Welcome to our live show!
In this episode of the Out of the System podcast, host Matthew Glogli delivers a forceful critique of venture capital (VC) and private equity (PE) involvement in U.S. healthcare. He argues that VC/PE ownership of hospitals and medical practices degrades patient care, harms physician wellbeing, and inflates costs, offering three broad causes of the current crisis: the Affordable Care Act’s consolidation of insurers, regulatory capture of the FDA/CDC, and, most centrally, the profit‑driven motives of VC/PE investors. Glogli traces the historical legal backdrop from the 1980s Stark Law—intended to prevent physician kickbacks—to today’s RVU‑based bonus structures that he claims are effectively a loophole allowing the same conflicts of interest. He illustrates the problem with a personal anecdote about an unnecessary hip replacement driven by incentive‑based surgery scheduling. The episode cites multiple data points: a 2025 Cermel Barometer survey of 500+ physicians (54% say PE lowers care quality, 78% say it can compromise care, 49% rate PE‑owned facilities worse than nonprofits), research showing 12% drops in ICU staffing and 16‑18% salary cuts after PE acquisitions, higher rates of infections, falls, and emergency department mortality, and a Health Affairs study linking PE‑owned practices to a 20% reduction in retinal detachment surgery access. Glogli also discusses the corporate practice of medicine doctrine, noting state‑by‑state variations that sometimes allow non‑physicians to own clinics, and highlights emerging regulatory pushback in states like Connecticut. He concludes that while PE could theoretically coexist with healthcare, it would require fundamental changes to incentive structures and stronger oversight, as the current model has increased costs, restricted access, and contributed to physician burnout and suicide. Listeners are invited to share their thoughts and continue the conversation.
Chapters
Out of the System, the podcast that helps lead doctors out of the nightmare of insurance-based care. Uh, today I am going to talk to you about venture capitalists in medicine, the bad, the bad, and the ugly. Now you'll notice that I'm not talking at all, at all, saying at all about the good, the bad, and the ugly. I personally believe there are 3 main things that have made healthcare in our country Atrocious, an absolute shit show, if you will. One is the Affordable Care Act that essentially— and I've talked about this before— that essentially gave power to the insurance companies to consolidate. And it's happened. Care has gone down, costs have gone up, and the only thing that's really happened is the politicians and the health insurance companies have, quite frankly, made billions of dollars. The second thing that has really hurt healthcare in America is the lack of oversight from the FDA and the CDC and the agencies that are there to protect the consumers. They have completely sold themselves out prior to this current administration to big money, giving, you know, as many people are probably don't even realize, the FDA, if you're an executive at the FDA, And the CDC, you actually get a percentage of the patents of the things that you approve. But I've talked about those in other podcasts. So the third one that I want to talk to you about today is the atrocious negative impact that venture capitalism has had in healthcare. So let me give you a little bit of a background first and foremost. I think this is really important for you to understand. Well, and I'll just say this. I believe that venture capitalism buying hospitals, buying practices, and inserting itself in its healthcare in the United States is as bad for the American public as leeching was as a way to fix sicknesses. There is nothing I can find that has been a benefit For the patient and for the doctor. Now, there's been benefit for people that have invested in the venture capital groups and the people who run those things. They've made a fortune in a lot of, in a lot of cases, not every single one, but in a lot of cases. But for the real intent of healthcare, the whole purpose of healthcare is to take care of the patient, for that patient-doctor relationship. So let's take a look at some things. Okay, let's just take a look at what has been going on. In the industry. And let's go back to the 1980s and let's go to the Stark Law. The Stark Law was put in place essentially so that— and this is a summary, okay? So this is not— I'm not giving you all the exact historical parts of it, but Stark Laws were put in place specifically so that doctors— doctors used to get compensated by the pharmaceutical companies for recommending their drug or their device or whatever. And so the doctors were given a percentage of that. If you had a, I don't know, let's just say a $1,000 joint or something, or device, the doctors were getting compensated on that. They had a commission program where they had a plan in place that if you did so much, you got paid more. Okay. This happened in with the Sacklers and the opioid crisis. They were given bonuses based on how much not only the pharmaceutical rep sold, but also the doctor. Okay, well, that wasn't really good for the patient because the doctors were being incentivized just to prescribe something or give something. And so they did— what they did is they put in Stark Laws in, I believe, the late 1980s. And what they did is they outlawed the impact of a doctor being compensated based on Revenue performance, just like a salesperson. Okay, well, that also applied to, by the way, to lawyers. Okay, so if you look up Stark Laws and its intent, you can find very specifically that it states that you're not to be— that doctors cannot be given bonuses and commissions. Last, let's fast forward to today. Today what they've done is they've changed. They are giving bonuses and commissions to doctors, and it's called RVUs. RVUs are nothing more than a form of bonus compensation for the doctors. Now, I'm not opposed to doctors making more money, not in the least bit. However, there becomes a conflict of interest. Now, the Stark Laws are still law in this country. However, they are not enforced. I believe that that is a horrible thing for the patient. And the horrible thing for the doctor. I will give you an example of this. I have a very good friend of mine who lives in the Southwest, lives in the state of Arizona. Um, and we, uh, he and I and his wife were out to dinner and we were walking around. We were going to these multiples, one of those like wine kind of things, and one place you go try this a bit of wine, that kind of wine. And we were walking around, uh, the downtown where we lived. And we probably had to walk a good, I don't know, 15 blocks around or something like that. And, uh, his wife said to me, oh, by the way, I'm gonna be getting a hip replacement. I looked at her, I said, why? And I was watching her walk, she was fine, she had a slight limp. She goes, yeah, my hip's been really bothering me. And I go, well, did you— by the way, it was November, okay? And I said, uh, when are you gonna have that surgery done? She said, I'm gonna get it done right after Christmas. Get it done before the end of the year. Okay. When you went to go see the doctor, did they do an MRI? Nope. Did they do an ultrasound? Nope. Did they do an x-ray? Nope. What kind of how much time did they spend with you? About ten minutes. Told me I need a hip replacement and scheduled it. Okay. Why don't you go see my doctor over here who does regen? She says because Linda, I'm not a doctor. I can't sit here and tell you based on how you walk whether or not you need a hip replacement. However, it seems a little odd to me. Well, she went and saw my friend, got an MRI, x-rays, all this stuff. He's like, she doesn't need a hip replacement. She just needs, you know, some regenerative therapies, which she got, and she's much better. And that got me thinking, how many of these surgeries are done? Now, I'm not gonna say that every doctor is doing this, okay? Please understand me. But how many of these surgeries are done? That are not required simply so that people can meet their end-of-the-year bonuses. I don't know this for a fact, but let's just hypothesize that that was the case, that this doctor needed to hit so many in order for him or her to get another bonus. I'm not opposed to people making more money. In fact, I'm a big advocate of it. I think that if you're highly trained, you should be highly paid. I believe that doctors should be highly paid. I do not believe that doctors in the insurance world and the Medicare world, in the Medicaid world, should be given bonuses based on performance and how many surgeries they do. I think that's bad for medicine. I think it's bad for public trust. I think it's bad for the health of our country. RVUs are put in place by hospitals that are traditionally owned by venture capitalists. Okay, so if you look and if you just take a look, let's see, I think this is— I think it's utterly fascinating. I have yet to meet any doctor who works for a venture capitalist-owned practice or hospital that is happy. In fact, I'm going to give you some statistics, okay? Um, and I think this is going to be rather fascinating to you, but I'm going to give you some statistics of what we see in the industry, okay? So there was a survey. Um, bottom line, here's the bottom line: clinicians overwhelmingly describe venture capitalists, private equity Involvement, uh, in healthcare as bad. They prioritize investor returns over patient care. And the numerous surveys that have been done and the peer-reviewed research back up their complaints with hard outcome data. Here's what the data says. What physicians are reporting in 2025, Cermel Barometer surveyed 500+ physicians and found that 54% believe that private equity investment has decreased care quality, while only 2% saw meaningful improvement. 78% said private equity investment could compromise patient care outright. 49% rated PE-owned facilities worse or much worse than nonprofit ownership. Majorities also had negative views on physician wellbeing, 58%, healthcare costs, 57%, and health equity, 51%. Doctors described moral injury, the sense that corporate revenue-driven ownership forces them to violate core clinical values. An emergency physician by the name of Robert McNamara, who's the co-founder of Take Medicine Back. And by the way, if you know Robert McNamara and co-founder of Take Medicine Back, have him contact me. Love to have him on the podcast. He put it bluntly: working for investor insurer interest conflicts with conflicts with a physician's duty to put the patient first. There are some states where they have outlawed doctors owning hospitals. Who better to own a hospital? I know that there's— Mayo's owned by the doctors. I understand that that's a pretty good place. You know, we have taken a purely American view to how to fix healthcare, and we believe the answer to everything is private equity and Wall Street. I'm here to tell you it's not. When you look at the amount, the amount of private equity that has been put into U.S. healthcare Buying hospitals, buying practices. What has happened since 2010 with the passing of the Affordable Care Act? If you look at what has happened, it has completely decimated the autonomy and the freedom of the doctor, and to mention the nurses and nurse practitioners and the PAs and the entire staff. It is all driven by how quickly can we turn the bed. and how quickly can we move on to the next patient? Okay, it's no different than a restaurant, quite frankly, or a hotel. Nurses and their unions report and describe a consistent pattern across private equity-owned hospitals. The hospitals prioritize profits over patient care. There is a hospital in Connecticut, it's called Connecticut's Waterbury Hospital, formerly Steward-owned, organized, reported nurse-to-patient ratios far exceeding safe staffing and committee limits. The Massachusetts Nurses Association pointed to the Stewart Healthcare collapse, which was a big collapse, as confirming what the Nurses Association has been saying for years, that private equity ownership starved hospitals of staffing and resources. There are common complaints: substituting cheaper, less qualified staff for RNs and physicians, delaying equipment and facility investment, and executives sitting on hospital boards with no clinical background. That to me is probably the worst thing that can happen. You— they're— look, I'm fine. Private equity in hotels, private equities in golf courses, private equities in restaurants, whatever. In healthcare, healthcare should be about creating an environment where we can increase delivery and the speed of delivery and the speed of care. It should be about prevention. It shouldn't be about getting somebody addicted to a statin or a pill or whatever thing like that so they can never get off it. This is— it's, it's horrible what has been going on. Um, here's some other research. Um, full-time staffing fell 12% and salary spend dropped 16 to 18% in, um, ICUs and emergency departments after PE acquisitions. Private equity-owned hospitals show more advanced events, bloodstream infections, surgical site infections, falls, and increased Emergency department mortality and interhospital transfers. In 2025, Health Affairs study found private equity-owned practices cut access to retinal detachment surgery by nearly 20%. Okay, so this is not— if you, if you look at this overwhelmingly, most physicians, most physicians do not view private equity as a benefit. Now, some do, the ones that own it. I have some friends of mine that have sold to private equity and they've done very, very well. They think it's great. But overall, the data tells us differently. The data suggests that private equity in healthcare, owning hospitals, buying practices, not only hurts the doctors, but it hurts the patient, the exact person the doctor has been designed to heal and fix and cure. Now, look, patients are not clients. They are not customers. They are patients. And that word delineation to me is incredibly important because very simply put, a customer is someone that is saying, hey, you know, I'm going to do this. I need this thing. I'm going to get a Give a barbecue pit put in my backyard or something like that, right? And they go through a process and they decide to spend the money. A patient is coming to you because they have something that hurts them, that ails them, that they want to get fixed, that they want relief from, that they want some comfort. Private equity doesn't understand that. Private equity has one role. in one role only. That is very simply to improve the return on investment. Now, can private equity and healthcare live together? Sure, why not? Of course it could, but it has to change. One, so what do we do? Okay, well, in many cases, as a friend of mine says, The horse is already out of the barn. I mean, this has been in play for a good 10 to 15 years. Practices are getting bought and sold every 3 to 7 years. Hospitals, things are trading back and forth. However, there is a reckoning starting to happen that I'm starting to see. First and foremost, there was a belief by the venture capitalists and the private equity that because if they had a lot of locations, they could have leverage in negotiating with the insurance companies. There are some signs now. Um, and when I say some signs, this is whisper conversations that I hear at conferences and from my friends in the industry. That is not the case, that actually the UnitedHealthcares and the Blue Cross Blue Shields of the worlds and the Aetnas have figured out, well, wait a minute, we actually control the purse strings. If we lower the reimbursement rate, Maybe that practice or hospital will go bankrupt and we can buy it cheaper. By the way, that's happening. You see, UnitedHealthcare controls 11 different distribution points in the patient journey. Think about that. You want to know what area they make their least amount of money in? Make the least amount of money in healthcare premiums. Okay. So if I was taking a pure business school view of this, and I had leverage over my competitor, and then I could force them out of business and I could buy them for pennies on the dollar, I would absolutely consider it. Okay, so one, we have to realize that the horse is out of the barn and there's some stuff that is going on. So what do we do? Well, one, some states are beginning to enforce another little-known part of this entire process And that is corporate practice of medicine. I'm very familiar with corporate practice of medicine. In North Carolina, we had 3 clinics, and our arrangement was, is that we had a business arrangement with the doctor. The doctor owned the clinic. We had the management company. We put up the money. We did all that. We leased the employees. We did it by the book. I know because we had everything reviewed and we followed the letter of the law. We did it from a legal standpoint. Okay? The doctor had all of the medical decisions. Mm-hmm. We take care of the business decisions. And it was a symbiotic relationship. There were challenges in the, in the relationship and in the conversations, but the fact of the matter is, is it worked. Okay, now the problem with that is that has been abused. One of the ways that you can get around the for-profit corporate practice of medicine is you— for many states, not every— now I'm not speaking of every single state because every state has their own different corporate practice medicine. So for example, in Virginia, I can own a medical practice as a non-doctor, at least the last time I reviewed it, which was probably 9 months ago. In North Carolina, I cannot. In California, I cannot, right? There's all, all the laws for corporate practice medicine. There's like different state by state, but overwhelmingly in most of the states, it's very simple. If the entity is a nonprofit, nonprofit Then the doctor doesn't have to own it. Now, there are a lot of loopholes that exist out there. There are some states like Connecticut that are now saying, hey, any transaction has to be reviewed by the state. The state's starting to get involved. Now, I'm not necessarily one for more governmental oversight. However, I believe it is warranted in this case. I believe we have to go and we have to look at how this is being done because it's not in the best interest of the American public. VCs, PE ownership of hospitals and medical practices is not in the best interest of the patient. It has not lowered healthcare costs. It has not increased capacity. It has not made for a healthier America. In fact, it has increased costs, it has restricted access, and it has worsened and contributed to the declining health of America. All the while, you, the physician, are the one getting screwed. You are the one that is holding the bag. You are the one that is getting the bad reputation with the patient because the patient doesn't understand this. They They don't understand why you can't spend more than 7 minutes with them because you have a metric to hit. You are getting burned out. Your fellow doctors are committing suicide at a rate that's 2.5 times more than any other profession. You are the ones that are leaving medicine early after sacrificing your 20s and early 30s to the betterment and the healing of the human race. Yeah. Private equity. Venture capitalists, they're about as good for health as leeching was. And by the way, if you don't know the reference, former President of the United States George Washington, after he had served our country dutifully and led us for— to freedom from the British and served 8 years as President of the United States, got sick and they used leeches to try and heal him. He didn't make it. They bloodlet him. In fact, some people will tell you that the bloodletting is what actually precipitated his death. I can't find any reason why private equity and venture capitalists are good for healthcare in America. I'd love to know your thoughts. Post them below. Send us a note. Check us out on YouTube, LinkedIn, Instagram. I'd love to hear it. And I'd love to continue the conversation. This is just the first. You want to come on the podcast and discuss it in depth? I would love to hear from you. Send us a note. All right. I'm Matthew Glogli. I'm the host of Out of the System. I'm a non-doctor leading doctors to the promised land of healthcare. You have a great day.
More from Neo
OUT OF THE SYSTEM | How 100,000 Free Doctors Could Save Healthcare $40 Trillion
