If you’re a pet owner, you know you treat your pet like family.
According to the American Pet Products Association 2021-22 National Pet Owners Survey, 70% of American households – roughly 90.5 million families – own at least one pet. This percentage has inched up from 56% of households in the U.S. in 1988 – when the survey was first commissioned – to 67% in 2019.
Plus, the data says demand for pet care continues to increase. With all this demand, experts say the landscape of veterinary care seems to be making a shift.
How is veterinary practice-ownership shifting?
Mark Ziller, co-founder and CEO of Innovetive Petcare, an Austin, Texas-based company that owns and operates over 75 animal hospitals across 16 states, tells FOX Business that there has been an accelerating trend of consolidation of independent veterinary practices by regional or national companies.
"Similar trends have occurred among dentists and (human) urgent care practices," Ziller said. "This trend is not happening because independent veterinarians are facing particular challenges in the market but rather because running any small business is difficult and larger companies have access to additional resources that are not affordable for most small businesses."
What are the advantages to vets?
According to Ziller, veterinarians will choose to partner with, or sell to, a larger group like Innovetive Petcare for different reasons.
"Some seek an exit strategy allowing them to retire while ensuring that the legacy of their practice is maintained, their clients continue to get excellent service, and their staff is taken care of moving forward," he said.
Others partner with a larger group that can handle the business and administrative work, allowing them to focus their time and energy on practicing veterinary medicine, he says. As an example, Ziller says Innovetive Petcare provides practices with an entire range of services to help its practices thrive in their local markets– services such as marketing, HR, recruiting, purchasing and vendor negotiation.
What can old-school vets provide customers that national companies may not be able?
Ziller told FOX Business that ultimately pet owners tend to go to veterinarians that provide excellent care to their pets and have good customer service and "bedside" manner.
"No one has a monopoly on good medicine and good customer service…independent veterinarians can very much compete with national groups in those key areas," Ziller continued. "The independent veterinarian may not have access to the resources of a larger group, but they can compete."
Why are independent veterinarians facing a challenging time in the market?
Dr. Elliott Garber, vice president of strategic partnerships at Instinct Science, is a veterinarian, author and Army officer in Charlottesville, Virginia. Garber said the biggest challenges for all veterinary practices right now are in hiring and retaining veterinary team members.
"Human hospitals were not the only health practices largely impacted by COVID-- we saw a perfect storm in 2020 lead to record caseloads and overwhelming demand for veterinary services across the country, which has contributed in part to the ‘great veterinary shortage’ for the last few years," reported Garber.
He said this shortage extends from veterinarians to other experienced veterinary technicians, practice managers and front desk staff.
"Independent vets have been at a disadvantage here as it can be difficult for them to compete on hiring, with the generous signing bonuses and benefit packages now offered by many of the corporate groups," Garber added.
What’s the impact on pet owners?
The good news for pet owners is that a variety of choices continue to be available for pet care. "The majority of veterinary practices are still independently owned, and among both independent practices and larger groups, there is a lot of variety in how practices or groups operate," said Ziller.
He said some large groups have a client-facing national brand (such as Banfieldor VCA), but other groups, such as Innovetive Petcare, maintain the original and local practice's brand and culture.
"A client of one of our practices might not even know that their veterinarian has joined a more extensive group…when they take their pet to the vet, the practice has the same name, and they still get the same great care from the vets and staff that they always have," Ziller said.
How do solo veterinary practice owners fare in this market?
Dr. Sehaj Grewal, an independent veterinarian who owns and operates The Melrose Vet in Los Angeles said there is a big challenge for small animal hospital owners due to the scarcity of vets to fill in the void.
"Every practice is struggling including myself and there are several recruiting agencies and vets charging exorbitant amounts of fees to recruit one single vet," Grewal told FOX Business.
But, he said old-school vets can still provide that personalized and family-oriented approach to the pets and the clients.
"I think more pet owners prefer smaller non-corporate practices because they are able to build trust and loyalty with that practice, doctor and the staff," he explained, but acknowledged there are challenges.
"The problem sometimes is a lot of these smaller practices are short-staffed and burnt out due to the high demands so sometimes that can affect the service."