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Category: Veterinary

Chewy to Enter Veterinary Practice Market in 2024

January 6, 2024 Admin

Chewy, Inc. (NYSE: CHWY) recently ANNOUNCED the launch of its first veterinary practices under the brand name “Chewy Vet Care.”…

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Posted in: CHEWY, Hospital Groups, Veterinary

First-of-its-Kind Study on Perceptions and Satisfaction of Veterinarians Working at Corporate vs. Privately Owned Hospitals

December 10, 2023 Admin

A first-of-its-kind study recently published by the Journal of the American Veterinary Medical Association (JAVMA) seeks to ascertain the views…

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Posted in: Veterinary

FTC Chair Discusses Anticompetitive Concerns at AVMA Forum

November 12, 2023 Admin

Lina Khan, chairman of the U.S. Federal Trade Commission (FTC), delivered REMARKS in a keynote address at the 2023 Veterinary…

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Posted in: FTC, PRIVATE EQUITY, ROLL-UP, Veterinary

Veterinary Consolidator Grows Network of Hospitals By More Than 50% In Past Year

October 20, 2023 Admin

Veterinary Practice Partners (VPP), a leading veterinary consolidator recently ANNOUNCED that its network of animal hospitals has grew more than…

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Posted in: Hospital Groups, PRIVATE EQUITY, Veterinary

Urban Animal to Become State’s First Worker-Owned Veterinary Co-Op

October 8, 2023 Admin

Urban Animal, a veterinary network of 3 practices located in Seattle, Washington, has recently ANNOUNCED its reorganizing as a limited…

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Posted in: COOPERATIVE, Veterinary

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

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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 -- market share has tripled in the last 6 years. Its largely invisible to most pet owners because consolidators view the corporatization of a practice as a marketing liability. Today, nearly 1 out of 3 general veterinary practices in the U.S. are owned by corporate consolidators -- accounts for 40-50% of all client visits (often own larger practices). Corporate practices will not return to being independently owned again -- irreversible unless consumers push back against industry consolidation.
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.
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 worker-owned veterinary cooperative "does not pay any employee based on production."

 

IS INDUSTRY CONSOLIDATION THE ROOT CAUSE OF THE PROBLEM?
Over the next decade, less than 10 corporate groups will most likely own, operate and control approximately 6 out of every 10 general practices representing 75% of the total general practice market based on current u.s. trends and abroad -- consolidated market with many complaints of higher prices and lower quality of care. The end of consolidation starts to happen when the big consolidators start buying each other-- very few larger independent practices left to acquire.

 

AFFORDABILITY CRISIS: VETERINARY CARE PRICES RISING RAPIDLY
Today, the news media reports that the average cost of veterinary care has increased about 10% in the past year. Historically 3% -- highly cited study predicted a 3% annual increase thru 2029. However some practices have not raised prices at all, and others raised prices 20, 30 or 40 percent year over year -- prices change frequently at corporate practices with no notice to clients or staff. Pet insurance companies are seeking double-digit premium increases up to 50% or more. Corporate practices often offer higher salaries, benefits and signing bonuses to employees -- retention bonuses up to $250k to doctors. Labor is the largest cost for veterinary practices -- about 51% of gross sales.

 

IS PRIVATE EQUITY SADDLING VETERINARY SECTOR WITH DEBT?
Since the start of 2017, private equity firms have invested more than $45 billion in the U.S. veterinary sector. Consolidators often use high levels of debt to acquire as many hospitals as possible -- "serial acquisitions." The sale price of hospitals has skyrocketed. The use of financial leverage and valuation arbitrage have caused sale prices to more than double over the past five years -- outbid independent doctors paying 2 or 3 times more. This could jeopardize their ability to navigate a downturn -- rising interest rate environment.

 

FIND THE BEST CARE FOR YOUR PET - COMPANION PLATFORM™
CARE for Pets™ officially launches the Companion Platform™ (COMPANION™) -- a pet health platform to help pet owners find the best possible care for all companion animals. Our research reveals nearly 1 out of 2 general practices fail to display on their website the nearest 24/7 veterinary emergency hospital within their contact list - increase in trip distance may result in a delay in care when minutes matter, especially in a life-threatening emergency.

 

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 -- doctors feel more pressure to generate revenue and see more clients per shift. A common strategy for consolidators is to increase revenue by raising prices after an acquisition -- maximizing profitability. Studies in human medicine show that private equity takeovers are linked to rising costs for patients and sinking quality of care. Understanding private equity investments in human medicine will provide insight into its potential impact to veterinary medicine.
Common Perceptions of Corporate Veterinary Practices

WHO OWNS, OPERATES AND CONTROLS THE PRACTICE?
CARE for Pets™ officially launches VERIFIED,™ the first and only veterinary practice ownership verification online tool for the pet care industry -- do you know who owns your vet? Consolidators buying hospitals often require the selling doctor to stay at the veterinary practice for 1 to 4 years after the purchase and may fail to disclose change of ownership to pet owners -- advertising is ethical when there are no false, deceptive, or misleading statements or claims.

 

HEIGHTENED SCRUTINY OF PRIVATE EQUITY M&A DEALS
Today, 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" -- may reduce competition within a consolidated local market.
FTC Intervenes PE Acquisition Citing Antitrust Concerns

 

EXIT-DRIVEN STRATEGY: BUYING UP HOSPITALS TO SELL
Roll-ups, a common strategy for consolidators, buys many veterinary practices and combines them into a larger organization to obtain a higher valuation -- grow rapidly. The entity is typically resold within a short-term investment horizon of 3 to 5 years to another corporate consolidator for a substantial profit -- process is repeated until there are no more larger independent practices left to acquire. Hospital groups sell for 100s of millions of dollars -- many times over $1 billion.
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 -- stifle public debate about the effects of rapid veterinary consolidation.
Common Employee Complaints of Veterinary Consolidators

 

ARE CONSOLIDATORS EXACERBATING VET SHORTAGE?
First-of-its-Kind study reveals that veterinarians working in corporate practices reported feeling more pressure than those in private practice to generate revenue and see more clients per shift -- doctors sometimes dread or fear when they learn that their hospital may be sold to a large corporation. There's a tremendous mismatch between employees' purpose and consolidators' purpose -- conflict of values cause burnout and drives workers away from the profession.

 

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