Consolidation:  its impact and opportunities

Jan 19, 2017 by Edward L. Blach, DVM, MS, MBA

There has been a lot of discussion about the impact of consolidation upon the future of veterinary medicine.  The discussion has been very mixed in that some practice owners view it as a huge blow to the future of private practice ownership and animal care.  Consolidation, however, provides many opportunities to the veterinary profession.

Many people point to media reports of individual case failures in the care provided by consolidated veterinary practices.  Others criticize the impact of financial decisions upon the standard of care that consolidated practices offer.  We have to remember that every company has individual failures that occur for one reason or another.  Finding examples of individual failure are much easier in large consolidated practices, and typically, there are many more people anxious and willing to find and report about them.  The fact that consolidation points to several facts about the veterinary industry which we as veterinarians are responsible for that have driven consolidation to occur.

First, if our modern veterinary model of practice was exactly perfect with respect to what veterinarians want, few practices would be consolidated, but instead would be more likely to be transitioned to another individual veterinarian.  Currently, many veterinarians neither want to own practices nor have the financial capacity to purchase them.  Consolidators have stepped in to provide a feasible and attractive exit for practice owners, based upon an attractive financial model that consolidators as investors can and are willing to deliver.  If the model was sufficiently attractive for individuals to purchase these practices, the market would show this result, and it does not.

Secondly, if the modern veterinary practice model was completely satisfactory to its customers, then those customers would not accept this consolidated model, and some currently do not.  When consolidation occurs, consumers have the freedom to chose where to seek and receive veterinary services.  

Based upon these circumstances, there exists many opportunities to differentiate veterinary services in a private practice model compared to a consolidated model.  There are many opportunities to provide a very personal service to pets and their caretakers.  This model may not be as realistic for consolidated practices, since staffing typically requires less access to specific providers.

Consolidation doesn't have to be negative to our industry.  It brings opportunities for practice owners who desire an exit from ownership and lack one that is attractive, and it provides an infrastructure for a workforce that might not be as interested in practice ownership.  It also provides many opportunities for differentiation and delivery of personalized veterinary care that might be difficult for consolidated practices to provide.

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