You'll never guess why pet care has become so much more expensive in recent years. (Answer: It's hedge funds, it's always hedge funds.) www.theatlantic.com/ideas/archiv...
My wife is a vet who owns her own practice. She’s been watching this play out for years. There are other (not surprising) factors at play: student loans are so high that most vets can’t get loans to buy or open practices. Corps can offer benefits that she can’t & get better vendor prices.
Meanwhile, the whole veterinary practice caring for large animals is dying off, which works against the "local and sustainable" dairy and beef production chain. Which is not the best way of describing it, but maybe this is
After reading this story I went to check on who currently owns the vet I’ve been taking cats to for many years. Yep, private equity bought them out in ‘17. Made me physically ill to read that. Had no idea, though they are much more expensive than the used to be.
Big, shiny new veterinary office recently opened across the freeway from the local vet where I took my cats. No current pet, so don’t know how locals are doing. There will be an emergency vet a block away from them soon. Don’t know if they’ll survive.
There was a lot of anger here in Rochester, NY last year when the big hedge fund that bought up most local vets killed the only emergency vet practice in the county for being unprofitable (also probably for unionizing), necessitating people to drive to Buffalo or Syracuse for emergency vet care.
Mars is family owned still and has been buying up a LOT of pet companies the past few years because pet food/health is far more recession resistant that candy.
When my boss gets concerned about raises and $$$, I say that the richest person in VA is a member of the Mars family. They're fine.
Dude. Providing pet care and food to animals is textbook private equity. Wait till they pass the bills allowing horse meat, dirt, water, and insects as “pet food”. I could easily double my profit with adding water weight. And your animal? Its always gonna be sick.
I'm thankful my vet is still privately owned by the doctor. The bills always end up lower than I'm expecting. I'm not sure what I'll do once she retires.
Wait until people find out the hard way what hedge funds have done to assisted living and nursing homes. Forget any inheritance, you're going to be paying more for your elderly relatives than your kids' college.
With luck, this means that more people start their own vet clinics, because doing so is very profitable, and hopefully prices come down again.
The easier we make it for people to actually compete, the harder it is for hedge funds to squeeze ossified markets!
The problem is real estate and employees and student loan costs associated with getting off the ground as a young vet. You can't just open up a building with no customers or cashflow and do business. Nobody *wants* to be owned by a private equity company, but money has to come from somewhere.
So what you're saying is that, actually, the current cost of vet service is what it costs to actually provide that vet service, all costs included?
FWIW, I think my very clinic charges more to X-ray my dog than my human clinic charges my insurance company to X-Ray me, but maybe dogs are harder...
What I'm saying is that the cost of maintaining an existing practice isn't prohibitively expensive for a single vet or a small team, but opening a new practice will likely involve selling some percent of ownership to another investor.
An existing practice isn't going to have to buy a ton of specialized supplies and equipment, furnish a building, heavily advertise for new clients, and do all that while paying off 8 years of college.
Maintaining a business after all those big costs are paid is more possible without a partner.
So far the math I'm hearing goes:
- equipment leasing is expensive
- college is expensive
- therefore vet clinics are expensive
I don't see how "corporate ownership" adds a lot to that.
I do see how using old equipment allows prices to be lower for a while, though. Isn't that... good?
Typically business equipment is leased, and the leasing cost is adjusted to the lifetime of the equipment (plus interest.)
Equipment dies and beds y replacement, even for existing practice, but if your 15 year old X-ray machine is all paid for and still works, that will indeed be more profitable.
