DVM Newsmaker's Summit: A changing business model - DVM
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DVM Newsmaker's Summit: A changing business model
Societal shifts to make lasting changes on the business of veterinary medicine

DVM360 MAGAZINE


Dr. Lane: Coming from a private sector, the problem we have in this profession is that most veterinarians have become more competitive than collegial. The practice of veterinary medicine is an inch deep and a mile wide, and it's very difficult for veterinarians to comprehend this concept because we don't really have strategic alliances in place in order to see the big picture and thus more favorably compete — considering the economics of scale that larger American businesses have, for the most part, enjoyed with consolidation. If we're going to be an inch deep and a mile wide, then we've got to find a way to form strategic alliances. How are we going to transfer ownership to the next generation if the young graduates do not want to be practice owners? I know one veterinary graduate who doesn't even care about student debt. The feeling is that if I die, the debt goes away. I'm just going to pay the minimum, and whenever it's gone, well, it's gone.

Student debt is probably driving some of the income economics because we have to charge more in order to pay for young graduates who have student debt.

What we really need to do is find a way to transfer ownership to the next generation. One way that we can do that in rural areas is to form alliances for emergency work. A lot of veterinarians won't come to work for a small animal practice because they have to do emergency work, so they stay in the suburban beltways. It's a huge problem for the rest of us finding people to come in and work in our practices. Transferring ownership is going to rely on finding a way to transfer a very unique hospital to another hospital owner, and one way we can do that is for practices to merge. The problem is that of merging two often very unique facilities, and bringing two Type-A owner personalities together under one business roof. Merging them is very, very difficult. One solution would be to share things or create affiliations where two, three or 10 private practitioners can get together to solve issues like personnel, insurance, all those things legally under the umbrella of this affiliation. The individual practice would remain separate and unique, and could supply money into that affiliation on a pro-rated basis. When one of the practice owners dies or wants to retire, it goes into the pool of affiliates. The ownership is transferred automatically through a buy/sell agreement through insurance.

Dr. King: One of the questions that came up in the KPMG study was: Are there too many veterinarians or too many veterinary practices? The study suggested that in purely economic terms, there were too many veterinarians; however, they also stated that we don't live in a pure economic world, thus our inefficiencies were actually driving the need for more veterinarians in the workplace. The study did make it clear that, in their opinion, there were too many veterinary practices, especially in some geographic areas. Veterinary practices are often poor business models because they don't share equipment, personnel and services, and often duplicate efforts and equipment leading to inefficiencies and costly duplication. The second point is from a student's perspective. There seems to be an existing tension today between practitioners who have been out of school for some time and who are often practice owners and new graduates who may not be interested in purchasing the practices or working long hours. I believe the tension comes from different perspectives and views regarding how a professional should balance his or her work/life. It almost becomes a clash of cultures and does show a difference in how generations look at this delicate balance. I don't believe that this is right or wrong, but rather a genuine difference. I don't think, however, that the KPMG study really factored in the reality that new grads are very likely, for a number of reasons, to work as many hours over a lifetime. Therefore, this fact will add to the pressure to produce more veterinarians and not less.

Dr. Hendricks: I do agree it is a generational issue largely. My husband teaches high school. Whoever he sees, we get in four years. The good news is they're reading and writing better, but the willingness to work as a positive value doesn't bode well.

As far as the business issue in general, we've had the pleasure of having some students who were extremely active and started the Veterinary Business Management Association (VBMA), and they got a number of programs at veterinary schools across the nation.


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Source: DVM360 MAGAZINE,
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