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UK’s Antitrust Watchdog Launches Review into Rising Prices in Veterinary Services Market for Pets

September 8, 2023 Admin

The United Kingdom is one of the most concentrated veterinary markets in the world where practices are owned and operated…

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Posted in: Affordability, Consolidation, PRIVATE EQUITY, Veterinary

Thrive Pet Healthcare Announces Closure of Emergency Hospital in Brighton, NY

August 30, 2023 Admin

Veterinary Specialists and Emergency Services (VSES) in Brighton, New York (previously the greater Rochester region’s only 24/7 animal hospital) has…

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Posted in: FTC, Hospital Groups, PRIVATE EQUITY, Thrive Pet Healthcare, UNIONS, Veterinary

Trupanion: Growing Number of Hospital Groups to accept Direct Payments

August 4, 2023 Admin

Trupanion (NASDAQ: TRUP), a leading pet insurance provider, recently ANNOUNCED that following a series of newly signed agreements, it now…

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Posted in: Hospital Groups, Insurance, TRUPANION, Veterinary

A Call to Action: Reclaiming Veterinary Medicine from Big Corporations

July 12, 2023 Admin

It’s time for veterinary professionals to take back veterinary medicine (7.10.23) https://www.dvm360.com/view/it-s-time-for-veterinary-professionals-to-take-back-veterinary-medicine COMMENTARY featured on dvm360 July 2023, Volume 54,…

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Posted in: Consolidation, Hospital Groups, PRIVATE EQUITY, Veterinary

Leading Digital Pet Health Company Abruptly Shuts Down

July 2, 2023 Admin

Fuzzy Pet Health (Fuzzy), a pet healthcare startup, has abruptly shut down, leaving employees and customers in the lurch according…

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Posted in: Telemedicine, Veterinary

JAB Holding Company acquires pet insurance provider Pumpkin

June 16, 2023 Admin

JAB Holding Company (JAB) has recently ANNOUNCED that it has acquired a majority interest in Pumpkin Insurance Services Inc. (Pumpkin),…

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Posted in: Insurance, JAB

Thrive Pet Healthcare appoints new Chief Executive Officer

May 25, 2023 Admin

Thrive Pet Healthcare, a veterinary network of 400 primary, acute, and specialty hospitals, recently ANNOUNCED the appointment of Tad Stahel…

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Posted in: Hospital Groups, PRIVATE EQUITY, Thrive Pet Healthcare, Veterinary

NAPHIA Releases State of the Industry Report 2023, Insurance Premiums Rise

May 11, 2023 Admin

The North American Pet Health Insurance Association (NAPHIA) recently RELEASED its annual State of the Industry (SOI) Report for 2023.…

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Posted in: Insurance

Leading Pet Insurance Provider may Increase Premiums 18% by Year-End

April 10, 2023 Admin

Updated July 3, 2023: Trupanion (NASDAQ: TRUP), a leading pet insurance provider, recently disclosed on an earnings call that the…

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Posted in: Affordability, Insurance, TRANSPARENCY, TRUPANION

Non-Disparagement Clauses On The Rise In Veterinary Industry

March 24, 2023 Admin

Rising corporate consolidation in the veterinary profession has been accompanied by an increasing use of non-disparagement clauses designed to prevent…

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Posted in: TRANSPARENCY

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  • UK’s Antitrust Watchdog Launches Review into Rising Prices in Veterinary Services Market for Pets September 8, 2023
  • Thrive Pet Healthcare Announces Closure of Emergency Hospital in Brighton, NY August 30, 2023

THE CORPORATIZATION OF VETERINARY MEDICINE

The acquisition of private-owned animal hospitals by corporate entities such as veterinary consolidators has grown exponentially since 2011, and accelerated in 2017. Its largely invisible to most pet owners because consolidators view the corporatization of a practice as a marketing liability. This has potentially serious implications for competition, pet healthcare costs and may worsen the labor shortage of veterinarians and veterinary technicians.
Are Consolidators Helping or Hurting Veterinary Medicine?

MAJORITY OF CORPORATE PRACTICES LED BY NON-VETERINARIANS
Study conducted by CARE for Pets™ reveals that the majority of consolidators are led by non-veterinarians --- doctors are more often managed by nonveterinary professionals with no experience in the pet medical world. These corporate entities employ a large infrastructure of managers and support teams and require significantly greater revenue to be profitable. Today, approximately 1 out of every 4 general veterinary practices in the U.S. are owned by corporate consolidators.
CEOs of Veterinary Consolidators and Hospital Groups

 

IS PATIENT CARE IMPACTED BY COMMISSION-BASED PAY?
Today, approximately 2 out of 3 full-time associate veterinarians are paid on "production" -- how much revenue they bring into the practice. Compensation models for veterinarians consist either of a fixed salary, salary plus commission, or 100% commission (doctor pay up to 25% of sales) -- doctors may feel obligated to see lots of patients in a day. A new startup is bucking the trend on commission pay and will compensate doctors "without the pressure of production-based salary."

 

IS INDUSTRY CONSOLIDATION THE ROOT CAUSE OF THE PROBLEM?
A new hospital franchise offered by a leading brick-and-mortar retailer says it "will help many veterinarians who want to own a practice and otherwise couldn’t because of the consolidation within the industry." Over the next decade, a small number of corporate groups (less than ten) will most likely own, operate and control approximately 6 out of every 10 general practices based on current u.s. trends and abroad. The pace of consolidation will slowdown as veterinary consolidators buy each other -- very few independent practices left to acquire.
PetSmart to Offer In-Store Practice Franchise to Veterinarians

 

AFFORDABILITY CRISIS: VETERINARY CARE PRICES RISING RAPIDLY
Today, the average cost of veterinary care is rising approximately 10% per year (historically 3% -- a highly cited study predicted a 3% annual increase thru 2029). However, some practices have increased prices up to 20% or more. Increasing numbers of practices are now corporate owned (requires large support center) and needs significantly greater revenue to be profitable. Corporate practices typically offer higher salaries, benefits and signing bonuses to employees (retention bonuses up to $250k to doctors) -- total payroll expense represents about 51% of gross revenue.

 

IS PRIVATE EQUITY SADDLING VETERINARY SECTOR WITH DEBT?
Since the start of 2017, it's estimated that private equity firms have invested more than $45 billion in the U.S. veterinary sector. Private equity firms often use significant amounts of debt financing (leveraged buyouts) to buy as many animal hospitals as quickly as possible (roll-up strategy). The sale price of practices has skyrocketed (the use of financial leverage and arbitrage have enabled prices to more than double) over the past five years. During an economic crisis, such as a recession, this could potentially jeopardize their ability to navigate a downturn.

 

CASE STUDY: Lack of Ownership Transparency in Veterinary Practices

Study conducted by CARE for Pets™ reveals many veterinary consolidators communicate misleading statements about ownership information on their individual practice websites which is most likely to create a false impression to pet owners that the practice is independently owned and locally operated. Most veterinary practices acquired by corporate consolidators often retain their original company name and may purposely avoid corporate ownership identification -- hide ownership.
Is Your 'Local' Animal Hospital Corporate-Owned?

COMMON PERCEPTIONS ABOUT CORPORATE PRACTICES
There is a common perception in the pet care industry that many corporate-owned veterinary practices prioritize profits over patient care. A common strategy for veterinary consolidators (most are owned by private equity firms) is to
increase the cost of care after a private equity acquisition -- studies in human medicine show that private equity takeovers are associated with rising costs and sinking quality of care.
Common Perceptions of Corporate Veterinary Practices

INCREASING TRANSPARENCY IN PRACTICE OWNERSHIP
CARE for Pets™ officially launches VERIFIED,™ the first and only veterinary practice ownership verification tool for the pet care industry. The VERIFIED™ searchable database will enable pet owners to verify the current owner of a corporate-owned veterinary practice -- consolidators often retain the original name and branding after the acquisition.

 

WILL PRIVATE EQUITY FIRMS TAKEOVER PET INDUSTRY?
Today, private equity (PE) firms control thousands of veterinary practices, major pet retailers, pet insurance companies and pet product manufacturers. Other pet care startups are founded and led by former employees of private equity firms and it is not disclosed in a transparent manner. Understanding private equity investments in human medicine will provide insight into its potential impact to the veterinary healthcare system.
Private Equity Investments in Pet Care Industry

HEIGHTENED SCRUTINY OF PRIVATE EQUITY M&A DEALS
Today, approximately 3 out of 4 specialty and emergency hospitals in the U.S. are owned by corporate consolidators -- State legislator asks Federal Trade Commission (FTC) to scrutinize closure of emergency hospital. The FTC says "private equity firms increasingly engage in roll up strategies that allow them to accrue market power off the commission’s radar."
FTC Intervenes PE Acquisition Citing Antitrust Concerns

 

BUYING TO SELL: IRREPARABLE HARM TO PET INDUSTRY?
Roll-ups, a common strategy for consolidators, buys several practices and combines them into a larger organization in order to obtain a higher valuation. The combined entity is resold (short-term investment horizon) to another industry consolidator at a substantial profit and the process repeats. Hospital groups can sell for 100s of millions of dollars (often over $1 billion, and annual earnings can more than double).
Flipping Hospitals Reap Large Profits for Consolidators

CONSOLIDATORS PRIORITIZING PROFITS OVER PATIENTS
Our research shows that common complaints among employees of corporate-owned veterinary practices say their employers prioritize short-term profits -- numerous red flags. Reading company reviews at popular job websites about the corporate consolidator that owns the individual practice can provide greater insight into the company's true priorities, work conditions, culture, and leadership. However, gag clauses are on the rise which may silence doctors and staff.
Common Employee Complaints of Veterinary Consolidators

 

ACCELERATE POSITIVE CHANGE IN PET CARE INDUSTRY
As "the internet's most trusted consumer advocate for the pet care industry,"™ CARE for Pets™ "seeks to empower pet owners to effect positive change in the pet care industry in order to provide the best care for your pet."
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