Competition in Veterinary Medicine
The acquisition of private-owned animal hospitals by corporate entities such as veterinary consolidators has accelerated over the last few years and has potentially serious implications for competition and pet healthcare costs. Competition in the pet care industry benefits consumers because it helps contain costs, improve quality, and encourages innovation.
Veterinary Hospitals are Being Bought by Corporations at Unprecedented Numbers, and Costs Increase (2.8.20)
This YouTube video was created by Krista Magnifico, DVM, a small animal veterinarian and the owner of Jarrettsville Veterinary Center which is located in Jarrettsville, Maryland.
- How will the increase in corporate owned practices change the face of veterinary care. Simple, costs will increase as competition decreases. Pets and their families will increasingly not be able to afford care. Especially in the areas of emergency and specialty care.
THE HUB-AND-SPOKE MODEL:
The Hub & Spoke business model in veterinary medicine resembles the spherical shape of a bicycle wheel. In the middle of a wire-spoked wheel is what is known as the hub (a specialty and emergency pet hospital) . It is this hub that allows each of the spokes (a large integrated network of general practices), sprawled out in all directions around the wheel, to meet at a centralized location at the center of the wheel.
In the above YouTube video (starts from 5:00 to 5:30), Dr. Magnifico briefly discussed the increasing use of the ‘Hub and Spoke’ model by corporate entities such as veterinary consolidators and the impact on competition and how these corporate consolidators can control the price of veterinary services within a geographic area.
- “There are dozens of corporations buying veterinary clinics accumulating 10s to 100s of those veterinary clinics and then they of course control multiple clinics, they can control the price of the services they provide. Not only that but these days they are buying little satellite doctor practices and then they are buying the specialty practices so they own everything in the hub or everything in the area. If you need any surgery and you want a boarded surgeon, you end up being with one of these corporate practices and then the bottom line dictates a lot of what goes on.”
POTENTIALLY SERIOUS IMPLICATIONS IN THE COMING YEARS FOR VETERINARY MEDICINE IN THE U.S.
UK competition regulator questions veterinary merger (2.22.22)
- The UNITED KINGDOM in Europe has one of the most concentrated veterinary markets (practices are owned and operated by a small number of corporate groups) in the world.
- The competition regulator stated “the CMA has received a number of complaints in recent years about higher prices or lower quality services as a result of too many vets’ practices in the same area being under the control of a single company.”