sold cones for 5 cents a cone and uh they one brother would work overnight making the ice cream while the other brother would stay up during the day to sell it um and they would take shifts doing that they closed down their

Store during World War II to they said we’ll come back when we win the war it was this really kind of inspiring sort of All-American story they turn friendlies into this massive National success this huge chain um ultimately it’s sold to Sun Capital uh I believe in

2007 um Sun capital executes A lot of the sort of familiar tactics for private Equity Staffing is cut ultimately uh they push friendlies into bankruptcy when they do that um they have this really interesting tactic going on which is they weren’t just friendlies owner they were also Friendly’s largest

Lender and if you’re familiar with the bankruptcy process for corporations it’s a little bit like an hourglass where um the roles of the owners and the lenders sort of flip um and so by being on both ends of The Hourglass there uh Sun Capital was able to sell friendlies from itself to

Itself now why would you do that why would you go through that complicated process um the reason that you could is through bankruptcy Sun Capital was able to push the pension obligations that Friendly’s had onto what are called the pension benefit guarantee corporation uh which is this quasi government agency

That ensures um un unfunded or underfunded pensions and so now Sun Capital was able to continue to own friendlies uh free and clear the obligations that it once had to its employees uh and to its retirees and so you contrast the perspectives of sun Capital with the with the Blake brothers

Who say you know we’re going to come back when we win the war the co-founder of sun Capital gets asked what do you think of this process doesn’t seem a little unfair uh to workers that you’re able to abandon the pension fund obligations and this is a quote or near

Quote um the co-founder says we don’t make the rules um so one thing that I mentioned earlier is that private Equity firms are increasingly moving beyond private equity and this may be of relevance to you all as medical professionals so after the Great Recession or during the Great Recession

Um all the big investment Banks converted into what are called Bank holding companies which are regulated by the Federal Reserve and have higher Capital requirements they they sort of just became culturally much more conservative institutions um and it’s a little bit like pushing down on a balloon you know

As the regulation on investment Banks um became more intense uh a lot of the energy and innovation in the finance industry moved to private Equity firms which are vastly less regulated there’s a really interesting statistic it’s a few years old now but they did a comparison of employees at I believe

Blackstone and KKR which are two leading private Equity firms and Goldman Sachs and JP Morgan two leading investment Banks and these are rough numbers but it was something like 20% % of the private Equity employees had worked at one of the investment Banks whereas 2% of the Investment Bank employees had worked at

The private Equity firms and so what that means is all the energy all the brains of Wall Street are moving to private Equity firms um there’s this quote from an industry analyst who said something along the lines of you know Blackstone reminds me of Goldman Sachs 10 years ago and wherever something

Interesting is happening that’s where they are and you can see that in the numbers you know black Sim just became the largest private Equity Firm in the world with a trillion dollars in assets under management so what does that mean for where private Equity is going

Um they you know what we’ve been talking about are sometimes referred to as leverage buyouts you know using leverage or debt to buy out companies um that’s taking up less and less of private Equity firms businesses and is actually becoming a minority part of of many of

Their their businesses um one area where they’re getting increasingly active is um private credit so instead of buying up businesses they’re lending to businesses which is a business that makes a lot of sense in a world of higher interest rates um potentially very um attractive for financial firms significantly less regulated than other

Parts of the finance industry I can’t verify this but I’ve you know read critiques of what’s going on in the private credit credit industry saying that you know increasingly private creditors are relying on sort of second tier ratings agencies to get AAA ratings on debts that then become syndicated to

People that may or may not know what they’re buying um so that’s one area where folks are getting active another area where folks are getting active is uh the insurance Market specifically not what you guys have to deal with but the life insurance Market um so private Equity firms need money to

Buy up their V you know to buy up businesses to fund their various projects where are you going to get that money historically that’s come from you know Pension funds sofom wealth funds what we’ve been talking about but they’ve kind of tapped out on that money they’re running out of it so they’ve

Turned to buying up insur these life insurance companies and the reason you do that is you know if you have a life insurance policy you are paying the company the life insurer you know a premium every month or whatever that they then get to do with whatever they

Want want you know invest in various projects on the understanding that they will then pay your estate when you die uh so this gives them sort of a a steady flow of cash and they are moving the assets uh as has been publicly reported to Offshore Affiliates in Bermuda that

Have lower Capital requirements um which gives uh the private Equity Firm sort of more money to play with uh but less of a cushion if things go poorly and the challenge that we’ve got here is if things go poorly with an insurance company um the chances are good that it

Won’t actually be the private Equity Firm that has to pay out it will actually be these things called State guarantee corporations which are essentially insurers for insurers so all the other insurance companies pay into these funds to pay out insolvent life insurance policies so if one of these Bermuda based life insurance companies

Goes bus becomes insolvent it the state guarantee Corporation rather than the private Equity Firm um that has to pay out uh so it’s sort of a heads ey win tails you lose situation the last area where private Equity firms are getting active or hope to get active soon is and this will be

Much closer to home for all of us is 401ks so uh historically uh 401K fund managers have not invested in private Equity um rather you know presumably your retirement money is overwhelmingly invested in the public stock market or bonds and so forth um private Equity firms have

Worked hard to get access to 401K funds um and there have been regulatory hurdles stopping that um the last Administration issued a letter that sort of um get away with a lot of those hurdles and there’s active work now to make sure that private Equity firms can

Increasingly get access to 401K funds so in the next few years it’s entirely possible that you yourself uh will be an investor in a private Equity Firm so siles is going to talk a lot more about uh private equity and Healthcare I don’t want to step on his

Toes or anything but I’ll just very briefly mention you know some things that you already know which is that private Equity is extraordinarily active in your industry you know whether we’re talking about hospitals medical practices or things that maybe touch you less directly every day you know uh Pharmaceuticals medical devices and so

Forth um to the extent you’re interested Bane the consulting firm not Bane Capital issues a report every year on private equity and Healthcare very long it’s over 100 pages every year it’s it it may be worth reading just to see sort of the trends that are going on here um

And again I don’t want to step on your toes but I mean the reporting on this some of which cish has been involved in your Bloomberg story I thought was just incredible you know I’ll just give one detail that is always stuck with me which is the private equity for buying

Up um dermatology clinics and the you remember the needle example yeah yeah I’ll just sutures sutures yeah well I’ll let you tell the story but it’s it’s evocative um and suggests that you know private Equity firms may be in a position where directly or indirectly they are making medical decisions uh

Again with the aim of making a profit in just a few years time which may or may not align with the interests of your profession or your CL or your patients um so what can be done here at a high level before we talk about Healthcare

Specifically I I actually uh I I never want to be too optimistic about these things but I actually think that there is a lot that can be done and a lot that is happening um so in terms of what needs to be done so abstracting from Healthcare but just talking about

Private Equity generally you know it goes back to the three problems that I mentioned earlier you know short-term thinking reliance on debt and fees insulation from liability if you can solve those three problems private Equity can become a much more productive part of our finance system a much more productive part of

Our economy the question is how do you get there right so in a world where you know we have divided go government Congress may or may not act on something like this there’s actually a lot of tools that can happen starting at the federal level um purely from a

Regulatory perspective you know things that the SEC the treasury Department the Federal Reserve can do to increase transparency reduce leverage reduce systemic risk uh for private Equity firms there’s also things that um we can do in Industry specific sections you know one of the things that is really

Inspiring to me is watching and some of you may be paying attention to this rule making at HHS that’s going on right now to establish minimum Staffing criteria for nursing homes partly in response to that incredible study about private Equity debts there is not a minimum there’s not a federal Staffing

Requirement in nursing homes right now it’s purely State regulated and that may change uh in the next year or two but as much as can be done at the federal level I would encourage you all and this is why I’m excited to be here uh to be thinking about what states can

Be doing you know we and and even uh localities municipalities counties and so forth um you you know we talk about the specific tactics that private Equity firms do you know overleveraging their company executing sale lease backs doing dividend recapitalizations where they borrow money to pay a dividend uh to

Themselves and to their investors localities can potentially ban some of these practices or if not outright ban them then hold private Equity firms responsible when those tactics go poorly so they say okay if you’re going to do a leverage buyout for a business that’s headquartered or based in our Juris

Dition um and you’re going to do a use a lot of debt to do it okay you can do that but if something goes wrong we are going to hold you responsible for making hold of people in our jurisdiction you’re going to have to pay your employees and your customers back and so

Forth um there’s a lot of intellectual work that needs to be done on that um I think people are just starting to think about this stuff you know we really don’t have there really is not model legislation on this yet um on some of these issues um fortunately you know

There’s a lot of people in this room that are interested in this stuff and people that you know that are interested in this stuff and there are organizations like take medicine back but also the private Equity stakeholder project American economic Liberties project open markets Institute Americans for financial reform all these folks are

Interested in these things and want to do do good work so to the extent you’re interested in these topics um I’d suggest you know getting involved getting on these groups list serves uh understand what’s happening my last note is um I wouldn’t say one of you know hope or optimism but

Just encouragement here which is I think people tend to undervalue or um underestimate their own power on some of these issues uh I think the challenge of the private Equity business model is so pervasive that it can become overwhelming you know a sense that this is so all-encompassing in the American

Economy that really nothing can be done um I suspect given that you are here at 8 something on a Saturday that you disagree with that statement um and that you actually be believed that something can be done and I will say you know we’ve seen things get done on specific

Issues you know I already mentioned the nursing home Staffing room that was the result of concentrated advocacy one of the areas that I’ve seen the most work done the most successful work done has been on uh private equity and prisons where private Equity firms are buying up prison phone companies prison healthcare

Companies prison cafeteria companies and so forth prison phone companies in particular they have been uh buying up the businesses and charging extremely high rates for um uh short 15minute calls you know $15 or more um a few organizations were able to pass local legislation in couple of cities then Statewide legislation in

Connecticut and now incredibly Federal legislation uh to empower the FCC to do rulemaking on this um and that was it took time but it wasn’t a huge group it was a couple of folks that were really focused on this focused on one issue and focused

On it for a period of time and they had local state and now National success uh the the advantage that you guys have is that everybody likes doctors you know so you guys are a very sympathetic there was a tough crowd there tough see this is this is the problem

With me being a lawyer coming here you know so yeah yeah well I lost the crowd but uh but what I’ll say is you guys I think nationally are a sympathetic audience and I mean I don’t mean to be blunt here but you are a rich Audience by

Comparison like you know everybody I know you all have a lot of medical debt to pay and emergency medicine you know doesn’t pay nearly as much as it should but compared to a lot compared to the folks that were advocating on prison phone calls you guys have a lot of power uh so

I would not underestimate your influence here your ability to make change here uh which is again why I’m so excited to talk to all of you and I’m I’m looking forward to having this conversation thank [Applause] you and then now I’m going to segue to

Like a short slide deck I have and then we’ll go to like a Q&A session ironically I’m probably going to step on Brandon’s toes I’m be talking some of the regulatory updates happening um in the in the federal level all right so okay so basically talking about cpom

And then regulatory updates um relevant to cpom as well so I have no disclosures relevant to this talk one thing I want to start just start off with the sounds tangential but I hope this kind of gives you a mindset for today and this weekend you know what’s a profession versus what’s an

Occupation so profession is Advanced Training institutions occupation on the job training professions prolong education occupation length of training is not standardized profession is curiosity creativity thought occupation is largely manual work profession based on science or Theory occupation is mainly Guided by others values beliefs ethics are integral part of professions and may not

Be part of occupations strong commitment versus varable commitment autonomous versus supervised unlikely to change profession once you’re in it that’s that’s your whole career occupations can change every several years in a profession you value the commitment more than the monetary reward hopefully and in occupation You’re motivated by

Primarily the reward and then lastly with a profession ultimately you as the individual are ultimately accountable for your decisions and what you do occupation you kind of blame any issues to your supervisor or those above you and how many of you guys in this room raise your hands consider yourself as a

Profession for the physicians in the room that that’s common sense I thought all you agreed so we’re actually at risk of turning into an occupation with corpor pra medicine you can see the more corpor TI that we get we go more from this left column to the right column

That’s why everyone in this room should be concerned about corporatization happening in medicine so where’s PE and Medicine pretty much everywhere but the hot sectors have been ER Primary Care opo Derm RADS gastro Dentistry Aspen Dental I’m sure you guys heard of that’s a big p back Dental Group nefrology uh anesthesiology obig

Fertility is a really big hot spot now nursing homes as Brandon alluded to Orthopedics hospice and Behavioral Health is a very hot sector now as well especially in the tele medicine Behavioral Health sectors so I’m not going to do on this because Brandon already talked about PE

But essentially you know PE firms use a small fraction of their own money and they use a lot of borrowed money from uh bar debt barred Capital so typically the capital P from limited General Partners put up 30% of the of the money for a deal and 70% is debt they borrowed and

They try to improve the prospects squeeze profits try to try to quote unquote improve the financial health of the company and sell to another firm down the road or another Healthcare entity or an insurance company so what are some of the concerns for peack practices these are just overarching

Concerns across medicine in general you know leverage buyouts and a finite time Horizon for a specific return on investment usually fight a seven years but in medicine we’re seeing this happen in about three to five years a lot of the flips happening you can lose autonomy become cogs and widgets in a

Bigger system not just PE this could happen in big Health Care Systems as well big Hospital Systems as well leveraging Pas and npps uh difficult to mix PE and Optimal Health go patient care as the goals are inherently conflicted there’s a longstanding history of boom and bus Cycles every 10

Years is another cycle that happens usually coinciding with interest rates ebbing and flowing uh there’s examples of many PE back practices even from the 90s fi core fi Matrix there’s a lot of histories um you know seeing a lot of groups getting squeezed right now some of the ER groups Radiology groups with

The with the interest rates increasing Geographic consolidation can lead to anti-competitive practice practices and redefine the value of board certified positions and then who’s the next owner after the flip which I’ll get to in a couple slides and then this also devis the generations those exiting the Specialties looking for an exit

Strategy and then those that are entering the specialty looking for longevity in the field as a profession so who’s the next owner after the flip could be another private Equity Firm goals and timelines could be different even those that say hey my PE firm owner is amazing right now they’re

Treating as well it could be a brand new owner 3 five years from now they could sell to a larger Healthcare conglomerate a big Healthcare System could buy up the peack practice could go for an IPO initial public offering on the stock market or they could sell to insurance

Company as you guys will hear later here today you know some of the insurance companies are the largest employers of physicians in America right now and you can see this is typically all a game in healthcare law monthly you know the P Executives themselves say in one private Equity Cycle One critical

Strategy that P investors deliberate is the time timing of a window of opportunity so successfully exit investment at the best possible purchase price without being the last one standing and it’s typically this is a game of musical chairs the music goes and people circle around typically when

Debt is cheap and debt is easy to access everyone’s having a good time when debt is harder to access they come with other tactics like Brandon has alluded to and the Music Stops and someone’s being the last one standing if it’s not the PE firm it be the doctors or the employees

At the bottom and so core pratic medicine you know Mitch already talked about so I’ll kind of skip over this but you know AMA enacted this Doctrine many many years ago basically due to concerns from one align corporations to practice medicine two obligation to shareholders may not align with Physicians obligation to his

Or her patients and three employment of a physician by Corporation May interfere with the physician’s independent medical judgment this is really what the theme here today is see p and how do you preserve these doctrines that were enacted many years ago that people have been circumventing so how are they

Circumventing it in a quick one slide over this is how cpom is circumvented I’m sure it’ll go more in detail later but they form two entities a Management Services organization and Professional Medical Corporation and so what it does is the MSO provides administrative and management support to the group’s

Practices the MSO is the entity that acquires the assets of a wellestablished platform practice usually usually purchased as a percentage the practi is cash flow PHS that are in the acquired practice usually paid with ACC combination of upfront cash and Equity msos so let’s say you get paid a million

Dollars for your practice made this number of typically you know 60% or so or 50% might get paid as cash other 30 40% they’re forced to reinvest into the group’s Equity to keep them aligned or as MIT Lexus term as captive physicians in the model so they stick around while

The group is flipped and continues to hopefully grow meanwhile the P friendly Physicians um are part of the Professional Medical Corporation quote unquote paper owners um and typically there’s one head you know physician consulter there who employs the Physicians and non-physician practitioners continue this model grow add-on practices rinse repeat and that’s

How the process works but this whole model is how they’ve been able to navigate the Cal laws and regulations that are present in over 30 States um Envision lawsuit I will kind of skip over this because you guys going hear more in detail about this but em is

Is leading the way as you guys all know while pushing back against corpor pra medicine um and I’m prly going to go over some brief overview of what are some regulatory updates happening over the last three four years um in general FTC and doj are increasing their scrutiny of P Acquisitions in healthcare

Uh Lena KH the chair of the FDC has vowed a muscular antitrust approach to PE Healthcare deals and then caner who’s headed Do’s antitrust unit noted PE firms they hollow out and roll up an industry and essentially cash out and are very much at odds of the law and the

Very competition that they’re trying to protect and they want to increase enforcement with a multi-pronged approach so what’s happened timeline wise in July 2020 um starting with the Hart Scott rodino anti Improvement act this act requires PE to notify the FDC and doj prior to transactions that are more than $94

Million how many doctor’s practices are worth more than $94 million none so all of these are being acquired under the radar are not being reported with with the rules and regulations that are present at present so hopefully they’ll be looking into ways they can monitor this or even decrease this threshold

Requirement where they do have to report these Acquisitions happening they can have a better eye in the landscape and what’s happening because right now this allows P to quietly increase Market power and reduce competition under the radar um and then Chopra who was previous commissioner for the FDC acknowledges

Deficiencies and the need for increased monitoring moving on in January 2021 FTC issued orders to six healthcare insurance companies to provide data to retrospectively study physician practice Acquisitions over the past five years from 15 to 2020 and effect on competition I haven’t heard anything about that yet but hopefully we’ll see

With time what happens from that then in January 2022 the FDC doj launched a joint public inquiry sisting input on modernizing merger guidelines to better detect and prevent anti-competitive deals um during this joint public inquiry this was dominated by doctor’s worries over PE deals and their negative impact many complained about PEB

Consolidation C pom and detrimental effects on patient care and then April 2022 FTC doj held a listing form on first effects emerges and Acquisitions which uh Mitch here was an invited speaker and severals in the audience spoke as part of the public uh at that forum and then in June and October of

2022 FDC took action protect competition in the vet industry and we got one of them back there um and the unanimously approved two separate orders against jab consumer Partners requiring divesture of clinics in multiple Metro areas where there was too much competition going on from them the irony is they’re looking

Out no no offense but we’re looking out for the animals we’re not looking out for the humans yet so I’m hoping that’s setting a precedent for further actions in the area and then in October 22 FTC began investing P back us anesthesia Partners or whether it amassed too much Market

Power in some Regional markets again the same month doj enforced section two of the Sherman Act for the first time in decades this is not related to medicine but it was when a construction company contractor attempted to monopolize the market by proposing a strategic partnership with its competitor by allocating Regional

Markets between themselves now I don’t know how there other special in dermatology we have trade groups with some of these big peack groups our big peack trade group is called the Dermatology practice support Alliance and essentially comprised of the nine or 10 largest peat groups in dermatology

Which comprise about 70% of the market share of private Equity groups in dermatology and these groups have been known to essentially sell practices to each other help consolidate their Regional markets they’re focusing on and actually work together in certain Avenues as well so it’s a very gray line

Here on what they’re doing and so we’ll see if this shman attract shman act enforcement will actually translate to other things that Trigg groups may be doing out there then in January 2023 FTC proposed to ban non-compete clauses how many you guys have you heard about in

The room non-competes maybe who knows if it’ll happen or not but um this will definitely help workers increase competition the problem is this non- competes for everybody so if you’re a prior practice owner you may not want to get rid of non-competes you’re trying to protect your practice too so there’s a

Lot of voices in the pot here this is not just against big Corporation this is against small mom and pop too so it’s going to be different voices in the pot here to see if this actually gets over the over the hill and anything gets done with it and then lastly in September

2023 FDC did Sue us anesthesia Partners as a dominant provider of anesthesia services in Texas and the P firm W Carson Anderson Stow was also implicating that also which is probably a first not it’s setting a trend because as you alluded earlier Brandon usually P

From tries to dodge uh the lawsuit um so this is the first I think in the recent past where they’re being named as well as part of multi-year anti competitive scheme to one consolidate anesthesi anesthesiology practices in Texas two Drive the price of Ania Services provided to Texas patients and three

Boost their own profits um and then so Switching gears from FTC doj briefly the White House has been involved in things as well um you know three separate statements of fact statements from White House in February in October 2022 and September 2023 all about nursing homes Lawless propagated

From that study that Brenan alluded to um and essentially proposing federal minimum Staffing requirements tougher enforcement initiatives and efforts to expand the nursing Workforce as well in the states and then more recently December 2023 um they had another fact sheet released online from the White House you

Had to really dig into it because the title you can’t tell completely but it says Administration announces new actions to lower health care and prescription drug cost by promoting competition if you read further under the main head lines this is what they want to do in terms of anti-competitive

Issues they want to scrutinize these issues in practices they’re launching across government public inquiry into corporate greeding Healthcare they’re identifying anti-competitive rollups that currently evade antitrust review they want to increase ownership transparency which help kind of pull back the curtain to see what’s happening and also help with research studies as

Well they want to increase Medicare Advantage transparency they want to ban non-compete agreements that trap healthcare workers develop new payment models for doctors including supporting independent doctors and improve transparency of Hospital charges because you know hospitals are not you know they’re culprits in this as well and

Then also in December two senators uh White House and Grassley uh not by the spearheading an inquiry and a bipartisan probe of pe’s growing role in US Healthcare as well so I’ll leave you guys with a few quotes and we’ll go into our QA session um Jim chanos he’s uh

Kind of known as the Warren Buffett of short sellers in the markets he says but there are companies that can do that besides selling your practice right end of the day this is just an accounting game it’s just simply simply it’s pay a lump some upfront will keep the doctors

For five to seven years and then honor relman who was a past Newland Journal medicine edor in Chief um he actually passed away from uh melanoma he said how best to ensure that the medical industrial complex serves the interest of patients first and with stockholders second will have to be the

Responsibility of the medical profession and form public that’s what we all are doing here today so thank [Applause] you so before uh they do the Q&A uh we wanted to play a special video for you our next speaker wishes that she could be here uh in person uh but due to the

Legislative calendar and responsibilities in Washington DC she was unable to be so she recorded her presentation uh for you and we’re going to play it now this is us congresswoman Katie porter porter I’m sorry I couldn’t join you in person today throughout California doctors are spending less and

Less time with their patients due to the corporate practice of medicine now I know that everyone here today is likely familiar with this concept due to your work but our challenge as advocates is to bring more people into our movement we need to explain terms like corporate practice of medicine because the reality

Is that many Americans experience its harms as patients without even realizing it here’s how we can explain it to someone imagine that you’ve been experiencing some strange symptoms lately you easily make an appointment with your primary care doctor who then refers you to a specialist this is where

The problems Begin The Specialist you were referred to is part of a large Health Care System even though your primary care provider made a referral it takes you months to get an appointment when you’re appointment finally rolls around you have to spend 20 minutes past your appointment time waiting to even be

Called back by the nurse the nurse takes your vitals leaves you waiting another 20 minutes to see your doctor you waited months to get an appointment wasted time in the waiting room and had a $50 co-pay only to have your doctor then spend less than 10 minutes with you you like The

Specialist but leave feeling incredibly frustrated by how little medicine the doctor actually got to practice with you what you may not see is that your doctor is also frustrated that they can’t spend more time with you but the large healthc care Consortium that employs them recently changed its policies to limit

The amount of time doctors can spend preparing for appointments making referrals doing necessary paperwork and spending time with patients as a result your doctor has backtack appointments because others have left practice due to these policy changes and the health system isn’t hiring additional staff when the Staffing and schedule is set by

A large Health System everybody loses this is the corporate practice of medicine where large corporations such as insurance companies or private Equity firms employee Physicians to Prov provide medical services to maximize profit not provide the best patient care the most common way patients experience the corporate practice of medicine is

Through how much or how little time doctors spend with them corporations stretch their medical staff thin cramming doctor schedules at the expense of both patients and providers now let’s zoom out and see this on a bigger scale you think that the healthcare decision you’re receiving is a decision that is

Just between you and your doctor but wait there are actually two other entities who are influencing the care you receive big Insurance who we all know creates additional hurdles to receiving care and the large corporation that owns the insurer and hospital at which you receive care

Now you have to navigate The Maze of big insurance and Health Care corporations just to reach your doctor the corporate practice of medicine creates barriers to patients receiving the care they deserve when you go to the doctor you want them to be responsive to your individual health needs and act in your best

Interest but under the corporate practice of medicine doctors are constrained and beholden to the corporate interests of shareholders instead of their own medical expertise Unfortunately today the majority nearly three quarters of Physicians are employed by large corporations doctors increasingly have their hands tied they are forced to make difficult decisions

Between meeting the requirements imposed on them by their employer and their code of ethics to make matters worse corporations silence doctors and threaten to derail their jobs and careers if they speak out for patient safety I want to share the story of Dr Ming Lynn who was wrongfully fired for

Advocating for improved protective gear and safety measures at his Hospital in the midst of the covid-19 pandemic during a time when hundreds of thousands of people were dying the hospital that employed Dr Lynn chose to be selfish instead of purchasing personal protective equipment they terminated one of their doctors protect their profits

This is unacceptable Physicians employed by large Healthcare corporations don’t have protections if they speak out against this kind of corporate abuse the corporate practice of medicine has infected a whole field of medical Fields including dialysis nursing homes primary care emergency medicine and the list goes on and on private Equity has been

Consolidating medical practices and contaminating Health Care with increasing profit motives for decades right under our noses many states have prohibitions on the corporate practice of medicine yet the problem is still getting worse I’m proud that California is leading the way to fight these abuses with a lawsuit against The Envision healthc Care

Corporation without adquate enforcement we all lose out corporations are going to continue pushing the boundaries and disrupting needed patient medical care unless we act just like any Market Health Care functions best when patients have choices private equity’s consolidation of medical practices and pivot toward profit driven care harms patients and Health Care

Workers Health Care profits shouldn’t come at the expense of patient well-being we cannot allow private companies to dictate the level of care doctors are able to provide or punish doctors for standing up to their patients thank you for inviting me to speak today and joining me in this fight

Together we can build a Health Care system that delivers the care that Americans need and deserve the scenes here and we have to thank Faith quenzer wherever she is for literally going out to best bu and like Verizon last night to get a hot spot because this hotel does not have a Wi-Fi

With bandwidth to run Zoom okay so just the fact that we got a little feedback um I’m okay with that uh so we’ve got about we have 10 minutes for for Q&A we’ve got a couple questions from the zoom which we’re going to try to pipe in verbally so the

Actual Zoom participants can can speak um 10 minutes uh 9:25 is going to be the breakout sessions and here is going to be uh unionization or organizing and then the rest of it it should be in your your handout where you’re heading um so we’ll end it just a couple minutes

Before 9:25 so we get started over there um if you guys have questions feel free to raise your hands and then we will pass around a mic and I’m going to try to start with the zoom question and see if they can speak otherwise I’ll read the question uh for for Them meanwhile if you guys have questions pretend there’s a mic in the middle and yeah we can repeat the question were you raising your hand yeah yeah I just to get them to enforce the the laws they have against the corporate practice of medicine why can’t we do more to make

That happen I have some very general but you might have more specific thoughts on on enforcement at the state level you’re the you’re the Justice well yeah no and and again I I should just reiterate I’m speaking in a personal capacity and I I really you know there’s sort of some natural limits

On what I can talk about I think um part of it is is just speaking as just personally as a lawyer is when you’re working in a prosecutorial office an attorney general’s office a DA’s office or something like that there’s the kind of work you know you know the murders and

The crimes and you know you’ve got a white collar section that’s used to to dealing with procurement fraud or something like that and you know how to do those cases these laws have never been enforced you know to the s an exent as I understand some people don’t even

Know who has the authority to enforce them you know um whether it’s in some states the state attorney’s general or the medical boards or if there’s a private right of action or anything like that um you know Hayden who’s in the back there who has done much more work

On this stuff than I have will probably have answers to these sorts of things um but part of the job that I think the people in this room will have is educating the enforcers about the power that they have um and explaining to them both the problem and the and sort of the

The sort of Need for Action here but how you actually go about doing it so there’s going to be an education project that you guys are going to have to do I will add that it’s it’s very Grassroots effort and multiple individuals in this room um from Michigan and then Oregon and then

Florida Vicki somewhere around like they’re really Paving the way in these states and all the credit goes to them and if in other states if you guys want to pave the way these are great people to contact and connect with you can replicate and not completely build from scratch the same efforts

So we Got later of cnia did not the American Academy and to play your point and I’ll leave it to our lawyers and it’s the enfor we tried to get this California State Attorney General to take on the case and they said it’s the medicine medicine says no it’s there’s just all

This confusion I’ll let others but I wanted to add that this isn’t theoretical this this is happening in this state right now in fact the state agencies don’t don’t know who do we want to go with the person with the microphone just so that theine can hear follow up to what she said

Of like this um my name’s Laura Kenny I’m a direct care physician in Missouri and um we’re one of the states that doesn’t have any cpom laws the Midwest was pretty white up on that map um so kind of a follow along to what she asked if

We’re trying to advocate for a a law to pass and it’s a denovo piece of legislation who could we consult with so that the legislation is written in such a way that it does Define who has author you know so that we don’t repeat the same mistake

That these states that already have laws but they can’t even enforce them even though we’re behind the eightball we have opportunity to write a better law well I Point again to Hayden who’s the real expert on this so he’s G to have a bunch of work coming out of this conference who’s Hayden

Hayden so so we all have to talk to him I think that’s part of it uh I I guess I’d also add there you know I I mentioned in in my section there are a couple organizations you know um Americans for financial reform and American economic Liberties project are

Just two of them historically those have just been policy advocacy organizations but I think I’ve seen them getting increasingly interested in doing legal advocacy uh so aelp just hired I think their first legal director so they’re building a body of expertise on the sort

Of stuff so I think if you marry some of the the sort of sector specific stuff that folks in this room have with some of the institutional experience that these organizations have I think there there might be some really uh fruitful work done how much of a problem are

Consulting firms like McKenzie um impacting on this I mean I’m I’m just listening to when McKenzie comes to town it’s frightening and I I just wonder how much money they’re extracting from the system and getting away with well to my knowledge I mean they McKenzie as a consulting firm is not extracting money

Directly from these buyouts they’re being getting paid consultant fees to all the intermediaries that are conducting the transactions about the timing or the right people to go after or the the the market shares they want to go after and get um so they’re definitely profiting off of it but

Usually it’s not off the direct transaction it’s about bringing two different stakeholders together to complete the transaction you got one question for attorney general is um what gets the attention of the Attorney General is it a newspaper article like York Times that’s a good question um so the question for folks online is is if I can restate and we this is a celebrity Dr minglin right here so uh so what gets the attention you said attorney general maybe I’ll I’ll rephrase it as as because this is

Primarily a state level issue you know a state attorney general or a district attorney or or something like that um again I think part of it is you know maybe I’m naive here um and you know sort of biased from my profession but I do think that most lawyers are are

You know in government are mostly trying to do the right thing um you know a lot of the career people there are really trying to enforce the law and make their communities better um but a lot of it is coming from a place of ignorance which

Is lack of awareness of this law lack of awareness of how to enforce the law lack of awareness about who enforces the law so part of it is the risk repetition is is just an understanding of sort of giving them the Mechanics for how to do

These sorts of things I think but I think your your general point is Right which is um you know anybody’s sort of uh uh resources as a prosecutor or a or a regulator are extremely limited and you have to choose which things are going to be most impactful so I think

Humanizing this problem I think is going to be really really useful for for folks that are thinking about advocacy at the state or local level here which is explaining that this is not a technical violation you know sort of a a failure to check a box or something like that

But to explain in very specific terms how patients and how communities are going to be harmed I think if you present that to folks in a way that’s digestible um is going to be really effective the last thing that I say is you know the one of the challenges that

We’ve got is you know I’m coming from one profession you guys are coming from another we all have our own jargon unfortunately and I think sometimes lawyers and doctors talk past each other a little bit um so I’ll just say i’ I’ve received the 20page single space complaints from folks as I was

Researching my book it’s overwhelming I don’t understand it you know if there’s a way to do the the two-page version of it I think can often be just as effective or more effective for a busy you know local level da or something like that that’s trying to understand

This issue so trying to make it digestible uh is going to be really helpful I’m just going to uh talk a little bit for the folks in the on the chat the zoom um first of all if uh if anyone wants to speak from Zoom uh do

The little hand raising thing we’ll try to actually pipe you in so you can say that say things uh out loud otherwise we’ll repeat some questions from there and then uh thank you for repeating questions for any speakers if somebody’s speaking without a microphone uh the uh

Folks on Zoom can hear um but we had one question I think would be great from uh a zoom participant Christopher Galo uh we this is a PE a peey talk we’re talking about the corporate practice medicine overall which cpom prohibitions originated before really the concept of insurance or at least before insurance

Was a big thing and before CMS so prior authorization insurance compan those are lay entities affecting the practice of medicine and is CP in my view the question is your description of private Equity makes it sound like the PE people are the only ones who win in these deals

If so if this is the case why do I’m not sure what swfs was but like pension plans and retirement plans why do they participate in these deals why are they investing I’ve got my answer but do you have yours yeah I mean they’re they’re just chasing where the pension plans are

Chasing you know profits for their people that they need to be supporting with the pensions so like in dermatology there’s at least two or three um big PB durm groups that are backed by Canadian pension plans teacher pension plans government employee pension plans so those profits are leaving the American

Health ecosystem or the ecosystem in general and going to Canada to support pension plans and the Similan they’re chasing it because they feel the stock market was not giving enough returns um and they want some something better than 3 four 5% and PE will often promise that

They may not always deliver it but they promise that to the pension plans so it’s it’s a great question I know we’re running up on time here um there are definitely a lot of examples out there where the private Equity Firm wins the company loses and the other investors

Lose what are called the limited partners so the the Pension funds The Sovereign wealth funds and so forth where you know I I mentioned earlier Toys R Us for instance I think essentially wiped out the limited partners investment though there was reporting at axios that uh the private

Equity firms actually walked wages fine so there are lots of examples like that there are also a fair number of examples where uh everybody wins or all the investors the private Equity firms and the limited partners win at the expense of the portfolio company because you’re

Able to extract a fair amount of money um or make short-term gains that hurt the company in the long term um the really interesting thing that I’ve seen sort of as it’s moving from the academic world into the actual investing world is there’s a fair there’s a growing body of

Research out there saying that private Equity returns when you account for fees actually aren’t better than investing in the stock market um so you kind of ask yourself well then why the heck are Pension funds and Sovereign wealth funds and Foundations continuing to invest in that I’ve heard

A lot of different explanations you know sort of from the conspiracy theorists who are saying oh it’s a sort of corruption corrupt interaction between Pension funds and private Equity firms I i’ I think that has been disputed or discredited at some level I think the more credible explanation when I talked

With um folks that are advising Pension funds is they say right now it’s a herd mentality that you know okay this is achieving rough parody with with the stock market or maybe it’s even a little worse than the stock market but no pension fund manager is going to stick

Their neck out and decrease their uh exposure to the private Equity Market because they don’t want to look like the idiot that did that and then lost a bunch of money um so it’ll be interesting to see what happens now in a world of rising interest rates where

It’s a lot harder to make money on a leverage buyout um whether that ultimately has a ripple effect into the pension fund and Sovereign wealth fund world and they grow more skeptical of this industry then then we’re two minutes over what effect that has on where private Equity firms get their

Money and whether they put you sort of double down on the insurance business on the private credit business on the 401K business and so forth so it’s going to be a very interesting few years uh we are right up to 9:27 we’re pushing into the next session I I’ll

Read a question here and I think I’ll just kind of uh answer it very quickly so we can move on in the session but uh question from uh Zoom from Nick uh what can what can one do with privately owned family companies like epic Corporation that are not that do not necessarily use

Private Equity strategies but have an immense impact on patient wellbeing uh the thing I’ll say there is if they’re really influencing the practice of medicine which the practice of medicine is influenced in a lot of different ways than simply employing physicians in our modern era but that is

A lay company that is not the actual Physicians lay just means they’re not Physicians they’re not licensed to practice medicine so I don’t have the exact answers on how to fix that but we do know that data uh and and control of dat is a big way that these lay

Corporations with epic also has a lot of um deals and essentially contracts with a lot of other lay corporations that are controlling the practice of medicine so the cpom is a very broad concept and it’s a lot more complicated than when the concept came up when it was

Basically cash pay which we’ll talk about direct Primary Care as well uh between a physician and a patient the only way that it was influenced the practice medicine what influenced at that point was basically employment by corporations which we are at the point of 74% or more Physicians employed by

Lay corporations that includes hospitals and we’ll we’ll talk about that too um any other last remarks before we move on no thank you so much selfemployed your own and and there’s that so yes you can we we will have uh so we’re going to go the breakout sessions right now uh for

Time that we’re kind of losing um because we’re just a tiny bit behind just please be back in in this room for the plenary sessions like 3 minutes two minutes before and um so we we will’ll get back on time for each plenary session uh in here is going to

Be um I believe unionization and organizing yep and then uh section uh medical education and residency in Salon 2 the Private Practice track Salon three this should all be in your handouts and then Salon one is uh advocacy physician advocacy all right hey really can slides moderator this is Lucas can you

Make me co-host I’m gonna share my screen and then show everybody how to get to all the different rooms there are various breakout rooms I’ll show you how to get [Applause] and you can make me coost right now and then I’ll be a to share my screen [Applause]

That’s it yeah yeah when you said that was well I need [Applause] Break leave zoom and join Zoom there in a moment I will show you how to do that be right back I know it’s hard to hear right now but we’ll [Applause] [Applause] hi everyone this is Lucas here with tech support and there’s going to be a few breakout rooms happening

And I’ll show you how to move yourself to those rooms if you were here at the top of the hour when the conference began then you already know how to do this and you’re going to leave Zoom jump to the next room and open Zoom when you

Get there I’ll share my screen for those who are not familiar with the process and you can also unmute and ask any questions I’ll pause the recording here also