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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

#251

Post by snapetom »

kaashif wrote: post #245
wing-_-nuts wrote: post #236

Earlier quoted context omitted.

>Don't blame the vet for charging $5000 for a surgery. Blame owners who can't afford to raise a pet but have one anyway. What an utterly callous statement. We're mostly well paid professionals here on HN, but to suggest that the average american should be able to come up with $500, much less 5k, on a moments notice is laughably out of touch with most people's financial situation.

There is an even more callous meaning that you didn't pick up on for some reason - they're not suggesting the owners should come up with $5000, they're saying the owners should kill or otherwise get rid of their pets once they can't afford them. I think people are missing that the point here is that the prices aren't being set in a competitive market, so $5000 may just be a monopoly price. Maybe pet owners should be…

Calling that a monopoly price shows ignorance on what a monopoly is. Even large metropolitan areas have just a handful of emergency vet hospitals. Emergency vet hospitals don't have an army of vets on standby to handle cases. 2-3 is common and they might be just interns/residents supervised by a more experience vet. Scarcity and lack of supply have a much greater effect than collusion.

Pet owners should know this before getting a pet, or properly plan.

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

#254

Post by zippergz »

dhosek wrote: post #175
shakes_mcjunkie wrote: post #82

Earlier quoted context omitted.

> 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…

My brother owns Merrick Animal clinic in Brookfield. The other thing to investigate would be independent vets doing house call practices which, assuming you can find one, would be cheaper than a clinic and much less stressful for the animals (my brother did that before buying Merrick 14 years ago).

We have used house call vets for many years, and they are wonderful in terms of experience for the animals. However, in my experience they are universally far more expensive than clinics (which we still go to sometimes if it's semi-urgent and our mobile vet is not available).

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

#255

Post by danielmarkbruce »

gwd wrote: post #222
Ericson2314 wrote: post #116

Earlier quoted context omitted.

"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…

It might make sense to split it into "professional services" v "business". Legally it's hard to tell them apart, but people tend to know the difference.

It makes sense for some businesses to actually be an "asset" - eg Coca Cola company. It is a reasonable argument that it doesn't make sense for a vet practice to be an "asset". Nor a law firm.

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

#256

Post by pclmulqdq »

verve_rat wrote: post #250
astrange wrote: post #212

Earlier quoted context omitted.

You can’t have a monopoly in an industry with no barriers to entry. Cartels aren’t stable because every newcomer has an incentive to defect.

It costs more than zero dollars to set up a new vet clinic. I'd bet a bunch of the shit they need is really expensive.

Capital alone can't maintain a cartel. Investors can partner with doctors to set up a new vet clinic to help break the cartel, and there are significant rewards for both. In turn, the competition lowers prices across the board. Cartels are essentially a prisoner's dilemma without rules (like licensure) enforcing them.

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

#257

Post by trhway »

conductr wrote: post #180
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.

I’ve hands on done these roll ups in mass (a ton of tiny M&A deals) and I would not characterize the physicians that way at all. They are generally fairly savvy small business owners and they always saw their practice as a retirement/nest egg. They also tend to burn out on all the insane regulations/insurance/employer/etc hoops they have to jump through and as a small business they tend not to have negotiating power…

As result of the acquisition you may notice appearance of a business practice manager - a non-vet guy lurking behind the nurses and doctors at whom they all look trying to understand whether he approves or disapproves each and every action they do/say.

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

#258

Post by dantheman »

acegopher wrote: post #210
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. This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets.

Almost all healthcare spending is not on emergencies.

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

#259

Post by ROTMetro »

pc86 wrote: post #218
Natsu wrote: post #191

Earlier quoted context omitted.

If someone recommends "don't do that" and you do that anyway, you can't reasonably blame their advice for being wrong because things went wrong when you did the thing anyway and then justify it with "well, sometimes people don't listen to your advice, so clearly it's not good enough, we really need to do more of the thing you advised against to fix this."

Are you saying that capitalism means completely open, zero regulation, zero licensure markets? Because it absolutely does not. It means (among other things) a competitive market with minimal information asymmetries between producer and consumer. Regulation can at time help this, e.g. requiring information disclosure, or preventing monopolistic practices. Just because a lot of regulations are bad (or enforced poorly)…

If your intent is to capture the market so that you can set the price, that is not capitalism. If licenses are limited, then the amount any one business can own should be limited. Having the ability and using it to artificially limit competition is called a cartel and should be illegal in the USA. An artificial limit on the amount of competition allowed capitalism.

See taxi medallions. Another example for a long time would have been FAA approval of new aircraft type certificates and the requirements creating a huge barrier for entry to get them that artificially prevented competition.

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

#260

Post by ROTMetro »

pclmulqdq wrote: post #147
amelius wrote: post #105

Earlier quoted context omitted.

Dentists will go down the same route.

Dentists seem to generally be decent businesspeople, while doctors and vets aren't, so they may resist PE buyouts for a while.

Dentists are the worst up sellers of all. Before moving, I had all of my family checked out at the dentist we had for years. When we moved our new dentist found a lot of 'work' that needed to be done. When we asked him to consult with our old dentist to compare notes it got real awkward.
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