Veterinary Practices are Increasingly Corporately Owned, and Pets Owners Pay the Price

As Americans spend more on their dogs and cats, veterinary practices have become attractive targets for corporations and private equity. Pet owners are seeing higher bills and declining care as a result.

A vet gives a cat a rabies vaccine.
A vet gives a cat a rabies vaccine. Photo by CHAIDEER MAHYUDDIN/AFP via Getty Images)

By the time Skye Gebhart and her husband brought their puppy, Maisie, home from the VCA Animal Hospital in Chico, California, their bill for two weeks of care was nearly $11,000. But they figured it was worth it since the puppy’s vets assured them that Maisie was okay and would start improving now that her battle with parvo, a deadly virus, was behind her.

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But a week later, the couple realized their puppy was still quite ill. Even when they could coax her to eat, she would vomit up much of what she’d consumed. So they brought Maisie back to the hospital where vets offered more treatments and no predictions as to how well they would work. After three more days and nearly $4,000 more Gebhart suspected the vet practice was not being straight with her about Maise’s chances of getting better and would just keep treating the puppy so long as she and her husband were willing to pay. 

Gebhart’s experience is increasingly common as veterinary care is becoming big business. Her local VCA hospital is one of more than 1,000 in a chain owned by Mars Inc., the candy and food conglomerate that has been rapidly expanding into pet care.  

In recent decades much has changed with the practice of veterinary medicine and pet owners often seem the last to find that out. Many still picture vets as sole proprietors who will be kind and caring to both pets and owners, a vision akin to what James Herriot described in All Creatures Great and Small. 

But relations between veterinarians and pet owners have become increasingly frayed as big corporations and private equity firms have gobbled up independent practices, with the resulting sharp focus on the bottom line sometimes leading to poorer care for the pets and bigger bills for the people who love them. Between 2017 and 2022, there has been $45 billion worth of private equity deals for veterinary practices and companies, according to Pitchbook. One firm, Shore Capital Partners, now owns more than 650 clinics under chains like Southern Veterinary partners and Mission Veterinary Partners.

Pet owners have sometimes been caught off guard by the changing landscape of veterinary medicine, unsure of how to respond when corporate vets push expensive diagnostics and treatments.

Veterinary practices are attractive takeover targets

Corporations and private equity firms find vet practices particularly appetizing for several reasons.

Veterinarians and their employees tend to have comparatively low salaries, particularly compared to human doctors and nurses. In addition, pet ownership in the U.S. is booming, with current estimates suggesting that 70 percent of households share their lives with at least one animal. And many of those pet owners consider their animals to be family members and they are willing to spend whatever it takes to keep their beloved companions healthy. 

In 2021, Americans spent $123.6 billion on their pets, according to the American Pet Products Association. That’s up significantly from $90.5 billion in 2018. Among the biggest expenditures were $50 billion on pet food and treats and $34.3 billion on vet care and product sales.

Some of the steepest increases in spending are for veterinary care. Vet costs more than doubled in two decades, with the consumer price index showing a 149 percent increase between 2003 and 2023, Bureau of Labor Statistics data show.

Recent estimates suggest that some 75 percent of specialty veterinary practices, such as emergency medicine, surgery and oncology, are now corporately owned. Mars Inc, started scooping up veterinary practices back in 2007 and currently its Mars Veterinary Health division owns more than 2,000 of them. The Mars buying spree has included some of the largest chains, such as Banfield Pet Hospital, BluePearl Specialty and Emergency Hospitals, VCA Animal Hospitals and Antech Diagnostics.

All the consolidation has caught the attention of the Federal Trade Commission, which in June of 2022 forced sales of some practices over concerns that in some areas ownership was becoming too concentrated. 

The new corporate ownership is a sharp contrast to the history of veterinary care.

“It’s been a profession that traditionally was not driven by money and it’s been considered one of the most trusted of the medical professions,” said David Lee, director of Cornell University’s Center for Veterinary Business and Entrepreneurship.

That lack of focus on money may have contributed to the corporate takeovers. “The majority of individual practices in the past were undermanaged because owners felt that managing their business was not why they went to vet school,” Lee said. ”For many years veterinarians had very modest salaries, which made us a very attractive profession to outside money. Our vet techs and nurses until recently have often been making $12, $14, $15 per hour. Again, most are pretty highly skilled and they go into it because they love animals and want to help the people who share their lives.”

The demands of corporate ownership

The changes don’t surprise Donna Hitscherich, a senior lecturer in finance and director of the private equity program at Columbia University’s business school. Private equity or large companies demand returns. “When there are investors, you have a responsibility to them,” Hitscherich said. “And they have an agenda.”

The focus on the bottom line may lead to too few staff doing too much work, since “the largest single cost in any veterinary practice is its employees,” veterinarian Beth Davidow wrote in her blog The Veterinary Idealist.

To maximize return to investors, practices may decide to pay less or cut back on the number of employees, wrote Davidow, current president of the American College of Veterinary Emergency and Critical Care and CEO of Timberline Veterinary Emergency and Specialty in Seattle.

And while the bigger practices can benefit from economies of scale, “in general, none of the cost savings are passed on to consumers and price increases have been very high in vet medicine over the last 10 years,” Davidow told the Observer in an email.

While some pet owners say they’ve had good experiences with corporate owned practices, others say they aren’t happy with the way these companies operate. A recurring concern is the amount of money corporate vets have encouraged them to spend, sometimes on pets that are so sick they won’t make it no matter what kind of care they receive.

There’s no question that the cost of veterinary care has skyrocketed over the last decade or so. Veterinary Practice News estimates that in 2010 Americans spent $13 billion on pet health. By 2021, VPN cites a figure of $34 billion, which far exceeds the impact of inflation. (Adjusted for inflation, the spending in 2021 would be $16.2 billion, or half of the actual 2021 amount.) 

Big increases in pricing could be seen in just two years (between 2020 and 2022), according to the American Veterinary Medical Association. The average amount spent on veterinary visits by households with one dog rose from $224 in 2020 to $362 in 2022. Similarly, households with cats spent $189 for veterinary visits in 2020 and $321 in 2022. 

A very sick puppy

Gebhart says she started researching parvo after she and her husband brought Maisie back to the vet hospital. What she found online wasn’t reassuring. She started to wonder if the care Maisie was getting was in the best interests of the puppy and whether the vets at the VCA practice would ever tell her if the puppy was too sick to ever come home from the hospital.  

Maisie Courtesy of the Gebharts

“I didn’t think anybody was close to saying maybe we should tell these people their dog might not make it,” she said. “At this point I’m thinking I love this little puppy but it doesn’t sound like she’s ever going to have any kind of a life.”

Gebhart then directly asked if the best choice would be to euthanize the puppy. The response, Gebhart said, was “wishy-washy.” While euthanasia was a possible choice, the vet said, “on the other hand, there could be other things we could try.” Gebhart ultimately decided to put the puppy down and then felt guilty about taking so long to make that decision.

VCA could not address Gebhart’s case “for privacy reasons,” said Joseph Campbell, external communications director for VCA Animal Hospitals. But, “we are transparent about the estimated costs of procedures and treatment and obtained client consent in advance. We work with clients with demonstrated financial need and openly communicate with clients to resolve any concerns that may arise to the best of our ability.”

Other pet owners say they have been stunned at suggestions that they fork over a credit card and approve batteries of expensive diagnostic tests at corporately owned emergency practices. Making matters worse, some owners say they were made to feel guilty when they said no.

When Brenton Basinger’s dog Earl stopped eating and became lethargic, his regular vet had no time slots for an emergency. Basinger took the family pet to an emergency practice, the BluePearl Vet Hospital in Tampa. Basinger was told that Earl would need $1,850.50 of testing.

That seemed like a lot of money and Basinger asked the veterinarian in charge of Earl’s care “if all those tests were necessary to figure out what was wrong with him,” Basinger said in an email. “She advised that if it were her dog, she would just do a blood screen to see what that looked like first.”

The results of the blood test were clear and the vet told Basinger that Earl was very sick and it was unlikely that they could save him no matter what they did. Basinger agreed that the most humane thing would be to euthanize Earl.

Still, Basinger was disturbed by the way things went initially. “I felt like the $1,815.50 was their standard operating procedure,” he said. “If someone shows up with a very sick pet, first see if they will pay the full amount. I don’t know this for a fact, but that’s the feeling I got through this ordeal.”

BluePearl did not respond to requests for comment.

Basinger’s suspicions may not be far from the truth. Wendy Beers, a vet who had worked at a VCA practice in Albany, California, told Bloomberg reporters that management had quotas and pushed employees to sell what they could.

“Every month they would print out things to say how many packages you sold, how many procedures you did,” she said. “And if they came out and said, ‘This month we want everyone to do 20 heartworm tests,’ and you only did eight, well, next month you have to do better.”

Sometimes the pressure on the vets translates into pressure on the pet owners. After declining an expensive array of tests at a BluePearl in Appleton, Wisconsin, Buck Sugden remembers an unpleasant response. “They make you feel like you’re not being a good owner if you don’t do all those diagnostics,” he said.  

Pet owners confronted with large estimated costs at emergency practices should ask the treating vet what they would do if the pet was theirs, Cornell’s Lee suggested. 

Corporate pressure to raise prices and meet quotas

Taking care of investors can mean raising prices. True Ballas has been a vet at independent practices and a host of corporate ones and she’s seen big differences. Ballas, who lives in Asheville, North Carolina, says she left her last job at one of the corporate practices, “because I was embarrassed to go into an exam room and recommend what a patient needed because of the outrageous prices for some things.”  Ballas declined to name the practice.

The need to please investors was also leading to overworked staff. Vets at some of the corporate practices “were pressured to do more and see more patients,” said Ballas, who is currently taking time off from being a veterinarian to care for her ailing mother.

One way owners can avoid running up their credit cards during emergencies is to buy pet insurance , said Karen Heidgerd, administrator and co-owner of Brilliant Veterinary Care in New York.

But insurance can have a downside, Heidgerd said. “If practices know you have insurance then they have carte blanche (to run up costs),” she explained. “Just because you can do something doesn’t mean you should. Does your cat need radiation oncology to buy a few months’ time? Your cat will need to be sedated five days a week for six weeks. Most people can’t afford it but if you have insurance, you will be talked into doing it.”

Lee said he sees a lot of people choose radiation and/or chemotherapy to buy more time with their pets. “If it were my own pet, I might just take him home and love him,” he said.

 

 

Veterinary Practices are Increasingly Corporately Owned, and Pets Owners Pay the Price