8 ms·

Vet clinics became very popular private equity targets recently. One of the people I know in PE described their profit margins as being surprisingly high even

Vet clinics became very popular private equity targets recently. One of the people I know in PE described their profit margins as being surprisingly high even before PE roll-ups. They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. There was a secondary rush where people were trying to acquire vet clinics in anticipation of flipping them to PE roll-ups later. My local vet seems to have gone down this slide. A long time ago it felt like a staff that really just cared about animals and had good prices. On my last visit it felt like I was bombarded with practiced pitches for different products and services at every step of the process. They even added some expensive vitamin product to my bill despite me declining it during the service. They removed it when I caught it on the bill before walking out the door, but only after a last attempt at pitching me on it. I could tell they were heavily incentivized to sell as much as possible. I didn't go back, but at this point I don't know where else to go.

amelius 4y ago
Dentists will go down the same route.
- pclmulqdq 4y ago
  Dentists seem to generally be decent businesspeople, while doctors and vets aren't, so they may resist PE buyouts for a while.
  - pc86 4y ago
    I'm curious why this is as it seems to have been the case in my experience as well.
    - pclmulqdq 4y ago
      My guess is that nobody becomes a dentist because they love teeth. They do it to have a stable business. Conversely, people become vets because they love animals, and people often become doctors for the prestige or the ability to help people.
      - vrc 4y ago
        Also in my experience it’s very standard for dentists to quickly go out on their own —- many towns will have multiple dentists and none to one doctor or vet clinic. Then again I’m seeing places like Aspen Dental popping up all over the place so who knows
  - ROTMetro 4y ago
    Dentists are the worst up sellers of all. Before moving, I had all of my family checked out at the dentist we had for years. When we moved our new dentist found a lot of 'work' that needed to be done. When we asked him to consult with our old dentist to compare notes it got real awkward.
legitster 4y ago
I worked with people who did (human) clinic roll ups. Part of the issue at hand is that doctors and physicians are notoriously bad businesspeople. So once they build up a big enough practice, a lot of them will jump on the chance to sell the side of the business that they hate to a management firm.
- banannaise 4y ago
  The inevitable march of capitalism: experts in every field are gradually relieved of their decision-making power by experts in finance, until finance guys control everything.
  - lordnacho 4y ago
    But you can have capitalism without financialization.
    - Ericson2314 4y ago
      "financialization" is more a boogieman than a solid concept. More competition (the best interpretation of "de-financialization" I can imagine) is not very solid solution for something like healthcare (or yes pet care) where the demand being inelastic makes "ransoming" easy.
      - shkkmo 4y ago
        Markets can work fine with inelastic demand if there is adequate information, freedom of choice and proper regulations.
        WaxProlix 4y ago
        More like, could than can as far as I can see. Markets kick ass under certain circumstances, but in some areas it's almost impossibly hard to achieve those circumstances.
shakes_mcjunkie 4y ago
> They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. I searched recently for a nearby vet in Chicago and probably out of 15, only 1 was not owned by a larger chain or company. Big bummer. It's hard to trust that a vet that's part of a chain isn't going to have perverse incentives when it comes to caring for my pets. Also, another thing that I imagine is driving up vet prices is the unregulated pet insurance industry.
- mirntyfirty 4y ago
  True although some of the large PE firms do their best to hide the affiliation.
  - shakes_mcjunkie 4y ago
    Oh yea I'm sure. Many of the chains I'm not sure what type of company they were. But just the fact that vets aren't a small, locally owned businesses concerns me. I'm sure some of the larger chains are either PE firms or owned by PE firms.
- dhosek 4y ago
  My brother owns Merrick Animal clinic in Brookfield. The other thing to investigate would be independent vets doing house call practices which, assuming you can find one, would be cheaper than a clinic and much less stressful for the animals (my brother did that before buying Merrick 14 years ago).
  - shakes_mcjunkie 4y ago
    Oh interesting I'm going to look into a house call vet!
  - zippergz 4y ago
    We have used house call vets for many years, and they are wonderful in terms of experience for the animals. However, in my experience they are universally far more expensive than clinics (which we still go to sometimes if it's semi-urgent and our mobile vet is not available).
Johnny555 4y ago
Vet clinics become very popular private equity targets recently. Probably because more and more people are buying pet insurance -- our insurance paid nearly $20,000 to Sage for my dog's cancer treatments. I doubt I could afford emergency vet treatments without insurance.
- shakes_mcjunkie 4y ago
  Yes. Pet insurance is an unregulated market and also has to be driving up prices.
  - lotsofpulp 4y ago
    I would have guessed increases in demand for healthcare for pets greater than supply of healthcare for pets to be driving up prices.
whimsicalism 4y ago
This is how markets function - rising profits for vets will encourage more providers to enter the market. e: Sorry, sometimes forget what kind of science denialism is cool now. Climate denial out, economics denial in.
- markovbot 4y ago
  I'm sure that'll be a huge relief to all the people who no longer afford healthcare for their pets. Maybe they simply should have not been poor!
  - whimsicalism 4y ago
    See multiple other people on this thread discussing how their vets are not taking any new customers & not raising prices. Artificial price caps set by legislation or "benevolent" collusion of owners will only lead to fewer pets being treated overall. This is just basic microeconomics.
- astockwell 4y ago
  Nope. Barriers to entry in the market (securing capital for initial expenditures, rising rents, rising malpractice liabilities) will make providers take positions at the PE-owned practices. Monopolization works in both directions.
  - whimsicalism 4y ago
    As profit increases, those barriers become increasingly more worth it to climb. Increasing profits does not make start up costs worse.
    - falcolas 4y ago
      The disproportionate-to-profit (or income) rise in secondary education costs, however, will. And that rise has the same underlying cause - the search for more money.
    - 4y ago
torbTurret 4y ago
PE are truly the cockroaches of our society.
- guelo 4y ago
  Please show some respect for your overlords.
clairity 4y ago
don't ever go to any ACCESS animal hospitals then. they're prominent in southern california, and probably beyond, and sold out to PE many years ago. they take advantage of pet owners in the most acute veterinary situations to bilk them (or their insurance) out of many thousands of dollars. it's despicable. i was so furious i nearly punched a vet there who was hard-selling me on very expensive cancer treatments for my (then dying) cat a few years ago when he hadn't even confirmed it was cancer (there was much more to the story, but i'll leave it at that). that was my one and only visit. never again. i've since found a great vet working at a non-profit rescue organization. she's no-nonsense, genuine, caring, but importantly, unconstrained by financial metrics. when the sibling cat was dying, she recommended palliative care (and generic medicine from a formulary) over low-odds treatment, because the best case was a few more months at the cost of significant agony for my cat.
- reaperducer 4y ago
  i've since found a great vet working at a non-profit rescue organization Rescue organizations are often the best resource for finding a reputable vet. One of my neighbors went to a big chain vet clinic to have her cat spayed. They charged her almost $120. Meanwhile, the city will spay any cat you bring to the pound for free.
idrios 4y ago
My mom and step-dad have run a small veterinary clinic for the last 20+ years, they recently sold to one of these companies for a lot of money because mom was completely burnt out and wanted to retire. Step dad agreed to continue working for 3 more years though to ensure a smooth transition, mom worked for an additional 6 months and very recently retired. They both despise the company. Before selling they were not beholden to any boss or investors, and worked hard to do the best for their clients and their pets. Now they're forced to use systems they have no control over. People can schedule appointments online through a system they don't manage, which means they could end up needing to euthanize an animal that they've known for 15 years at 9 in the morning, and then 5 minutes later have to pretend they're completely ok and happy to accommodate a new client with their new puppy. Step dad says it makes him feel like a psychopath. They also take issue with the fact that there's no screening of the appointments that are scheduled. To test it, he scheduled an appointment to a nearby hospital on the same network with the description (and I apologize for the morbidity, keep in mind this didn't really happen and he just was making a point), "Garage door was accidentally shut on my dog's head and severed it. Can you please reattach it." It was approved and apparently nobody noticed it until an hour before the appointment was supposed to happen. On top of that, now he's started dealing with corporate politics that he's never encountered before, and he says he's worried there will come a day that he just loses all motivation to go to work.
SomeBoolshit 4y ago
It all started going a very wrong way when animal health insurance became a thing. I've always had vets peddle weird stuff but that was a real eye opener.
- rentfree-media 4y ago
  Maybe we should try insurance for people going to doctors and see if that turns out any different, oh wait lol....
acegopher 4y ago
> They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets.
- kaashif 4y ago
  > This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets. Comparing human and (non-human, but I'll omit that) animal healthcare is flawed. Humans are paying for healthcare themselves and place an infinite financial value on their own lives. Animals don't pay for their own healthcare, so it doesn't matter how much they value their own lives, what matters is how much the owner values its life, which is in many cases not at all infinite.
- dantheman 4y ago
  Almost all healthcare spending is not on emergencies.
brightball 4y ago
PE is going after every market segment. It’s crazy.
jsiaajdsdaa 4y ago
>I don't know where else to go. A free market (scary!) would lower the barrier to entry for proper vets to compete. But because of rent, labor, and regulatory overhead, you are left to deal with an entrenched and disinterested incumbent.
- wolverine876 4y ago
  > regulatory overhead A free market can also create an environment where pets are hurt and owners are defrauded. Regulations reduce waste, improve quality, and create more efficient markets.
  - jsiaajdsdaa 4y ago
    If a veterinarian or anyone else has harmed or committed malpractice against your animal, you have the right to present evidence to the police and pursue criminal charges against them. Very curious that despite all of the licensing and regulatory schemes out there, these things still happen? What's the backlog like currently for such cases?
    - wolverine876 4y ago
      > If a veterinarian or anyone else has harmed or committed malpractice against your animal, you have the right to present evidence to the police and pursue criminal charges against them. The courts are not an efficient solution, and it's too late for your pet. I don't want to sue people, I want my pet taken care of. > Very curious that despite all of the licensing and regulatory schemes out there, these things still happen? I don't understand: You're saying that regulations don't perfectly prevent all bad behavior?
      - jsiaajdsdaa 4y ago
        >I want my pet taken care of Strict regulations don't guarantee this. Additionally, they can be counterproductive by blocking competition, resulting in only a few compliant vets in your area who might still harm your pet. >I don't want to sue... courts are not efficient If a monopolistic vet knows they won't lose their license or face charges/fines because a court can't take do so, why would they be incentivized to be extra careful with your pet?

amelius 4y ago

Dentists will go down the same route.

pclmulqdq 4y ago
Dentists seem to generally be decent businesspeople, while doctors and vets aren't, so they may resist PE buyouts for a while.
- pc86 4y ago
  I'm curious why this is as it seems to have been the case in my experience as well.
  - pclmulqdq 4y ago
    My guess is that nobody becomes a dentist because they love teeth. They do it to have a stable business. Conversely, people become vets because they love animals, and people often become doctors for the prestige or the ability to help people.
    - vrc 4y ago
      Also in my experience it’s very standard for dentists to quickly go out on their own —- many towns will have multiple dentists and none to one doctor or vet clinic. Then again I’m seeing places like Aspen Dental popping up all over the place so who knows
- ROTMetro 4y ago
  Dentists are the worst up sellers of all. Before moving, I had all of my family checked out at the dentist we had for years. When we moved our new dentist found a lot of 'work' that needed to be done. When we asked him to consult with our old dentist to compare notes it got real awkward.

legitster 4y ago

I worked with people who did (human) clinic roll ups. Part of the issue at hand is that doctors and physicians are notoriously bad businesspeople. So once they build up a big enough practice, a lot of them will jump on the chance to sell the side of the business that they hate to a management firm.

banannaise 4y ago
The inevitable march of capitalism: experts in every field are gradually relieved of their decision-making power by experts in finance, until finance guys control everything.
- lordnacho 4y ago
  But you can have capitalism without financialization.
  - Ericson2314 4y ago
    "financialization" is more a boogieman than a solid concept. More competition (the best interpretation of "de-financialization" I can imagine) is not very solid solution for something like healthcare (or yes pet care) where the demand being inelastic makes "ransoming" easy.
    - shkkmo 4y ago
      Markets can work fine with inelastic demand if there is adequate information, freedom of choice and proper regulations.
      - WaxProlix 4y ago
        More like, could than can as far as I can see. Markets kick ass under certain circumstances, but in some areas it's almost impossibly hard to achieve those circumstances.

shakes_mcjunkie 4y ago

> They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. I searched recently for a nearby vet in Chicago and probably out of 15, only 1 was not owned by a larger chain or company. Big bummer. It's hard to trust that a vet that's part of a chain isn't going to have perverse incentives when it comes to caring for my pets. Also, another thing that I imagine is driving up vet prices is the unregulated pet insurance industry.

mirntyfirty 4y ago
True although some of the large PE firms do their best to hide the affiliation.
- shakes_mcjunkie 4y ago
  Oh yea I'm sure. Many of the chains I'm not sure what type of company they were. But just the fact that vets aren't a small, locally owned businesses concerns me. I'm sure some of the larger chains are either PE firms or owned by PE firms.
dhosek 4y ago
My brother owns Merrick Animal clinic in Brookfield. The other thing to investigate would be independent vets doing house call practices which, assuming you can find one, would be cheaper than a clinic and much less stressful for the animals (my brother did that before buying Merrick 14 years ago).
- shakes_mcjunkie 4y ago
  Oh interesting I'm going to look into a house call vet!
- zippergz 4y ago
  We have used house call vets for many years, and they are wonderful in terms of experience for the animals. However, in my experience they are universally far more expensive than clinics (which we still go to sometimes if it's semi-urgent and our mobile vet is not available).

Johnny555 4y ago

Vet clinics become very popular private equity targets recently. Probably because more and more people are buying pet insurance -- our insurance paid nearly $20,000 to Sage for my dog's cancer treatments. I doubt I could afford emergency vet treatments without insurance.

shakes_mcjunkie 4y ago
Yes. Pet insurance is an unregulated market and also has to be driving up prices.
- lotsofpulp 4y ago
  I would have guessed increases in demand for healthcare for pets greater than supply of healthcare for pets to be driving up prices.

whimsicalism 4y ago

This is how markets function - rising profits for vets will encourage more providers to enter the market. e: Sorry, sometimes forget what kind of science denialism is cool now. Climate denial out, economics denial in.

markovbot 4y ago
I'm sure that'll be a huge relief to all the people who no longer afford healthcare for their pets. Maybe they simply should have not been poor!
- whimsicalism 4y ago
  See multiple other people on this thread discussing how their vets are not taking any new customers & not raising prices. Artificial price caps set by legislation or "benevolent" collusion of owners will only lead to fewer pets being treated overall. This is just basic microeconomics.
astockwell 4y ago
Nope. Barriers to entry in the market (securing capital for initial expenditures, rising rents, rising malpractice liabilities) will make providers take positions at the PE-owned practices. Monopolization works in both directions.
- whimsicalism 4y ago
  As profit increases, those barriers become increasingly more worth it to climb. Increasing profits does not make start up costs worse.
  - falcolas 4y ago
    The disproportionate-to-profit (or income) rise in secondary education costs, however, will. And that rise has the same underlying cause - the search for more money.
  - 4y ago

torbTurret 4y ago

PE are truly the cockroaches of our society.

guelo 4y ago
Please show some respect for your overlords.

clairity 4y ago

don't ever go to any ACCESS animal hospitals then. they're prominent in southern california, and probably beyond, and sold out to PE many years ago. they take advantage of pet owners in the most acute veterinary situations to bilk them (or their insurance) out of many thousands of dollars. it's despicable. i was so furious i nearly punched a vet there who was hard-selling me on very expensive cancer treatments for my (then dying) cat a few years ago when he hadn't even confirmed it was cancer (there was much more to the story, but i'll leave it at that). that was my one and only visit. never again. i've since found a great vet working at a non-profit rescue organization. she's no-nonsense, genuine, caring, but importantly, unconstrained by financial metrics. when the sibling cat was dying, she recommended palliative care (and generic medicine from a formulary) over low-odds treatment, because the best case was a few more months at the cost of significant agony for my cat.

reaperducer 4y ago
i've since found a great vet working at a non-profit rescue organization Rescue organizations are often the best resource for finding a reputable vet. One of my neighbors went to a big chain vet clinic to have her cat spayed. They charged her almost $120. Meanwhile, the city will spay any cat you bring to the pound for free.

idrios 4y ago

My mom and step-dad have run a small veterinary clinic for the last 20+ years, they recently sold to one of these companies for a lot of money because mom was completely burnt out and wanted to retire. Step dad agreed to continue working for 3 more years though to ensure a smooth transition, mom worked for an additional 6 months and very recently retired. They both despise the company. Before selling they were not beholden to any boss or investors, and worked hard to do the best for their clients and their pets. Now they're forced to use systems they have no control over. People can schedule appointments online through a system they don't manage, which means they could end up needing to euthanize an animal that they've known for 15 years at 9 in the morning, and then 5 minutes later have to pretend they're completely ok and happy to accommodate a new client with their new puppy. Step dad says it makes him feel like a psychopath. They also take issue with the fact that there's no screening of the appointments that are scheduled. To test it, he scheduled an appointment to a nearby hospital on the same network with the description (and I apologize for the morbidity, keep in mind this didn't really happen and he just was making a point), "Garage door was accidentally shut on my dog's head and severed it. Can you please reattach it." It was approved and apparently nobody noticed it until an hour before the appointment was supposed to happen. On top of that, now he's started dealing with corporate politics that he's never encountered before, and he says he's worried there will come a day that he just loses all motivation to go to work.

SomeBoolshit 4y ago

It all started going a very wrong way when animal health insurance became a thing. I've always had vets peddle weird stuff but that was a real eye opener.

rentfree-media 4y ago
Maybe we should try insurance for people going to doctors and see if that turns out any different, oh wait lol....

acegopher 4y ago

> They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets.

kaashif 4y ago
> This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets. Comparing human and (non-human, but I'll omit that) animal healthcare is flawed. Humans are paying for healthcare themselves and place an infinite financial value on their own lives. Animals don't pay for their own healthcare, so it doesn't matter how much they value their own lives, what matters is how much the owner values its life, which is in many cases not at all infinite.
dantheman 4y ago
Almost all healthcare spending is not on emergencies.

brightball 4y ago

PE is going after every market segment. It’s crazy.

jsiaajdsdaa 4y ago

>I don't know where else to go. A free market (scary!) would lower the barrier to entry for proper vets to compete. But because of rent, labor, and regulatory overhead, you are left to deal with an entrenched and disinterested incumbent.

wolverine876 4y ago
> regulatory overhead A free market can also create an environment where pets are hurt and owners are defrauded. Regulations reduce waste, improve quality, and create more efficient markets.
- jsiaajdsdaa 4y ago
  If a veterinarian or anyone else has harmed or committed malpractice against your animal, you have the right to present evidence to the police and pursue criminal charges against them. Very curious that despite all of the licensing and regulatory schemes out there, these things still happen? What's the backlog like currently for such cases?
  - wolverine876 4y ago
    > If a veterinarian or anyone else has harmed or committed malpractice against your animal, you have the right to present evidence to the police and pursue criminal charges against them. The courts are not an efficient solution, and it's too late for your pet. I don't want to sue people, I want my pet taken care of. > Very curious that despite all of the licensing and regulatory schemes out there, these things still happen? I don't understand: You're saying that regulations don't perfectly prevent all bad behavior?
    - jsiaajdsdaa 4y ago
      >I want my pet taken care of Strict regulations don't guarantee this. Additionally, they can be counterproductive by blocking competition, resulting in only a few compliant vets in your area who might still harm your pet. >I don't want to sue... courts are not efficient If a monopolistic vet knows they won't lose their license or face charges/fines because a court can't take do so, why would they be incentivized to be extra careful with your pet?