The corporatization of veterinary medicine has steadily accelerated over time as corporate entities are emboldened by the success of rollups. For example, in just over 30 years, VCA Antech went from a small company in California to a large corporation that owns more than 800 animal hospitals in North America. In addition to the hospitals VCA Antech owns, it provides laboratory services and imaging to clinics all over the country.
One of the most notable veterinary acquisitions has been by Mars Inc. Most would never expect a candy company to enter the acquisition world. Two years ago, however, Mars acquired VCA Antech, directly after purchasing BluePearl, Banfield Pet Hospital, and Pet Partners, essentially monopolizing a large part of the veterinary market. Mars' acquisition was so extraordinary that an antitrust lawsuit was filed against the corporation by the Federal Trade Commission (FTC), and it was required to divest 12 veterinary hospitals to be able to complete the purchase. After the deal was finalized, Mars now owns approximately 2,000 animal hospitals throughout the U.S. and Canada. In addition, more than one-third of Mars employees work in its veterinary section, making this candy company a large point of concern for many veterinarians.
Keeping humanity and ethics in the industry
The relationship between client and veterinarian is one of the most important parts of the practice of veterinary medicine. Pet owners want to know they can trust the advice they receive from their veterinarian. Some of these foundational tenets can be lacking in a corporately owned practice. Generally speaking, corporations excel at transactions, although veterinary medicine is much more than a transactional relationship. Many clients find it challenging to trust the advice they receive from corporately owned practices because of a perceived conflict of interest. That company may own various other related entities, such as dog food brands and diagnostic testing laboratories, which can create an incentive for the corporate practice to recommend products, services, or treatments not in line with their patient's best interest, but rather, in accordance to their own economic interests. Corporate entities also come with corporate requirements, which greatly impact the veterinary services they supply. Many pet owners have contacted the Independent Veterinary Practitioners Association (IVPA) to report instances of being billed for unnecessary tests and procedures that were required due to corporate policies. Specifically, there have been reported instances of over-vaccination of pets due to the income vaccines provide, which has shown to be extremely detrimental to a pet's health.
Controlling outcomes affects the health of your business
Corporate-owned practices have also instituted software programs to standardize the care of their clients' pets, rather than personal diagnostics that allow for veterinarians to use their intuition and education to treat patients. Many corporate practices have instituted procedures and policies that can alienate both veterinarians and clients alike. Examples include the implementation of sales targets and average patient charge rules, forced attendance at seminars teaching how to up-charge clients, and the enforcement of rigid pet drop-off policies minimizing or eliminating client/veterinarian interaction.
If you decide to enter into an agreement with a corporate entity, it is highly recommended you seek knowledgeable counsel. Corporate ownership can provide you with more flexibility and can relieve the burden of management. However, if the deal is not structured correctly, or if the corporate buyer is not a good fit, entering into such an agreement can cause more stress for you and your employees. In addition, you need to consider your own personal goals as a veterinarian. Corporate ownership may allow you to focus more on patient care and less on running the business. Corporations have the leadership experience and resources to grow a veterinary practice without the financial and legal risk of being the sole owner. Moreover, a large-scale veterinary corporation allows you and your employees access to data sharing technology and other veterinarians, which can improve the quality of care you provide to your patients. However, the benefits of participating in a corporate veterinary entity don't ensure a better work experience, employees, or client relationship.
