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Corporatism and the Future of Veterinary Medicine

Posted by Ira Gordon on January 25, 2017 at 12:37 PM
Ira Gordon
Ira Gordon, DVM DACVR (Radiation Oncology), has been a veterinary radiation oncologist since 2007. He is the chief operating officer of The Oncology Service (TOS) and co-founder of VetPrep, ViralVet, and VetTechPrep (subsidiaries of XPrep Learning Solutions).

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There has been a great conversation going on in a ViralVet thread regarding recent corporate consolidation. The recent acquisition of VCA by Mars has prompted many of us to think about how corporatization of our profession may impact the future of veterinary medicine.

To be clear, my concerns are not criticisms of the companies involved. Although I happen to be an extremely strong supporter of small businesses, I don’t believe that corporations are inherently evil. Furthermore, many things that I hear from vets and techs at practices that have been acquired by BluePearl, Mars, and VCA lead me to believe that Mars has treated most of the people at the veterinary practices they have taken over very fairly.

But my biggest concerns are not for the short-to-medium-term future of current employees of these practices. In fact, I think a company undertaking a major acquisition would be crazy to institute changes that might drive away the people working at these practices. In my opinion, those people are the major asset that was just purchased. My much bigger concerns are about how corporate consolidation (especially in the hands of fewer massive corporations instead of a many smaller ones) could negatively impact the future of the profession; particularly my younger colleagues and current veterinary students.

This particular merger is not one that leads directly to an increase in the number of corporate practices. Mars (and its brands) and VCA are already the two biggest corporate entities in veterinary practice ownership, at least in my area and most that I’ve traveled to.

One of the things I hear often is that we should be concerned that corporations like Mars are not owned by veterinarians. I don’t find this argument compelling. I think veterinarians can run excellent or terrible practices (I’ve seen both) and non-veterinarians can do the same.

Mars is a huge and very successful corporation. It has multiple individual brands that generate billions of dollars in and outside of the pet and veterinary space. These brands include Banfield, BluePearl, Whiskas, Pedigree, Royal Canin, Nutro, Cesar, Sheba, Iams, Waltham, and now VCA, Antech, and Sound-Eklin among many others.

My perspective is impacted by the fact that I am a specialist (radiation oncologist) and I co-own an oncology specialty group. Our practice is in close proximity to and competes primarily with corporate-owned practices. In fact, in our region, we have four competing specialty hospitals; two are VCA hospitals and the other two were locally owned but purchased by BluePearl less than one year ago. Now they are all Mars clinics. So I guess now, I should make the difficult decision to switch from eating M&Ms to Hershey’s bars.

My practice is proud to be independent, owner-operated, oncologist-owned, and non-corporate. But as we see changes happening around us, we have to wonder if we can be successful as we are crowded by large, powerful, and diversified corporations.

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Here are the things I worry about when I think about how this type of corporate consolidation could impact our profession:

1.Will independent veterinarians be able to compete with large corporations?

I think there will always be some degree of public support for good, independent veterinarians and practices. However, will corporate growth limit our ability to effectively or fairly compete? Consider the acquisition of Antech. I actually believe that the recent acquisition of VCA may have primarily been an acquisition of Antech and VCA hospitals were considered a side benefit. Antech essentially only has one competitor in veterinary medicine (IDEXX). These services operate at very high profit margins and disproportionately boost a corporation’s bottom line compared to what is generated from the clinics.

What does this mean for the rest of us? It means that a large corporation could essentially afford to operate veterinary practices at breakeven or at a loss because they support a highly profitable laboratory arm. Because the independent veterinarian can’t afford to do that, they would struggle to compete.

The same situation is true when a large veterinary practice corporation also owns equipment companies like Sound-Eklin. And what about generic and/or prescription pet food? A large company could presumably operate a veterinary practice at a loss if the practice directs business to its own pet foods, diagnostic labs, medical equipment, and other business units.

2. How might corporate conflicts of interest impact medical care of pets?

As veterinarians, we are primary gatekeepers of information and recommendations for our clients and pets. It’s a job most of us take very seriously. We are repeatedly asked by our clients about things like what foods people should feed their pets, what diagnostic tests we should run, what supplements, toys, treats, and medications should be used. What happens when a veterinary practice is run by a company that has an external business interest in promoting and selling specific foods, laboratory services, treats, insurance plans, etc? It likely depends on various factors but we would expect there to be bias towards promoting their own services and significant potential for conflicts of interest between what is best for the business and best for the pet and client.

On a similar note, corporations are increasingly involved in veterinary training. Banfield has relationships with some veterinary schools and is involved in clinical training of students. Residents are trained at VCA and BluePearl specialty hospitals. Does this corporate influence over veterinary training result in similar biases and conflicts of interest? Does it give corporations an unfair advantage in recruiting veterinarians to work for them compared to independent practices?

3. What is the long-term impact of decreasing competition?

A majority of veterinary clinics remain small businesses but will this be the case 20 years from now? And what would be the impact of decreased competition on the veterinary profession?Is it merely nostalgia that makes me mourn the potential loss of the independent veterinarian or are these types of vets important to the profession?

We should not expect changes to happen suddenly and obviously. They are much more likely to progress subtly and slowly over many years. Some changes may benefit or provide new/more options to veterinarians, technicians, and veterinary clients/patients.

We certainly are living in interesting times for our profession.

  • Are there any lines to be drawn or should free-market capitalism reign?
  • Does it matter if veterinary care becomes limited to a choice between as many options as we have when picking a cell-phone carrier, soda-product, or candy?
  • Is this all inevitable and we are just hanging on to a nostalgic structure that will be reminiscent of the mom-and-pop bookstore before the massive bookstore companies took over and then Amazon came in and replaced them?
  • And most importantly, is there anything we should all do to protect the future and reputation of the profession we have dedicated our lives to?

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