Rural outage: Who will buy (and staff) the nation’s remote veterinary practices?

Rural outage: Who will buy (and staff) the nation’s remote veterinary practices?

Two successful hospitals have spent years trying to find a veterinary associate. Are these isolated incidents or signs of a larger trend? While the experts deliberate, futures hang in the balance.
source-image
Apr 11, 2017

The owner of this mixed practice in southern Colorado, which sees everything from "cows to cockatiels," has been searching for a buyer for years without luck. (Photo courtesy of John Davis.)In Colorado, a rural veterinary practice with no mobile service and clients lined up at the door every morning struggles to find a buyer. Owner John Davis, DVM, MS, MBA, has thrived there for 40 years, but when he retires, an entire county will be left without a veterinarian.

In rural Kentucky, Mike Williams, DVM, and his wife just bought a second clinic and are expanding their first. But they may have to slow their growth because, after two years of searching, they have found only one associate willing to sign on to work in the area.

With new veterinary schools forming, class sizes growing and 3,000 veterinarians a year entering the workforce, how is it that practices offering attractive positions and packages struggle to find veterinarians willing to sign on?

How big is the problem?

Stories like Davis’ and Williams’ notwithstanding, AVMA economist Mike Dicks, PhD, says he doesn’t see a problem on paper. But then again, there hasn’t been much specific research into the problem of staffing and finding buyers for rural practices.

“It would seem to me that there is a sufficient supply of veterinarians going back to the rural areas,” he says. “The question is whether they’re willing to purchase those practices. And that comes back, at least in part, to student debt.”

While it’s true that banks won’t lend money to a buyer whose target practice won’t generate enough income to cover student loan payments, it’s a misperception to think student debt makes ownership impossible, Dicks says—one that may be driving down interest in rural practices.

Dicks sees a connection to the changing demographics of the profession, too. “Keep in mind that 82 or 83 percent of the last graduating class was female. So how easy is it for them to move into a rural area and feel accepted or be safe?” Dicks says.

New female graduates are also indicating that they want to work fewer hours, he says, and may not be attracted to a solo rural practice where there is little relief work and more large animal work.

Still, it isn’t just gender or changing career goals that are to blame for the perceived problem in attracting veterinarians to rural and food animal practice.

“There are multiple things. We really haven’t done any research to look at those practices—how many are out there that are willing to sell. Bigger practices have had no problem selling,” Dicks notes. “The first thing is to figure out how important each factor is. Are we losing practices in the rural areas? Is that a problem? What are the biggest contributors? Is it because they can’t get the loans? Do they not want to? It is because of the scarcity of clients? What’s interesting to me is it may not be the same reason in each location.”

It’s a problem the AVMA has started to look at in greater depth. “It really is important for us to figure out how big the problem is,” Dicks says. “How many want to retire and sell? What do those practices look like? What does that mean for transition? What’s the new model?”

The end of James Herriot-esque practice?

Williams, the practice owner in rural Kentucky, has been rapidly expanding his veterinary business for the last six years. He and his wife, also a veterinarian, bought a second practice last year and plan to double the size of their main hospital in the spring. But that growth might have to stop if they can’t meet the demands of their clients.

“We’re finding we don’t even have enough vets to fill up every day of the week, so we have to be shut down for one or two days a week,” he says. “It’s not a growth issue, it’s a matter of manpower. We have to stagnate because we can’t find people.”

Williams says he’s contacted veterinary schools and advertised positions at his practice nationally for the last two years. In that time he’s had just four applicants—one he hired, and three others who declined the position.

The predominantly small animal practice isn’t that far from Louisville, and it offers a competitive salary for an area with a low cost of living and limited after-hours work, Williams says.

He doesn’t think pay has been an issue, because his discussions with applicants haven’t even reached the point of salary talks. The problem, he says, is finding any interest at all. Class sizes are growing at veterinary schools, and there are talks of surpluses, but Williams says he’s not seeing it.

“We’re not sitting on this big stack of resumes trying to weed through them,” he says. “I wish!”

At least seven or eight other practices in his area are having the same problem, Williams says.

“The big limiting factor is how to accept new cases because we just don’t have the people,” Williams says. “We’ve never had to slow down growth deliberately. But I think this year we’re going to have to turn people away because we just can’t fit them in.”

And if finding an associate just a half-hour from Louisville is difficult, the only veterinarian in one of the lowest-density counties in Colorado might be facing a task that’s nearly impossible.

Davis, who owns a rural practice in southern Colorado, says he’s been trying to sell his practice for a while now and hasn’t had much interest. “We have a real difficult time recruiting young veterinarians into not just food animal practice, but rural practice in general,” he says. Like Williams, Davis says he has numerous colleagues in the same position.

Yes, loan forgiveness programs and incentives to work in underserved areas exist, Davis admits, but his observation is that graduates work just long enough in those areas to fulfill their obligation and then move on to more lucrative positions. And that’s understandable, Davis says, considering one candidate he interviewed, an associate from Montana, was saddled with $400,000 in education debt.

While his practice has been profitable for him for 40 years and he has clients lined up each morning when he opens, Davis says he himself graduated with only $12,000 in school debt as a young veterinarian.

“Unless they can make the education cheaper, people are not going to be interested in rural practice,” Davis says. “There’s a good living to be made, but you can’t start out a quarter of a million dollars under water.”

It might help if veterinary schools offered truly substantial scholarships for students interested in underserved areas, he says, but programs that offer maybe $25,000 per year just aren’t enough. “That’s a drop of water on a big fire,” Davis says.

Plus, Davis believes, enough undergrads are interested in veterinary medicine as a career that veterinary schools don’t bother recruiting students interested in rural or food animal medicine. Instead they take the smartest students who are willing to pay top dollar.

The result? Kids who grow up in rural communities and might be attracted to mixed practice can’t afford to go to veterinary school (or refuse to take on that much debt), and the students who do graduate are used to urban or suburban lifestyles. For them, the appeal of becoming part of the fabric of a rural community gets lost amid concerns about employment opportunities for spouses, the quality of education for children and the presence of cultural activities in smaller communities.

What can be done?

Cary Christensen, DVM, is a former food animal veterinarian and corporate executive in food animal pharmaceuticals who now works as a senior consultant with Brakke Consulting. He says there have always been worries that there will be a shortage of food animal veterinarians or buyers for large animal rural practices. However, he says he doesn’t think the problem is any more critical now than it has been previously.

Sellers must have reasonable price expectations and the practice has to have potential for growth in order to attract buyers, Christensen says. The medical sophistication of the practice also has to match the expectations of the buyer, which may be difficult for an older practice trying to attract a new graduate.

Buyers also want to know that there are health and recreational services nearby that meet their needs, and that after-hours and on-call services won’t drain too much of their free time. “This is particularly a problem in smaller practices with fewer veterinarians to share the load,” Christensen says.

For new graduates, it may be particularly daunting to purchase a rural practice because of the lack of guidance and support they have access to. “There is often less opportunity for contact and mentorship with veterinary colleagues. Frequently they are miles away,” Christensen says. “This is especially true of new graduates starting or purchasing a practice where the seller is leaving the community.”

Unlike other consultants, Christensen says he doesn’t think gender is a major factor when it comes to finding buyers for a rural practice. “Encouragingly, we have seen practice ownership in mixed and companion animal practices increasing,” he says. “I would expect that trend toward female ownership to increase in food animal, but at a slower pace, as only 22 to 23 percent of food animal practitioners are female.”

The communities being hit the hardest in terms of difficulty in finding buyers for practices are those with decreasing livestock populations, those in remote areas with modest services, and practices that have not adapted to progressive preventive herd health services or updated their own equipment, he says.

In attracting buyers, sellers in these practices need to make sure they’re sharing a vision for the future with the buyer, helping to realize the potential of the practice and the role they can play in realizing that vision.

Sellers should also outline work expectations, job descriptions, salary and bonus opportunities, as well as non-salary benefits and local resources.

Like Christensen, Dicks says he isn’t convinced that there’s a shortage of veterinarians who want to work in rural or food animal practice, but that there’s a shortage of locations with the proper density of animals and people to support it. The rural population is declining, and some veterinarians who started out in rural practice have had to abandon their dreams to make ends meet.

“I know a lot of veterinarians who wanted to go back and be large animal veterinarians but just couldn’t make it work, so they ended up going to suburban animal settings. When I talk with them, that’s not what they set out to do,” Dicks says. “They’re not raising their family where they wanted to raise their family.”

It’s a problem the profession needs to face, but also one for which there is not quick fix or clear answers.

“There is some understanding that we need to do something to help people buy practices, but we haven’t done the due diligence to find out what factors are preventing them and how best to help them,” Dicks says. “But there is certainly a lot more awareness of the issues and willingness to examine them.”

Meanwhile, as leaders and analysts in the profession examine the problem and hunt for solutions, veterinarians like Davis and Williams wait for the perfect candidate to come along.

Rachael Zimlich is a freelance writer in Cleveland, Ohio, and a former reporter for dvm360 magazine.