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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

#221

Post by asdff »

whimsicalism wrote: post #115
eatsyourtacos wrote: post #89

Earlier quoted context omitted.

>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.

These markets really are tiny and vets have been closing down over the years. Even in suburban areas you might only have a single vet within a reasonable distance of your home. People in this thread are even saying their entire local vet markets have been taken over already by these corporations.

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

#222

Post by gwd »

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.

> best interpretation of "de-financialization" I can imagine

"Financialization" means the insistence on seeing "business" as a machine which is to be optimized to maximize return on money. It's in contrast to people doing good work for a fair price.

Compare these two veterinary practices.

One has an owner who is a vet, who got into the practice because they love animals. They hire staff who love animals. They charge enough money to live reasonably comfortable lives and pay off their vet school bills. They could charge more but they don't. They don't try to push unnecessary services to raise more money.

The second is owned by private equity, who got into the field because it has inelastic demand. Prices are carefully calibrated to extract the maximum amount of cash possible. They hire staff who focus on getting the most bang for the buck: they focus and push for expensive operations and do them in the shortest amount of time; operations which aren't cost-effective are passed over or simply not done. At every step of the road, "upselling" is a thing, to maximize money taken from pockets.

The first is what I consider the best kind of "business": Doing good fork for a fair price. Those kinds of businesses make the world a better place to live in.

The second is what I would call "financialization", and I consider the worst kind of business: Extracting as much money as possible for the least effort. Those kinds of businesses make the world a terrible place to live in.

The first kind of business is the kind of capitalism I want, not the second.

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

#223

Post by lotsofpulp »

shakes_mcjunkie wrote: post #164
Johnny555 wrote: post #83

Earlier quoted context omitted.

Vet clinics become very popular private equity targets recently. Probably because more and more people are buying pet insurance -- our insurance paid nearly $20,000 to Sage for my dog's cancer treatments. I doubt I could afford emergency vet treatments without insurance.

Yes. Pet insurance is an unregulated market and also has to be driving up prices.

I would have guessed increases in demand for healthcare for pets greater than supply of healthcare for pets to be driving up prices.

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

#224

Post by snapetom »

donatj wrote: post #37
mberning wrote: post #25

It took 12 hours for my dog to be seen at the emergency vet I went to recently. It was brutal. And that was the only one that would agree to have us come in. It was over an hour a way. All the local clinics said don’t come in unless it was a last minute euthanization or the animal was unresponsive. Crazy.

I'm not sure if it's just the proliferation of COVID puppies or what, but in the last two years it has become remarkably more difficult to get a vet appointment. I accidentally stepped on my dogs paw about a year ago and getting an appointment less than a month out took DAYS of calling around. Ended up going to a vet 40 miles away.

My wife's practice has gotten insanely busy post-COVID. She doesn't deal with dogs and cat's so it's not that boom. Decreasing slots due to safety and health was an issue at first, but they've since returned to normal towards the last half of 2020. Staffing shortages, sure, but the slots are still the same as before.

The only thing she can think of is with more WFH, more people are noticing things wrong with their pets.

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

#225

Post by lotsofpulp »

falcolas wrote: post #160
tyrfing wrote: post #110

Earlier quoted context omitted.

Low single-digit operating margins aren't typically described as "so profitable" in any other context.

An average of 5.5% margin against revenue in the *trillions of dollars* is astonishingly profitable.

What is the purpose of comparing a profit margin percentage to nominal revenue?

Are you claiming that profit margin percentage should always go down in a competitive market as revenue goes up? Do you have sufficient knowledge about the scalability and marginal costs of a business to be able to make that claim?

Also where you getting "trillions" of dollars of revenue from?

UHC - $300B, Anthem - $145B, CVS - $300B, Cigna - $177B, Humana - $86B, Molina - $29B, Centene - $133B, Kaiser - $90B.

Total is ~ $1.3T for the biggest managed care organizations. They get much smaller after that. The fact that all of these organizations are publicly traded with public financials and they all have many years of consistent 5% or less profit margins is very high quality evidence of a competitive market with not much juice left to squeeze.

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

#226

Post by [deleted] »

SkyBelow wrote: post #220
jakear wrote: post #92

Earlier quoted context omitted.

There’s no element of choice. Calling around my local vets every one is 3+ month wait for new patients. Even existing patients have week or longer lead times. But of course if you choose Banfield (PE shitshow), they’ll see them same day (drop off in the morning, pet waits in kennel surrounded by other sick dogs all day until a vet is free, pet goes back to kennel to wait until end of day). The charge is significant,…

Where is the market for the vets who are a bit more expensive but only have a wait time of a few days, with emergency services available at a premium comparable to the PE's but with better treatment? Are we saying that vets would rather be unemployed than to work such a market or is something preventing them from serving that market or does the actual demand for such services not exist?

[deleted]

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

#227

Post by djcannabiz »

snapetom wrote: post #201
KennyBlanken wrote: post #190

Earlier quoted context omitted.

So many HNers are libertarian right up until it concerns something they need. Then it's "why do I have to pay for that!?"

I lost my shit at a redditor for complaining about a $500 overnight bill. $500 for a doctor and three nurses to watch over your animal like a hawk for eight hours, plus IV and medicine, is a damn bargain. I thought HN crowd would be smarter than that.

In which country was this in do you know? I don't know if a price like that is even possible in the states lol

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

#228

Post by snapetom »

jey wrote: post #14

Interesting. Doesn't Mars own a ton of specialty vet clinics too? (E.g. the VCA chain)

Mars was also forced to sell some emergency and speciality clinics about 3 years ago, too. Today's action isn't entirely unprecedented by the FTC.

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

#229

Post by jjtheblunt »

samstave wrote: post #204
pc86 wrote: post #185

Earlier quoted context omitted.

Good luck arguing with someone who says "FIAT" as if that's the ace up their sleeve.

An ace up my sleeve? Definitions mean something, until they don't. " What Is Fiat Money? Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it ." The Federal Reserve derives its authority from the Congress, which created the System in 1913 with the enactment of the Federal Reserve Act. This central banking "system" ha…

> starts with a P.

plebians!

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

#230

Post by snapetom »

djcannabiz wrote: post #227
snapetom wrote: post #201

Earlier quoted context omitted.

I lost my shit at a redditor for complaining about a $500 overnight bill. $500 for a doctor and three nurses to watch over your animal like a hawk for eight hours, plus IV and medicine, is a damn bargain. I thought HN crowd would be smarter than that.

In which country was this in do you know? I don't know if a price like that is even possible in the states lol

This was pre-COVID in suburban midwest, if I recall. On the low-end of the estimate, and nothing happened that required intervention, but certainly possible in the market location. Major city? Good luck.
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