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FTC acts against private equity firm’s acquisition of veterinary clinics

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Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#111

Post by astockwell »

whimsicalism wrote: post #96
PragmaticPulp wrote: post #61

Vet clinics became very popular private equity targets recently. One of the people I know in PE described their profit margins as being surprisingly high even before PE roll-ups. They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. There was a secondary rush where people were trying to acquire vet clinic…

This is how markets function - rising profits for vets will encourage more providers to enter the market. e: Sorry, sometimes forget what kind of science denialism is cool now. Climate denial out, economics denial in.

Nope. Barriers to entry in the market (securing capital for initial expenditures, rising rents, rising malpractice liabilities) will make providers take positions at the PE-owned practices. Monopolization works in both directions.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#112

Post by lotsofpulp »

whimsicalism wrote: post #91
lotsofpulp wrote: post #43

Earlier quoted context omitted.

There is healthcare, like a broken arm. And then there is healthcare, like diabetes, hypertension, stroke, obesity, heart disease, arthritis, old age, and end of life care. The former is an insurable event, with low probability and relatively small costs. The latter is inevitable and basically not insurable at any price that 95% of people can afford. The question is really how much of society’s resources does society…

I think it is really just the high probability stuff that isn't insurable. Low probability high cost things should also be covered by catastrophic insurance.

But there are so many low probability high cost things. Each cancer might be low probability, but as you get to 70, 80, 90, it is almost guaranteed a person will hit a $100k+ if not $1M+ healthcare expense. Especially emergency and ICU related like heart attacks.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#113

Post by mirntyfirty »

shakes_mcjunkie wrote: post #82
PragmaticPulp wrote: post #61

Vet clinics became very popular private equity targets recently. One of the people I know in PE described their profit margins as being surprisingly high even before PE roll-ups. They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. There was a secondary rush where people were trying to acquire vet clinic…

> They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. I searched recently for a nearby vet in Chicago and probably out of 15, only 1 was not owned by a larger chain or company. Big bummer. It's hard to trust that a vet that's part of a chain isn't going to have perverse incentives when it comes to carin…

True although some of the large PE firms do their best to hide the affiliation.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#114

Post by IG_Semmelweiss »

The only answer to this issue (and make no mistake, its happening in medical care for humans too) is to not restrict conpetition.

With yields so low, and the stock market still above 2019 highs, PE firms are diving into the few areas of the economy where there is value due to lack of competition and it is also not completely overheated.

However, take out the permit and licensing requirements and you would plummet PE money pouring in right away.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#115

Post by whimsicalism »

eatsyourtacos wrote: post #89
ensignavenger wrote: post #55

Earlier quoted context omitted.

Could you explain this more? If the corp vets are price gouging, why are consumers choosing them over the smaller vets?

>why are consumers choosing them It's interesting that most people who like to defend the free market act as if consumers actually have choices most of the time. That's just simply not the case nearly all the time.. or it's a complete illusion of choice. Especially in any rural/smaller suburban area (of which the US predominantly is). It's not as if you have 1000 choices for everything around. That's only in large ur…

Most people are faced by more than one choice of vet. Most people do not live in rural areas.

If vets are able to charge high prices and people will still pay them, maybe more vets will enter the market to provide services to the underserved market.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#116

Post by Ericson2314 »

lordnacho wrote: post #94
banannaise wrote: post #84

Earlier quoted context omitted.

The inevitable march of capitalism: experts in every field are gradually relieved of their decision-making power by experts in finance, until finance guys control everything.

But you can have capitalism without financialization.

"financialization" is more a boogieman than a solid concept. More competition (the best interpretation of "de-financialization" I can imagine) is not very solid solution for something like healthcare (or yes pet care) where the demand being inelastic makes "ransoming" easy.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#117

Post by whimsicalism »

AlotOfReading wrote: post #77
ensignavenger wrote: post #55

Earlier quoted context omitted.

Could you explain this more? If the corp vets are price gouging, why are consumers choosing them over the smaller vets?

Clinics are facing severe labor shortages. It doesn't matter what the demand is, because they have a limited supply of veterinary care to give. My partner's clinic recently became corporate-owned because they simply could not hire new vets to be able to take new clients. Any days off any vet took had to be covered by one of the others on their "weekend" or the clinic would be forced to shut down. Like other forms of…

Maybe it would be better if they charged more and paid their vets more so that there were actually enough workers to help people's pets? If that's what PE is doing because the local owners are too afraid to raise prices, more power to them.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#118

Post by snapetom »

ensignavenger wrote: post #55
AlotOfReading wrote: post #21

Earlier quoted context omitted.

My partner works in this industry and in fact has friends that are affected by this merger. While the FTC can and does have the ability to do many things simultaneously, the current situation in the vet industry is dire . Corporate vets are more profitable (through price-gouging), have a virtual stranglehold on increasingly limited labor pools, and are pretty much the only ones that can afford to invest in specialty…

Could you explain this more? If the corp vets are price gouging, why are consumers choosing them over the smaller vets?

Most of the corporations don't make it known that the clinic is corporate owned. They sweep in, buy the clinic, and keep the owner in charge. Marketing and branding is kept as-is to keep the small, neighborhood clinic feel.

Some of that is changing depending on the corporation. Sometimes you'll see "Main Street Vet Hospital, a Megacorp Vet Clinic" or they'll rebrand speciality clinics and large hospitals with the corporation branding. However, a lot of small general practice clinics still make no mention of corporate ownership and clients would never know unless they ask. And they never ask.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#119

Post by BurningFrog »

banannaise wrote: post #84
legitster wrote: post #67

Earlier quoted context omitted.

I worked with people who did (human) clinic roll ups. Part of the issue at hand is that doctors and physicians are notoriously bad businesspeople. So once they build up a big enough practice, a lot of them will jump on the chance to sell the side of the business that they hate to a management firm.

The inevitable march of capitalism: experts in every field are gradually relieved of their decision-making power by experts in finance, until finance guys control everything.

We've had capitalism for 250 years, and are still far from this alleged inevitable end state.

Re: FTC acts against private equity firm’s acquisition of veterinary clinics

#120

Post by IG_Semmelweiss »

banannaise wrote: post #84
legitster wrote: post #67

Earlier quoted context omitted.

I worked with people who did (human) clinic roll ups. Part of the issue at hand is that doctors and physicians are notoriously bad businesspeople. So once they build up a big enough practice, a lot of them will jump on the chance to sell the side of the business that they hate to a management firm.

The inevitable march of capitalism: experts in every field are gradually relieved of their decision-making power by experts in finance, until finance guys control everything.

A veterinarian cannot open a practice without doing a bunch of licensing and spending hundreds of thousands of dollars in education.

Meanwhile, the PA next to him has what it takes from years of training but she will never open a vet clinic of his/her own.

Thats not capitalism.

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