Why a happy veterinary profession needs independent practices

Does it seem so unlikely we might suffer from an epidemic of unhappy veterinarians?

Once upon a time, there was a little girl who lived on a lovely cul-de-sac in American suburbia. She loved animals and knew for sure she’d want to be a veterinarian when she grew up. She worked hard and got perfect grades, volunteered at her local shelter, and worked her way through college until she was finally admitted to veterinary school.

“We can’t promise to make you rich, but we will make you smart,” they said at the veterinary school. While there, she learned a lot about everything she ever dreamed of knowing. She tended to patients with “enormous care” in gleaming buildings, learning only the “best medicine.”

Finally, it was time to graduate and enter the great big world. She now had to get her dream job and become a happy veterinarian.

But the dream job was hard to find. She wanted to provide enormous care and practice the best medicine, but she needed to pay back the veterinary school, too. She looked and looked until one day, a fairy godmother appeared in a blue Lexus wearing Jimmy Choo shoes and an Apple Watch.

She said, “I was just like you until I found my dream job at BestVets. I’m now a happy veterinarian because I was able to provide enormous care, practice the best medicine, and pay back the veterinary school, too.” Then she gave the now-grown girl a shiny brochure with lots of happy veterinarians on it. So the young doctor went to work in a gleaming building where she was given a high salary, pretty equipment, the right staff, and lots of patients to see.

But she never became a happy veterinarian. Sure, she paid back the veterinary school, but she was always sad. Most of her clients couldn’t afford her enormous care and those who needed the best medicine went to see the specialist. What’s more, BestVets kept changing rules, adding tasks, and promoting people who weren’t veterinarians. Worse still, her fairy godmother kept telling her she wasn’t working hard enough at generating income. She became so depressed, she wished she had never become a veterinarian.

“Where did I go wrong?” she asked herself. “Should I become a specialist? Work for a smaller practice?” She’d never even thought about running her own practice, but after all the rules and tasks and unfairness, she was starting to think about a new dream—doing it herself.

A children’s story… or cautionary tale?

It’s a fairy tale, I know. But is it so far off the mark?

Ask a millennial veterinarian and I assure you they’ll know someone in the protagonist’s dilemma—themselves, perhaps. Now calculate the rate at which nonindependent practices are growing, and project that into the future. Does it seem so unlikely we might suffer from an epidemic of unhappy veterinarians?

To be sure, there are plenty of veterinarians with the appropriate constitution for employment at nonindependent practices. Perhaps there are even more veterinarians who prefer to work in environments where non-veterinary management predominates than those that do. Nevertheless, it’s true; the trend toward corporate practice ownership, coupled with a higher debt burden, pushes those with fewer choices into positions that might not suit them.

And let’s be honest: Most of us who obtain higher degrees don’t do well with the deprivations of independence imposed by absent employers. We believe we’ve gone to school long enough to make our own clinical decisions. We bristle at the notion that non-veterinarians get to set the rules for our patients.

The independent variable’s erosion

I like to think of veterinarians as independent variables. Resolutely self-possessed amid the industry swirling around us, we continue to define our profession in spite of the many incursions of non-veterinarian owners. We still exert enough force to bend the profession to our collective will. But how long will this last?

Not long, say some proponents of consolidation and corporatization of practice ownership and the vet industry writ large. Veterinarians don’t really want to manage anymore, they say. They claim we veterinarians see the writing on the wall. We understand that in this world of extreme specialization, blue-suited business leaders are better equipped to manage the more entrepreneurial aspects of veterinary medicine. We, the scrub-clad, allegedly prefer to be led.

Rethinking the assumptions around ownership aspirations

To some extent it’s true—most of us claim we don’t want to take charge. Ask veterinary students and they’ll readily admit they don’t want to be practice owners. Once out in the real world, however, that perspective is prone to shift.

In part, I believe the widespread reluctance to own prevails because entrepreneurship/management is rarely presented in terms of its impact on patient care. Instead of encouraging it as a fundamental path to better medicine, our profession’s groupthink (starting with the veterinary school curricula) disregards its almost universal relevance, treating it more as a specialized subject best left to the “business minded” alone.

We have to rethink our assumptions around ownership and entrepreneurship. When these values are no longer expected or encouraged, corporations will happily ride in to take our place. In so doing, they create a new infrastructure, which makes it hard for those who’ve only later decided they’re unhappy with the corporate status quo to take back the reins.

Why veterinarian ownership matters, money-wise

Think about it this way: Fewer veterinarians on top mean more veterinarians in the middle. The new corporate structure effectively makes veterinarians the middlemen, cutting into our profits and building a vast middle class in our profession. All this aggravates the depressing debt-to-income ratio that attracts younger veterinarians to corporate practices in the first place. Oh, the ironies!

Not only that, but more big mouths to feed means higher prices at the reception desk, exacerbating the pet health-care affordability crisis, which directly impacts our job satisfaction and also attracts other mouths to the pie (i.e. the pet health-care financing industry). Sure, the pie has been getting bigger as of late (people love their pets!), but our slice is getting disproportionately smaller.

Are they truly better practice owners?

I mean, are they really so much better than us? Are they masters of increased productivity? Do the greater profits they generate by virtue of their genius expertise justify their presence? Do they add anything to our industry, save an extra layer of management that ostensibly improves our quality of life by relieving us of the burdens of ownership?

I think not. Their expertise can be helpful, as any specialized professional influence might be, but only to a limited extent. The degree to which corporate players have come to dominate the veterinary industry at the level of practice ownership is not justified economically when you look at what veterinarians have collectively lost in the bargain.

Sure, some veterinarians are getting richer as a result of high-priced buyouts. But for every one veterinarian that sells out big, an incommensurate number of his or her colleagues are expected to lap up milk while the non-veterinarians enjoy their cream. Indeed, the whole generation that follows these buyouts will have fewer opportunities to rise to the top.

And what about our patients?

Ultimately, everything comes down to patient care because enormous care and best medicine are what make us tick and be happy veterinarians. Ironically, it’s the great promise corporate medicine made when they bought us out: You’ll be free to concentrate on patient care. But has this really materialized?

I think not. If anything, it’s the one area corporate medicine has most disappointed us. They’ve taken the concept that “What’s better for the patient is better for the practice” to an uncomfortable extreme by calling too many of the shots on what’s best. “We won’t tell you how to practice” clearly doesn’t apply to everyone.

Can veterinarians turn the tide?

Though the tide seems relentless, we still have a chance. When faced with the prospect of a middleman’s existence, plenty of ownership deniers (like I was) will find ourselves asking if corporate employment is what’s best for ourselves, our colleagues, and our profession.
We will resist.

As long as we collectively remain steadfast in our resolve to stay in a profession run by the professionals whose patient care and job satisfaction serve as its cornerstone, we can weather the onslaught of interlopers who claim to know what we want and our patients need. And we’ll be happier. I promise.

Patty Khuly, VMD, MBA, owns a small animal practice in Miami and is a passionate blogger at drpattykhuly.com. Columnists’ opinions do not necessarily reflect those of Veterinary Practice News.

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2 thoughts on “Why a happy veterinary profession needs independent practices

  1. Dr Khuly,
    As a Baby Boomer who is turning 60 and beginning to implement an exit strategy. I have found it very difficult to financially justify selling my practice to my associate. Corporate suitors all a willing to pay up to 3-4 times gross. This is unrealistic for my associate, but how do I turn away the additional million the corporate group is willing to pay above what my associate can pay. The flip side is I know that our very special little high quality low volume practice will loose most of its self in a corporate take over. What to do?

    1. I have seen the trend way too many times. A veterinarian owner who has worked hard all his life, ready to retire now finally gets nice retirement bonus by selling to a corporate paying 5-8 times of Earnings Before Taxes & Depreciation (EBITDA)- not to be confused by 3-4 times gross.

      These corporate buyers are essentially called consolidators and their sole purpose is to spin this sample into even more profitable turnaround for their investors by selling a group of practices to another corporate.

      I think a lot depends on seller veterinarian and the kind of legacy they want to leave- whether they want to become unknown to their clients after they leave or whether they still want to be remembered adorably by their loyal clientele.

      IMHO, it also depends on financials involved with the deal. It is almost certain, the consolidator will ask you to stay at the practice as an associate for minimum 3 years and ensure the same level of profitability while you are there. In certain instances they might even offer a generous payout after 1 year of sale if you increase the profitability.

      My advise to sellers to consolidators is as such:
      – be prepared to work in your own practice as an associate for minimum 3 years.
      – be prepared to take a pay cut for those 3 years which depending upon the circumstances might be much lower than what you were paid when you owned the practice
      – be prepared to see the profitability gingery management make decisions at your own practice regarding staffing and other things while you are reduced to the role of an onlooker.
      – in the end if you do the math, the lower amount you get paid as an associate for 3 years is what you got paid upfront at the time of the sale plus you worked helplessly at your own practice where the corporate diluted your legacy right in front of your own eyes!

      Ultimately, it’s the practice owner’s decision but in my mind it’s a no brained which way I need to go when I sell my practice.