VETERINARY HEALTHCARE WORKERS ARE FEELING OVERWORKED AND OVERWHELMED
Mars Veterinary Health, a division within Mars Petcare, commissioned a new study to quantify the chronic shortage of veterinarians at companion animal hospitals. Mars owns and operates a network of 2,500 veterinary clinics, hospitals, and diagnostic labs across 21 countries.
STUDY: Pet Healthcare in the U.S. – Are there enough Veterinarians? (4.14.21)
- U.S. pet healthcare spending is predicted to increase 33% between 2019 and 2029.
- Nearly 2,000 baby boomer veterinarians are retiring each year.
- The number of U.S. veterinarians is increasing just 2.7% annually.
- More than 40,000 new veterinarians are needed to meet projected demand in 2030.
- A shortage of nearly 15,000 veterinarians will likely still exist by 2030.
ARE VETERINARY CONSOLIDATORS EXACERBATING THE VETERINARIAN SHORTAGE PROBLEM?
The acquisition of private-owned animal hospitals by corporate entities such as veterinary consolidators (many are funded by private equity firms) has accelerated over the last few years. Its estimated that 25% of all companion animal practices in the United States are now owned by corporate consolidators. The common perceptions about corporate-owned veterinary practices is that these large national corporations focus too much on the bottom line (THE DESIRE FOR PROFITS) and that veterinarians are under pressure to see high numbers of patients (DOCTORS SPENDING LESS TIME WITH PATIENTS).
According to a 2020 study (The Voice of the Veterinary Community) by the North American Veterinary Community (NAVC), a non-profit organization that provides support services for veterinary healthcare professionals, found that the 2nd leading stressor for veterinarians was “the pressure to adhere to appointment time restrictions.”
The business model for veterinary consolidators requires a Support Center which includes a large infrastructure of managers and support teams. The Support Center operates from a remote location. In many cases, this facility is located in a different state, not in close proximity to the veterinary practice that is owned and operated by the consolidator.
According to Liz Hughston, President of the National Veterinary Professionals Union:
THE DOWNSIDE TO VETERINARY CORPORATION:
“It’s nearly impossible to voice your concerns owing to the multiple layers of management. She explained that this is extremely problematic for an industry in which many employees are underpaid and feel undervalued.”
IS THE GROWING USE OF PRODUCTION-BASED COMPENSATION CAUSING BURNOUT AMONG VETERINARIANS?
Approximately 2 out of 3 full-time associate veterinarians are paid on “production” (commission), according to recent research conducted by the American Animal Hospital Association (Compensation and Benefits, Ninth Edition: AAHA).
The growing use of production-based compensation for veterinarians has coincided with the increased veterinary consolidation, as corporate consolidators continue to roll-up practices to enhance value and drive higher earnings.
However, a few new hospital group startups including MODERN ANIMAL are bucking this trend:
“For vets, Modern Animal promises better work-life balance, with flexible scheduling, predictable hours and a compensation plan that replaces the revenue or production-based compensation model, where a vet’s salary depends on how many expensive surgeries or treatments he or she performs. Modern Animal instead uses set salaries and gives its vets equity in the company, according to forbes.com.”
- CEOs of Veterinary Consolidators and Hospital Groups
- Study conducted by CARE for Pets™ reveals that the majority of veterinary consolidators are led by non-veterinarians.
- How Veterinary Consolidators Are Building a Future-Proof Enterprise (1.27.21)
- “Consolidating practices means merging different cultures, workflows and systems, which is a significant stressor for employees. If not managed properly, the frustration and uncertainty caused by the changes will result in increased staff turnover post-acquisition.”
- Does Corporate-Owned Veterinary Practices have a High Employee Turnover Problem?
- Approximately 70% of the job listings on the AVMA Veterinary Career Center and other job sites come from corporate or consolidated practices. In contrast, about 35% of veterinary associates are employed by corporate practices, according to JAVMAnews.
- Buyers’ Purpose vs Employees’ Purpose: “There is a tremendous mismatch between buyers’ purpose and employees purpose. In the case of consolidation backed by private equity, most buyers’ purpose is to make money for their investors. Veterinary teams’ purpose is to help animals. There is a conflict of values that burns people out and drives them away” according to the founder of Galaxy Vets (the only consolidator that uses ESOP to acquire veterinary practices).
- Impact of Private Equity in Healthcare on Patients, Doctors, Support Staff and Markets in Human Medicine
- Understanding private equity’s growing investments in human medicine will provide additional insight into its potential impact to the veterinary healthcare system.