Why outside investors want in on the veterinary profession

Why outside investors want in on the veterinary profession

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Apr 22, 2017

In a competitive market, money flows toward the best opportunity. Which suggests that veterinary hospitals offer a better return than other types of businesses. Think not? Investors are likely focused on the potential for increased client compliance. In fact, closing the gap between needed care and purchased care offers a five-fold opportunity in revenue growth. And that’s enough to get (almost) anyone’s attention.
 

Breaking it down

First, IDEXX recently estimated that, for an average dog living 12 years, total client compliance with American Animal Hospital Association standards of care would produce $17,700 of gross revenue over the dog’s lifetime. However, the average veterinary practice currently provides $3,600 in services for that same dog (see Figure 1).

While it’s clearly unrealistic to expect you could turn around tomorrow and capture the total value of care required by all pets, it is possible to close the gap. More profitable practices estimate that the lifetime value of care they’re providing is more than double that $3,600 figure. And even relatively modest improvements represent considerable growth potential when you look at the total number of pets you see in a year (see Figure 2).


What’s holding us back?

Your everyday experience shows there are barriers to overcome. When you adjust for inflation, U.S. household incomes declined over the past two decades. And at the same time, the cost of veterinary care increased at more than twice the pace of other goods and services. So we’re seeing a widening gap between the veterinary care pets need and what pet owners will pay for. The future health of the veterinary profession (and those investors’ returns) depends on finding effective strategies to close this gap.

Why Outside Investors can destroy the practice of veterinary med

The ignorance demonstrated in this article explains exactly why we need to quit following the advice of practice consultants while avoiding emulating the practice changes in human medicine. First, most vet schools actually screen applications to detect students who place higher income at the top of their expectations of the profession. The LSAT on the other hand, seems to screen students for their ability to accept the status quo and thus leave precedent unquestioned rather than graduating large numbers of open minded, critically thinking lawyers with altruistic ideas. The legal profession helps maintain the status quo but selecting for "acquiescing" traits (?) in potential candidates. Historically, vets typically weren't driven by money, but rather those driven by altruism and a desire to do "good". In my small, low cost ambulatory practice, I'm often astounded by the complaints of new clients, seeking my services over the large, "fancy" practices filled with large staffs and stainless steel exam tables. My clients would prefer to watch me do their pets' surgery, spay or neuter on the kitchen table, or help me suture a leg wound on the kitchen floor, or tailgate of a truck. People sued Dr. Pol because they were outraged when he performed surgery without a mask or gown, but he was exonerated when their investigations determined that he had no record of complaints filed against him by clients and no history of morbidity and mortality resulting from his practices. His clients were completely satisfied with his standard of care, and it was only TV viewers who were complaining about what "they" considered poor practices. They wanted what was taught in vet school, not what was practical, efficient, safe and cost effective. He and many others have proven that academic medicine may be important in academic centers, but stats would surely prove that many species of animals can undergo surgery in open grassy fields where they're less likely to develop post op infections and other complications, even when the surgeon is in a T-shirt, and not wearing caps and gowns ! Gloves and aseptic to sterile technique is very efficient and safe, and it you don't believe it then research the conditions many practice under during wars, hurricanes and other "disaster" conditions; they're soley driven by money without concern for the highest good of ALL concerned. My dearest friend was featured on a TV show, and he too had a huge clientelle, more than he could keep up with, and he too did orthopedic surgery without always following a totally sterile protocol. It made me crazy until I realized that his outcomes were amazing; he never had a wound infection or other complication due to his llack of a gown or mask. Outside investors don't understand medicine, or what people want. Their goal is purely economic, with no regard to patient satisfaction or compassion unless the practices alienate clients. Their goal is to drive up prices to obtain more revenue, doing exactly what's destroying human medicine right now. Practical vets are motivated by conscience and they realize they can easily increase income by raising volume rather than prices. I'd love to do a study obtaining data from the field, and document success rates for care given during disasters, and by providers practicing "practical" medicine. I've assisted in a few remote animal medical trips where we complete 1500 spays and neuters on 3 day weekends without any losses or complications. The "staff" was composed of 17 junior veterinary students who had never operated on a live animal, overseen by 5 volunteer vets from the community. Students acted as surgeons, ran anesthesia, monitored recovery and the pharmacy, while taking turns making up new sterile packs. The social worker who helped us with location and obtained the gymnasium where we operated, said there were no reported complications or wound infections. fwiw: students did wear caps,gloves and masks !
ASTUTE consultants would recommend ideas that rewarded client loyalty and demonstated ethic. A simple but potent example is the recommendation that practices provide free euthanasia services for long standing client. There's nothing worse than accepting a check for $200.00 as you leave a house with a dead body and lifetime of love. They'd advise that vets adjust pricing and practice to what suits the practice or providers ethics and conscience. Think about that word conscience: con = with science = science.
Large hospitals are a pit of bacteria brought in from a huge variety of sources, thus a set up for nosocomial infection. Why is it that Dr. Pol et al, can perform surgeries successfully without masks and caps, in homes and fields when we're taught those environments were the antithesis of "good practice". One other thought is another pet peeve that makes me and clients crazy which is the micromanaging of billing activities. Wise consultants would ask themselves what THEY liked and didn't like in every day business transactions and practices. WHO wants an extensive, itemized list of otherwise "hidden costs" when you buy a car or sign up for a cable service?. Do you want to know about all the fees and taxes or do you want to know the price "out the door". Clients are not only "turned off", but disgusted by long, complex itemized invoices itemizing charges like injection fee, sterile or "sharps" disposal fee, prep room fee, pre-op scrub fee, transfer to OR fee, etc etc. They ask: "why is it that you can charge $500.00 for a digit amputation when I received 4 other estimates starting at $1500.00 ? And why can you sedate or induce without $200.00 worth of pre-op lab fees ? Why? Because in most cases, they're just not necessary. I also explain that in the multi doctor practices with large paid staff and office managers, the overhead is just too expensive but do feel it's important to remind them that we need large specialty practices and 24 hour care that just has to charge higher prices. Could they do it for less ? The equipment and staffing for the specialty practices requires higer costs, but ABSOLUTELY, the "every day" clinicians can keep costs affordable, and the the first place they could save is by doing away with the the "practice consultants" and AHAA management handbooks . Good medicine does not have to be expensive. I once saved a colic horse for the humane society for cost of a bottle of magnesium citrate, fluids that were to be disposed of by a local human hospital, a IV solution set, few syringes, tube, bucket and oil. We must have gotten over 200 gallons of perfectly good IV fluids that had to be discarded because the human hospital had changed contracts, so all the Baxter (?) products had to be dumped and only Abbot (?) kept on the shelves. If we want to save our profession then we have to micromanage the micromanagers. Their goal is to make money for lay INVESTORS and lay practice owners; they have no interest in providing high quality, competent, ethical care and compassionate care. In fact, they're just about trained to work devoid of compassion. If you're unsure, then peek into journals on human medicine or ask your family doctor how much their income and job satisfaction has dropped in the last 20 years. Leave the evidence based medicine and mandatory electronic health records to the academics being funded by drug companies. EBM is a noble goal if outcomes are determined by valid new research and not data mined from meta-analysis designed to have a desired outcome when statistically manipulated by unethical statisticians. Lets keep our profession "clean" steering away from practices that value income over ethics, quality care and job/ client satisfaction.