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

ftc.gov

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

#131

Post by snapetom »

whimsicalism wrote: post #117
AlotOfReading wrote: post #77

Earlier quoted context omitted.

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.

Higher prices == worse Yelp reviews. You then get a reputation for being expensive, and Yelpers warn people to stay away.

This is an emotionally charged industry where 99.9% of the customers have no clue what goes on business-wise behind the scenes. Yelp has been a curse, giving voice to these people.

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

#132

Post by dado3212 »

Retric wrote: post #9
whimsicalism wrote: post #7

Earlier quoted context omitted.

Shielding people from the actual prices does raise the actual prices typically.

Yet somehow market driven healthcare is almost universally more expensive, it’s like there are some monopolistic effects involved. For example several attempts to privatize the VA failed because of the vast increase in costs.

The two driving forces for higher costs are subsidization of demand (gov't assistance + insurance, all of which have some pass-through effect on raising the cost of services), and artificial restriction of supply (it's hard to create a hospital/vet service/hire non-US doctors). Most market-driven healthcare approaches have been handicapped by one (or usually both) of those factors still being in play.

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

#133

Post by jacobolus »

jessaustin wrote: post #78
legitster wrote: post #57

Earlier quoted context omitted.

A bit of apples and oranges here. The goal of the FTC is not to make big companies smaller, it's to protect the market. They are not supposed to be the ones to determine if whales are natural or not to an ecosystem - so they don't generally go hunting them.

That's so 1980s. Your appeal to nature has nothing to do with the reality of the last several decades. Mergers among firms in the same market are never good for humans who must use those markets in order to live.

> That's so 1980s.

Yep, we’ve had about 50 years now of a Supreme Court shifting further and further to the right, slowly eroding every government check on corporate malfeasance and rent extraction, including antitrust law. The result has been a slow-motion train wreck, and it’s not clear that anything can be done about it for at least a generation.

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

#134

Post by bmj »

beckingz wrote: post #106
AlotOfReading wrote: post #60

Earlier quoted context omitted.

I've found that the people actually providing veterinary healthcare are some of the biggest animal lovers you're ever going to meet. They adore animals to frankly unhealthy degrees. If even the local family-owned vet clinic is also doing something, it's usually not because they want to exploit hurt animals and exploit you, it's motivated by the necessities of the industry. In this case, non-payment is a huge issue fo…

Yeah, the people I know who work in veterinary healthcare love animals. Many of them end up burning out because they have to deal with so much animal death.

A handful of years ago, we had to euthanize our (very old) cat. The plan was to have an at-home come in, but his conditioned worsened, and the service couldn't accommodate us, so I ended up going to an emergency clinic. Initially, it was a bit impersonal, but I was touched by the vet who, when administering the drugs, started crying right along with me.

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

#135

Post by [deleted] »

legitster wrote: post #86
jessaustin wrote: post #78

Earlier quoted context omitted.

That's so 1980s. Your appeal to nature has nothing to do with the reality of the last several decades. Mergers among firms in the same market are never good for humans who must use those markets in order to live.

> Mergers among firms in the same market are never good for humans who must use those markets in order to live. I don't think this is a universal truth. Clearly there are situations where consumers prefer national brands or dealing with larger companies. If we don't like it, we can pass laws to impose our morality on the public, but the FTC has their mandate and they are sticking with it until told otherwise.

[deleted]

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

#136

Post by ensignavenger »

snapetom wrote: post #118
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?

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 cor…

If nothing changes for the customer, then why is it a bad thing? Why should consumer care who owns the clinic?

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

#137

Post by bmj »

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?

I think this is a bigger issue among emergency clinics. There used to be a few private emergency clinics in my area, but they are, to my knowledge, gone, and replaced by larger corporate operations.

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

#138

Post by shkkmo »

Ericson2314 wrote: post #116
lordnacho wrote: post #94

Earlier quoted context omitted.

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.

Markets can work fine with inelastic demand if there is adequate information, freedom of choice and proper regulations.

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

#139

Post by ensignavenger »

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…

If there really is only one vet in an area, then how is it judged they are price gouging and not just charging market rates?

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

#140

Post by PragmaticPulp »

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.

But this isn't the kind of thing that happens overnight. It takes a very long time for people to notice the profits, more people to choose to enter the veterinary field, and for them to finish education and move on to launch their own clinics.

There's also a secondary problem whereby the existing chains can incentivize new vet grads to simply join up. Why go through all of the risk and trouble of starting your own clinic when the local chain is offering a huge sign-on bonus and reasonable annual salary?

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