Comment by rwmj

This sounds like something out of Idiocracy

Out here, they’re all being bought up by VCA.

My vet is absolutely considering selling his practice. We (selfishly, not seriously) suggested selling his practice and then opening a new one closer to where we live. (We moved out of the area several years ago, but continue to drag the cats in to see him.)

We said it in gest but he said he was already giving it serious consideration. When he bought his practice from the previous vet, the original owner did exactly that —- opening a new practice elsewhere.

Here in the Bay Area I've been quoted $800 to clean a dog's teeth.

$250 for a cleaning in the US is still a loss leader.

The actual cost to the clinic of a dental cleaning is ridiculous for how often it needs to be done.

That was €10 here in Portugal.

Sister-in-law is a vet tech at a place that sold out to PE a few years ago. Wife is a pharmacist who worked at a small chain of pharmacies and had it taken over by one of the national ones. Both industries are seeing massive consolidation.

A couple of things that they observed between them: A) a lot less interest among newly graduated pharmacists and vets for going into business themselves- they are deeply in debt from school, taking out business loans to start up a new business on top of those loans is a real threat to their financial stability B) they want to do vet/pharmacy things with a reasonable work/life balance, not running a business things with an insane work/life balance while carrying that huge risk C) (unique to vet) people want the convenience of big, one stop shops that can offer complimentary goods like grooming, boarding, surgeries, and their medications all in one place, which requires large capital investments- the vet firm my s-i-l works for just got a nice brand new facility with brand new fancy equipment and surgery centers etc. D) (unique to pharmacy) Pharmacy Benefit Managers are destroying the reimbursement rates of small pharmacies, if you aren't a national chain you don't have the scale to effectively negotiate with the three PBM's that control 80% of the drug insurance business, and they are getting gutted by those PBM's, forcing pharmacy consolidation (one of those three PBM's is actually one of those national drug stores, CVS Caremark- thank the George W Bush administration for that bit of anti-competitive nonsense).

I'm not as sure about vet as I am about pharmacy, but at least in pharmacy it is not generally any harder because of regulations or anything like that, to start up than it was decades ago. My wife also points out that because we have more drugs than before, with more varied storage requirements, and they are more expensive than before, inventory costs a lot more than it did decades ago. So these newly graduated Pharm.D's with their 200k in debt would need to get even larger loans to start up a new business, and they get reimbursed less for it thanks to PBMs, making it hard for the indy pharmacies to stay in business whether they are new or old alike.

> There must be some barrier to entry in the market that prevents that, and that's what I would target.

Training to be a vet is a long process. The patients are nice (mostly), but don't communicate well, and some of the customers are terrible. In my area, there's a shortage of small animal vets because they can make a lot more money in the big city. There's an even worse shortage of large animal vets because the job is worse, and they can make a lot more money working with small animals in the big city. Our large animal vet won't do callouts for emergency/urgent services anymore unless you're on contract for annual checkups; routine visits are good for vet morale and help the budget.

Part of what's happening here is a combo of making a small business being expensive and a good chunk of the population living hand to mouth.

The people with the cash to start the business and get the space and equipment just sold to PE and you have people that were employees and a much smaller number of these people are going to be able to just quit and fire up a business.

> If the PE firm is charging more than a vet operating alone would, then why wouldn't a vet operating alone just undercut the PE firm's veterinary practice?

It takes capital to start a business and people don't have that.

> There must be some barrier to entry in the market that prevents that

People retiring are selling their brick and mortars and the next generation don't have the personal wealth to buy them because they're saddled with medical/education/credit card debt and stuck with bad rent terms that caused low savings.

The only people around to buy the places are private equity.

> If the PE firm is charging more than a vet operating alone would, then why wouldn't a vet operating alone just undercut the PE firm's veterinary practice?

Finance.

Throwing in with the PE firm means you don't have to negotiate real estate leases, don't have to think about POS systems, and don't have to worry about collections.

So, the vet probably gets paid the same and spends a lot more time on being a vet. On the other hand, the consumers spend a LOT more once the PE firm has a monopoly position and switches to gouging them.

You see the same with Dentist, the cost to start a practice after paying for college? Or get a job at a big PE owned Dentist Office and work for commission.