Questions about Healthcare Banking

Hey all,

With junior recruiting spinning up and with group selection for my BB SA internship starting soon, I wanted to ask about what analysts in healthcare groups do and if any of you have moral questions about the role you play? I'm super interested in HC and have read a number of books on the history of the medical-industrial complex in the USA, and personally I slightly disturbing how the incentives of doctors, insurers and pharmaceutical companies affect Americans with high and rising prices for drugs and insurance, poorer quality and less cost-effective care, etc.

Should I avoid hc groups for this reason? Are transactions ever justified on bases that are likely hurtful to the population, or are they justified on the usual bases of general cost-savings/synergies? Where else should I look to learn more about hc banking in particular? Do you think your work benefits society in the same way that work in other groups does?

I would really appreciate any insights, because depending on the details of the job I can see myself gunning for Healthcare as my top choice (as I would love to work in Healthcare VC in the future). Thanks!

 
Most Helpful

You should not pursue HC banking. Based on this diatribe, HC venture would not be a good fit longer term for you either. The entire goal of HC venture is to fund science that will produce drugs that you can sell at high prices.

Alternatively, you could think about HC banking / venture as facilitating the process of helping patients. Helping a biotech raise capital could be the difference in life or death for patients if the funding allows them to develop a drug faster or study it in more indications simultaneously. Selling a biotech to a big pharma will help that drug reach many more patients must faster. Finance functions play an incredibly small role in that process, but to me it’s more of a “good impact” than any other industry group I know of.

Also, I think you have a one-sided view of the industry, at least re: drug prices. Quick food for thought: Innovation in pharmaceuticals is almost completely dependent on the potential profitability of drug development and the ability for this to attract private investment. If you want cures for more diseases, new drugs need to be able to command high prices. If you think this isn’t true and that the government could effectively fund drug development for major unmet needs, take a look at drug resistant infections/bacteria. It’s an enormous problem that is not being addressed, mainly because antibiotics are not profitable and thus there is no private investment in the field - so there is virtually no innovation. There is some price gouging in the pharma world, sure, but I always tell people that if you want to drastically cut drug prices across the board, you better pray that you never get a disease that we don’t currently have a cure for.

 
RexSimiiformes:
personally I find it pretty disgusting how the incentives of doctors, insurers and pharmaceutical companies are fucking over Americans with high and rising prices for drugs and insurance, poorer quality and less cost-effective care, the apalling rates of medical bankrupcies, etc.

Yup. Unbridled capitalism is a scourge on our democracy, but suggest any solution that seeks to mitigate the negative externalities of libertarianism or winner-take-all capitalism, and the Fox News boomers and Ben Shapiro wannabe intellectuals scream you're a socialist.

"I don't know how to explain to you that you should care about other people."
 

Alright, so I’ll bite: what’s your preferred economic model that’s ‘not socialism’ but avoids being the ‘scourge’ libertarianism/capitalism is on our economy?

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.
 
The Stranger:
Alright, so I’ll bite: what’s your preferred economic model that’s ‘not socialism’ but avoids being the ‘scourge’ libertarianism/capitalism is on our economy?

Capitalism with higher government regulation, plus a more progressive tax system to fund a larger social safety net, a la the Obama model which Fat Nixon has tried his hardest to undo just because.

"I don't know how to explain to you that you should care about other people."
 
The Stranger:
Alright, so I’ll bite: what’s your preferred economic model that’s ‘not socialism’ but avoids being the ‘scourge’ libertarianism/capitalism is on our economy?

And I'll put a question back to you and the monkey shit throwers. Do you think the American economic model is currently working? Sure, it's fine for you, me, and most of the people on this board. But 1 and 5 millennials are now expected to die with unpaid debt. Healthcare and education costs continue to skyrocket. Still very modest wage growth despite the longest economic boom in history. Wealth distribution has skewed enormously towards the 1% since the Great Recession.

How does this end if we don't change something radically? For all you Bernie haters (and I'm not a huge fan myself), what do you think happens when the MAGA crowd realizes Trump has conned them, and some guy on the other side of the aisle will promise them free shit to get back at Corporate America? "Economically anxious" MAGA nation doesn't hate handouts, they just hate them going to other people. That sounds like a winning electoral coalition to me.

Conditions are ripe for full-blown socialism in this country (on both the far right and far left), so I suggest we find a reasonable compromise between that and unbridled late capitalism before it's too late.

"I don't know how to explain to you that you should care about other people."
 

Your statement makes me think we need to ground ourselves before I answer. As such, I ask the following:

1) What is your a priori model for how healthcare should work? If that seems too broad, let me ask what the metrics are that you would use to assess the viability/defensibility of a given healthcare system?

2) What quantitative data (please spare me sharing an article unless it cites the original data) did you rely on to decide NHS performs better than our system?

3) Why would you assume that IB/VC/PE is morally defensible in other industries but not HC? If you think capital markets lead to unfair results in the latter, why would you assume they are fair in others.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.
 

This is not nearly as complex or morally challenging a concept as the long-winded posts by OP and commenters make it out to be.

  1. If you become a healthcare IB analyst, you aren't personally making the system worse. You're just along for the ride. That's putting it mildly.

  2. The moral issues in the system aren't as clear cut as you say. I'd explain, but I don't want to write a novel like everyone else has. Look up critiques of single payer, just for starters.

  3. If you want to make healthcare better, what better way to do it than to go inside the belly of the beast?

 
PteroGonzalez:
This is not nearly as complex or morally challenging a concept as the long-winded posts by OP and commenters make it out to be.
  1. If you become a healthcare IB analyst, you aren't personally making the system worse. You're just along for the ride. That's putting it mildly.

"I was just following orders, your honor!"

"I don't know how to explain to you that you should care about other people."
 

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