Thread

1. rrrrrrrrrrrryan · 1789953795 · focus · HN ↗

   It's actually worse with veterinary practices.

   Younger veterinarians are drowning in school debt and can't buy the practices from the older folks that are retiring. So, private equity is basically snatching all of them up right now, betting that childless millennials are going to pay tons of money on veterinary care when their pandemic pups begin to reach end-of-life.

   They're going to cut wages for all the staff, and hike all the prices, because unlike with human medical care, there's hardly any regulation (yet).

   1. beloch · 1789954413 · focus · HN ↗

      Up here in Canada, we've seen vet clinics rapidly go corporate in the last couple of decades. Even ignoring prices, the degradation in the quality of care offered is stark. Vets working for corporate clinics are heavily micromanaged. They get less time per animal, are pressured into certain diagnoses and prescriptions, etc.. A lot of us now refuse to take our pets to clinics that aren't owned by the vets working there. Unfortunately, in many places there aren't a lot of options.

      To put humans through this kind of misaligned system is the stuff of nightmares.

      1. datsci_est_2015 · 1790028799 · focus · HN ↗

         > To put humans through this kind of misaligned system is the stuff of nightmares.

         And also the natural market equilibrium, apparently.

         1. Ey7NFZ3P0nzAe · 1790029509 · focus · HN ↗

            There's nothing natural about this

            1. datsci_est_2015 · 1790084942 · focus · HN ↗

               I would say there’s nothing humane about this, but there’s a certain section of the population who read too much Ayn Rand at too impressionable an age, or saw Wolf of Wall Street as aspirational, that very much rationalize their own behavior as natural.

               1. ipsod · 1790109683 · focus · HN ↗

                  Doesn't strike me as Randian. She idolized builders and doers, not exploiters.

                  So... Musk, perhaps... but not this PE enshittification.

   2. limagnolia · 1789956107 · focus · HN ↗

      What is so costly about a veterinary practice that new veterinarians can't just start their own? Why would they need to buy one? There is certainly some benefit to working for some one for a while, and maybe eventually buying out an established practice... but if they want too much for it, just start your own?

      1. selectodude · 1789956285 · focus · HN ↗

         Dogs use the same x-ray machines that people do.
      2. randerson · 1789958697 · focus · HN ↗

         If you start your own veterinary practice, and eventually build up a steady stream of happy customers, then sooner or later the PE firms will come knocking on your door, too.

         Imagine you're drowning in student debt and worrying about keeping your business afloat, when someone offers you $5M, and says you'll still get to work with animals, which you love, while they take care of the financial and business side, which you didn't enjoy. It's a no brainer for most people.

         1. bitmasher9 · 1789960983 · focus · HN ↗

            No way. I think most people realize “they are offering me $5M because they know they’ll make a good profit on this business. That means it’s worth more.”

            1. my123 · 1789961421 · focus · HN ↗

               It's worth more with business practices that the current owner wouldn't be willing to do.
            2. DaedalusII · 1789961466 · focus · HN ↗

               it is worth more, but you have to do 100% of the work to get 25% more upside.

               Or take $5m and get no more upside and 70% less work. The "work" here is dealing with regulations, insurance companies, administration, payments, and accounting, not actually looking after dogs

               the PE model is often to provide a competent regtech/administration core and then plug heaps of regulated businesses into it and centralise all the admin

               imagine opening a vet in SF in 1950 in a cheap shoplot and people just paid you with hard cash or cheques in person, you wrote receipts with a biro, and filed taxes once or twice a year on a few sheets of paper... compared to now

            3. throwaway13337 · 1789961844 · focus · HN ↗

               I think that's true to an extent. And, especially successful people, often would rather be their own boss for less money than to be a corporate cog. Having the freedom to make ethical judgements yourself and build local community is a real luxury. We are, mostly, just social animals that want to build our status by helping each other out in the end.

               Two things, I think, might make the decision for them, in spite of that:

                 - The money is actually more than their business could be projected to make alone. This is because the PE firm isn't just buying the single practice but every practice in the area to kill competition. Get that captive market and you can charge more.
               
                 - The personal ownership freedom can be already lost on these independent people if they feel they are already tied down too much. I know this is especially the case in small medical offices where insurance and regulation can over-rule them. Feeling like you don't have control in this way can cause a lot of depression (tangent but look up how we condition mice in order to test treatments of antidepressants on them). At that point, the monied exit starts looking like a better option.
               

               That's how cynicism can win out. And we all lose.
            4. randerson · 1789963614 · focus · HN ↗

               Indeed. But remember a PE firm has economies of scale because they own many vet practices. They can negotiate better rates with suppliers than you can, and better payment terms. Maybe they even own some of those suppliers. They can divide their advertising costs by all the practices they own, whereas you can't.

               Even if you were willing to be as ruthless as a PE firm, raising your prices and sacking half your staff, and even if you were somehow an expert in financial engineering and business optimization, you still won't make the business as profitable as they can.

      3. bitmasher9 · 1789960854 · focus · HN ↗

         * Most small brick & motor businesses do not turn a profit in their first 2 years. So you’ll need a significant amount of runway, in a business where raising capital isn’t guaranteed.

         * There’s probably more cost in medical supply, equipment, and certification than you’d expect. There’s standards for security of the medications.

         * Most veterinary clinics have staff. That’s payroll expenses.

         * Any new business will need marketing. You’ll probably want a large sign/billboard, a decent website, and social media.

         * Just leasing office space and furnishing it is surprisingly expensive.

   3. kirubakaran · 1789958430 · focus · HN ↗

      My life goal that I can't work on yet is to run vet clinics as a non-profit in locations where private equity has a monopoly and are in extraction mode. With operational excellence, I think they can be out-competed by running a cost effective practice, so people don't have to decide between putting their pet down prematurely, and spending $5k per night (yes, that happened to my friend in San Francisco. $5k/night is not an exaggeration).

      The predatory businesses are able to do the extraction only because of the practical monopoly they have in a neighborhood.

      I believe the ops can be open sourced and replicated franchise style. And vets, who originally get into the career because they love animals will be drawn to it, and they have bills to pay, but that can be taken care of with a reasonable payment structure.

      I hope someone else does this so I don't have to. But I think I have to at some point. I'd also love to hear if this is a dumb idea.

      1. nradov · 1789959516 · focus · HN ↗

         Good luck to you and I sincerely hope that you succeed. It's not a dumb idea.

         But on the human side many health systems are non-profit, and they generally aren't any cheaper or better quality than their for-profit competition. The real problem is local market power and lack of anti-trust enforcement.

      2. duncangh · 1789985165 · focus · HN ↗

         I’be been similarly interested and long ruminating about whether it would be possible to achieve something similar to this in the restaurant industry. For example to have a non profit operating a franchise of a fast food location and instead of having thw 20% corporate tax rate and profit going towards retained earnings and dividends to instead be reinvested in the mission which would be better, more nutritious ingredients to better healthily feed your local customers and two to provide the staff a livable wage. Like you, I keep turning it over in my head and contemplating it rather passively as it’s way outside of my lane of Data Engineering, but I’d like to think that the market would eventually identify this as viable if it at all would be. With the ever looming fear of layoffs and future of future employment in writing software I keep thinking about that scene of the firing in “Up In The Air” where the guy they let go had always dreamt of being a chef and was finally able to pursue it after getting laid off from his high paying job that he had come to hate. Typed on my phone with my cat on my lap ; so plz excuse any run on sentences or imperfections.
      3. paimapi · 1790005687 · focus · HN ↗

         I love this idea but I think the PE angle also means suppliers and vendors will charge them far less for bulk order and those suppliers/vendors themselves may be a horrible little mix of MBA-brained owner practices that actively upcharges small businesses who have far less negotiating leverage

         I think the only way to do it is to have your neighborhood actively being okay with seeking local services something that a lot of neighborhood groups I frequent seem to be a big fan of (farmer's markets are an indication of this - if there's strong and regular FMs being hosted, there's people willing to burn a little extra disposable income for better, more reliable products)

      4. jfil · 1790114363 · focus · HN ↗

         I'd be curious to hear of your progress on this idea. Its not dumb, and it sounds similar to what co-ops do.

         >I hope someone else does this so I don't have to.

         This is a type of challenge I've been thinking of a lot. A "you have to dedicate your whole life to becoming X" challenge - I had the thought of doing something similar here in Canada with groceries. An obviously profitable business where the challenge is "how do you resist a sweetheart buyout" when the cartel comes knocking with cash...

   4. darth_avocado · 1789962132 · focus · HN ↗

      Yes please, add vets to the bill. The problem you’re describing gets exacerbated when PEs buy practices. They undercut the very few other surviving practices and remove any ability for new practices to open up. In the last 3 years, we went from 10 to just 3 emergency vets in a 20 mile radius. Now if I need to go to an emergency vet, I drive half an hour if there’s no traffic and pay $200 to just be seen.

      This insanity is creating a crisis amount of pets being abandoned, and then euthanized by the animal services. People can’t afford to have pets anymore.

   5. anon291 · 1789962408 · focus · HN ↗

      no amount of public money needs to be spent on companion dogs who can be cheaply euthanized.
   6. mlsu · 1789964798 · focus · HN ↗

      I visited the veterinarian recently for a routine exam of my dog. The vet gave the exam and at the end of it, a technician handed us what looked like an invoice. The invoice had like 12 different items on it and totaled $1,400. No explanation, and no differentiation between items.

      We were flabbergasted. Asked the tech what was optional or what was required as part of our visit and he said, oh, just the top line item for the exam. $95.

      It has to be illegal to do that. I feel like next time I go in there they are going to give me the ol' Clark Stanley runaround.

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