Private equity firms are aggressively acquiring veterinary clinics, prioritizing profit over patient care and animal welfare, leading to increased costs, reduced quality of care, and burnout among veterinary professionals.
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Over the last 20 years or so, private
equity has ruined a lot of things. From
the countless restaurants and retail
chains they've bankrupted to the housing
markets they've manipulated and mobile
home parks they've infiltrated, all the
way down to the film and entertainment
companies that they now control. You'd
be hardressed to find a single industry
that isn't actively having the life
choked out of it by private equity firms
as we speak. But there's one industry in
particular where the meddling of private
equity firms is particularly egregious
and evil, and that's healthcare. But to
understand why this is a problem, we
first have to understand how private
equity works. Private equity firms are
known for something called leveraged
buyouts. A leveraged buyout or an LBO is
a type of investment where firms take
out a loan to acquire a company with a
specific goal to pump up the company's
valuation so it can flip it for a profit
within a few years time. It's basically
the exact same idea as taking out a
mortgage to buy a home, renovating that
home, and then flipping it for a profit.
And much like a house flipper who
doesn't really care that much about the
quality of the finishings in the home as
long as they can make it look good from
afar and sell it for top dollar, private
equity firms don't care about the
sustainability or the integrity of the
businesses they buy. They don't care if
they offer quality products and
services. They don't care if the
employees are treated well and well
compensated. They don't even care if the
business completely collapses in the
long run as long as they can squeeze
every possible dollar out of it before
that happens. And in truth, I think that
you could make the argument that the
world is better off without a TGI
Fridays on every corner. Good riddance.
But when it comes to healthcare, this is
a very dangerous game to play. For the
last number of years, private equity
firms have been aggressively buying up
hospitals, dental and optometry
practices, and even veterinary clinics.
And while these are all hugely
problematic in various ways, in this
video, I want to focus particularly on
that last one, vet clinics. And because
I can already hear you all getting your
knickers in a knot and whining, why
would you focus on best instead of
hospitals? Do you care more about
animals than people or something? The
answer is yes, I absolutely do. But
beyond that, the real reason I'm
focusing here is because of the speed of
these particular acquisitions. As of
2024, private equity firms are estimated
to own between 30 and 50% of all US
veterinary practices and 75% of the
emergency and specialist clinics. In
Canada, 40% of practicing veterinarians
now work for a corporately owned clinic.
The result of this is that in many
areas, it's now next to impossible to
find a vet clinic that is owned and
operated by an actual veterinarian. And
it's only going to get worse as these
finance firms continue their roll-ups,
as they call them. But why is this
happening? The answer is a lot more
complex than you might assume. Now,
while this video is focusing mainly on
veterary medicine, the truth is that the
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veterinary industry is in shambles right
now. All across North America, we're
seeing massive shortages of veterinary
care. The American Association of
Veterinary Medical Colleges estimates
that the US will need more than 70,000
new vets by 2032 to keep up with demand,
but less than 53,000 are currently
projected to graduate between now and
then. This was already a huge problem,
but it was made 10 times worse when over
the pandemic, seemingly everyone in
their neighbor decided to go get a dog
all at once. It got so bad that during
CO there were actually points where
emergency vet hospitals were actively
turning away animals that were in
critical condition simply because they
didn't have the capacity to treat them.
Like people would show up at the door
carrying their dog or cat who had been
hit by a car or was having a seizure or
choking to death or whatever other
terrible thing and they were told,
"We're so sorry, but we literally don't
have the ability to help you. We can't."
And to a slightly lesser extent, it's
still kind of happening now. But if
there's so much demand, then why don't
more people want to become vets? Oh
gosh, where do we begin with this one?
Just like human MDs, vets typically
graduate university with six figures of
student debt. But unlike human MDs, most
will never dream of making 300 or $400
or $800,000 a year. The median salary
for a human doctor in the US is $375,000
a year, where the median salary for a
veterinarian is just $125,000.
I'd make the argument that veterinarians
are generally far more educated than a
typical doctor, considering that they
have to be knowledgeable about multiple
species and to act not only as a GP, but
as a dentist, an optometrist, a surgeon,
a pharmacist, and so much more. They're
also at so much higher risk of being
bitten or [ __ ] on. Yet, they make
one-third the income and get notably
less respect. And let's talk about
respect. Here's a not so fun fact.
Veterinarians have the highest rate of
any profession. Between the trauma of
constantly seeing animals in distress
and performing euthanas and then being
routinely berated by resentful pet
owners who accuse you of being
moneyhungry or uncaring or who blame you
or accuse you of malpractice when their
pet passes. Yeah, I can see why people
aren't clamoring to that job. But we
need vets. So, it's a problem. So, now
here's where we're at. We have a massive
influx of aging vets looking to retire
and sell their practices. And not only
is there a shortage of new veterinary
graduates, but even those who are
entering the field don't have the
financial means to buy these clinics.
Between the obscene student debt and the
skyrocketing cost of well, really all
property, but especially commercial real
estate, it's completely unfeasible for
most young vets to buy a six or seven
figure business. But despite this,
veterinary services are in higher demand
than ever. So what happens? private
equity sees an opportunity. With
basically bottomless pockets, private
equity firms can make seasoned
veterinarians an offer they can't refuse
on their business. An offer so high that
even if the vet was previously
considering working something out
somehow and finding a way to help a
young doctor buy them out, that idea
goes completely out the window. Like
usually when a business is sold, its
valuation is calculated at 2 to three
times its annual revenue. Meaning that a
practice that brings in, let's say, a
million dollars a year would be worth2
to3 million if it was being sold. But
during the pandemic, private equity
firms were offering veterinarians a
valuation of up to 10 times their annual
revenue. And I mean, what would you do
in that situation? Would you endure all
the stress and aggravation of trying to
figure out how to sell your practice to
someone who can't even really afford it?
Or would you take your big ass check and
ride off into the sunset with millions
of dollars? I know what I would do. So
now many veterinary clinics are owned by
private equity firms. These firms have
way overpaid on paper, but you can bet
that they're not only going to make
their money back, they're going to make
a huge profit, too. After all, that's
their only goal. If they paid $10
million for a clinic that was
technically only worth 2 to 3 million,
now they need to find a way to make it
seem like it's worth 15 or 20 million so
they can flip it and make their money.
And they will. The basic laws of supply
and demand dictate that when supply is
low and demand is high, prices need to
increase. So, with a shortage of
available veterinarians, the
corporations immediately reach for that
low-hanging fruit and raise the prices.
The other unique thing about the
veterinary industry is that there's a
massive emotional component to the way
that people spend their money, which is
also a big reason why these investment
firms are so eager to get involved. And
listen, I'm guilty as charged in this
regard. As some of you know, Levi's been
really sick since September. And in the
span of 2 months, I spent over $7,000 on
his vet bills. He's my boy and when he's
sick, I'm willing to pay anything to
make him better. And well, private
equity firms love people like me and
they know that I'm not an anomaly. So
based on that, they raise their prices
again knowing that most of us will just
suck it up and find a way to pay them.
So all in all, the cost of veterinary
care has increased an average of around
60% in the last decade. And because
corporations are buying up the clinics
at such a rapid rate, there's little
opportunity for competition. So yeah, if
you've noticed your vet bills getting
higher and higher every year, well,
there's your reason why. And then of
course, the other triedand-true way to
increase profits in a business over and
above raising prices is to cut expenses.
So they do that, too. Where previously
the veterinarian who owned the practice
would make the employees schedules and
determine the policies and procedures
based on their expertise and what they
believe to be in the best interest of
their patients. Now these decisions are
being made by corporate. The corporation
may cut hours, leaving clinics
perpetually understaffed and the
employees overworked. They may eliminate
raises and discounts and benefits for
the staff. They may set time limits to
how long a vet is allowed to spend in an
appointment or implement charges for
things that were previously free, like
follow-up calls or medication dispensing
or nail trims. They may even set sales
targets that the doctors are required to
hit in order to earn bonuses or avoid
being reprimanded. Essentially forcing
them to upsell things that they
otherwise may not. The way the clinic is
run is no longer decided by a qualified
vet, but instead by an investment firm
who only cares about one thing, money.
And the result of this, like with most
businesses that get acquired by private
equity, is that many of the employees
get fed up and they quit. So in addition
to everything else, there ends up being
a rotating door of staff that are
unfamiliar with the office, unfamiliar
with the patients, and maybe even
inexperienced in general. And the
sediest part of this entire scheme is
that the veterinarians get blamed for it
all. They get accused of being money
hungry or uncaring when in reality
they're just employees and the
corporation is the one pulling the
strings behind the scenes. They don't
get to set the prices. They don't get to
make the calls, but they get to take all
the blame. And these [ __ ] finance
bros get richer and richer while animals
receive shittier care. People are price
gouged and vets lose their lives to
compassion fatigue and burnout. Earlier
this year, the CBC here in Canada aired
an in-depth investigative piece on the
corporatization of the vet industry and
the effects that private equity is
having on it. And to my surprise, it
brought forward a ton of defensive
backlash from veterinarians everywhere,
accusing the media outlet of slandering
the veterinary profession and
contributing to the public perception
that vets are putting money ahead of
animal welfare. But as someone who
watched the segment, that's not what was
said at all. Or at least that's not what
I took from it. I believe with 100%
conviction that the vast majority of
veterinarians genuinely have the animals
best interest in mind with everything
they do. I think that being a vet is
often a thankless job. And honestly, I'm
hardressed to believe that anyone in
their right mind would spend the time
and the effort and the money pursuing
this career and enduring all of the
trauma and chaos that goes along with it
if they didn't care about animals.
>> But I believe with equal conviction that
private equity firms don't give a flying
[ __ ] about anything other than their
bottom line. And so having them involved
in vet care or human health care or
housing or really anything else of that
nature is a massive conflict of
interest. And that's why this is a
problem. No matter how good and honest
the veterinarian is, private equity
firms don't care if animals are getting
proper care. They don't care if the
staff is overworked and underpaid. They
surely don't care if clients are being
extorted financially. In fact, they love
that. And when they own the clinics,
they make the rules. So the vets are
left with their hands tied. Here in
Canada, there are three main
corporations buying up all the vet
clinics. There's Vet Strategy, which is
majority owned by a Swedish private
equity firm called EQT Partners. There's
VCA Canada, which actually is not owned
by private equity, but by the Mars
Corporation, like as in Mars Candy Bars.
Surprisingly, the Mars Corporation is
still owned by the Mars family over a
century after it was founded, but
they're worth more than hundred billion.
So, don't think for a minute that that's
somehow better. Oh, and then there's NVA
Canada, which is owned by a German
private equity firm called Jab Holding
Company. Collectively, these three
corporations own more than 600 vet
clinics across the country. In the US,
the biggest players are Banfield and
VCA, which are also owned by Mars, along
with NVA, Vetcore, and several others
that are controlled by private equity.
And let me just say this, throughout
this most recent ordeal with Levi, we
went to a couple corporly owned clinics.
Our regular vet that he's been going to
his entire life is actually one of the
many vets that was bought out during CO.
And the emergency clinic where he was
hospitalized is one of the ones owned by
the chocolate company, which is actually
kind of messed up when you think about
it. But regardless, he received
tremendous care by almost everyone who
saw him. The doctors at our normal
clinic are phenomenal. I mean, they
always have been, but they really
rallied together to help him during this
particular time. The doctor in the ER
was excellent, too. I was really
impressed. But that's kind of my point.
The vets themselves are still doing
their best. A good doctor will always be
a good doctor no matter who signs their
paycheck, but they're still only human,
which means that they're still subject
to making mistakes or cutting corners
when they're tired and overworked.
They're only so many hours in a day. So
the bigger the workload, the less
attention each patient is going to get,
regardless of good intentions. That's
just math. And most pressingly, they
still have to follow policies that they
may not agree with if they want to keep
their jobs. 5 or 6 years ago, Levi's
bills probably would have been in like
the $4 to $5,000 range instead of over
seven. But wait, there's one more layer
to this onion, because of course there
is. Not only do private equity firms own
the vet clinics, but they also happen to
own nearly half of the pet insurance
companies. That means that if you pay
out of pocket, they can price gouge you
in the office. And if you have
insurance, they can still price gouge
you on premiums and deductibles. And
when you do pay with insurance, private
equity firms are technically just
funneling funds into other private
equity firms. Isn't that cool? Private
equity kills everything it touches. And
healthcare is probably the most
egregious example of this. Everything I
mentioned in this video is happening
equally in human hospitals and nursing
homes across the US. Healthare workers
get forced to work harder for less pay.
They get denied the right to make the
decisions for their patients that
they're qualified to make. They get iced
out of the opportunity to own their own
businesses and potentially make a better
living for themselves. The public gets
charged more money for a lower standard
of care. Vulnerability gets exploited on
both sides. And the only winner here is
the investors. It's literal blood money
in the purest sense, but blood money is
legal tender in North America, so no one
does anything to stop it. My intention
with making these videos is mainly to
educate and inspire discussion. There is
so much corruption in every corner of
the world that I think really will take
centuries to undo, and I, of all people,
don't have all the answers. But whenever
possible, I do like to try to end these
videos offering some sort of advice or
solutions if possible. So, here's what I
got. Before adopting an animal, make
sure that you've really run the numbers
on what it will cost to care for them
for their entire life. Think about
whether or not you can afford medical
emergencies, which can cost tens of
thousands of dollars, and have an
interesting way of always happening at
the worst possible times, like in the
middle of the night or on a long weekend
or whatever. I personally am not a fan
of insurance in general, and I don't
have pet insurance. But that's because I
keep a fully funded emergency fund. And
even still, I'm very aware that it's
possible that a single vet bill could
theoretically wipe out or even exceed my
savings. Insurance is a for-profit
industry, which, like I just mentioned,
is also often controlled by private
equity. That means that they are betting
on the fact that you will pay them more
over the course of your pet's life than
they will ever pay back out to you.
That's literally how they function. But
if you are someone who couldn't just
drop $10,000 all of a sudden to cover an
emergency, or if doing so would cause
you to miss your rent payment, or you'd
have to have your animal euthanized
because you can't afford the bills, or
even if you're just comforted by the
idea of not having to make that decision
on the spot during a time of crisis, get
insurance. Sometimes it's not about
optimizing every dollar. It's about
peace of mind. And that's priceless. And
considering the fact that more than 60%
of Americans feel that they're living
paycheck to paycheck and can't even
cover a $1,000 emergency, really, most
people should have pet insurance. If
you're on the search for a new vet, look
for one that's privately owned. The name
of the clinic and the branding generally
won't give you that information. So,
you'll have to either ask the staff or
do a bit of digging. But, in a lot of
cases, a privately owned clinic will be
a little bit less expensive, maybe a
little bit less busy, and the vet who
owns it will have more discretion about
how things are done. I've stayed at our
old clinic despite the buyout because I
have a good long-term relationship with
the doctors who work there. I like them.
They know Levi well and at his age and
with his health history, I really don't
want to start all over somewhere new.
But I am very aware that I'm paying a
premium there thanks to their corporate
overlords. The prices have definitely
increased significantly since the
acquisition. Most importantly, be kind
to your vet. Show appreciation for the
work they do. Treat them like a human.
If they don't own the clinic, they don't
set the prices, so don't give them grief
about the things they can't control. If
you have the right to take issue with
anyone, it's the private equity firms
and the rich [ __ ] investors who
profit massively from your pet being
sick and you being heartbroken and
vulnerable. Really, I think that the
only way out of this mess is to revamp
the entire veterinary industry. Vet
school needs to be more affordable. Vet
salaries need to be higher for the work
they do. And oh my god, vet techs barely
make above minimum wage, which is
criminal if you ask me. There needs to
be more incentive for people to get into
the industry so there's more competition
and more supply which will solve the
shortage issue and hopefully make vet
care a little bit more affordable. There
are some states and provinces that
require vet clinics to be owned by vets
and dental offices to be owned by
dentists and doctor's offices to be
owned by doctors, etc., etc. And I think
that that should be the case everywhere.
I think that's common sense. But as we
all know by now, common sense isn't very
common. And money talks, but it don't
sing and dance and it don't walk. And as
long as I can have you here with me, I'd
much rather be forever in blue jeans.
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