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News / Life / Pets & Wildlife

Vets fret as private equity snaps up clinics, pet care companies

By Anna Claire Vollers, Stateline.org
Published: April 7, 2024, 6:06am

HUNTSVILLE, Ala. — About a year ago, veterinarian Melissa Ezell started noticing subtle changes at the midsized animal clinic in Huntsville, Alabama, where she works.

She said she and other vets were feeling pressure from management to make a certain amount of money from every appointment. If a pet owner wasn’t going to spend enough, the message from management was to offer more services. She was urged to pack in more patients outside of normal business hours.

“Before, I never felt any pressure to be making a certain amount of money in a day,” Ezell, who started working at the clinic in 2021, told Stateline. “It was just, ‘Fill your schedule, practice good medicine, everything else will come.’”

The clinic is owned by National Veterinary Associates, one of the largest veterinary chains in the nation. In 2020 the company was acquired by JAB Consumer Partners, a global private equity firm based in Luxembourg. By early 2023, Ezell said, she felt a shift in atmosphere at the clinic and a greater focus on increasing profits.

Private equity’s foray into the human health care industry in recent years has drawn public outrage and legislative scrutiny as firms have been blamed for increasing prices, slashing services and shuttering hospitals to maximize shareholder profits.

Now, some veterinarians and advocates are sounding the alarm that private equity’s entry into the pet health care industry could lead to similar results.

Some states already have laws that prohibit non-veterinarians from owning veterinary practices, and some consumer advocates want states to review large-scale acquisitions in the industry.

“A large number of these funds are seeing veterinary medicine as a good profit center,” said Dr. Grant Jacobson, an Iowa veterinarian who serves on the board of the Independent Veterinary Practitioners Association. He said he’s seen corporate-owned chains in his region drive up prices for consumers, suppress market competition and skirt state laws that ostensibly prohibit veterinary practices from being owned by non-veterinarians.

Private equity firms such as Shore Capital Partners, KKR, TSG Consumer and JAB Consumer Partners have spent billions over the past few years on veterinary practices, specialty animal hospitals, pet insurance services and pet food companies. Among the companies owned by private equity are PetSmart, PetVet Care Centers, FIGO, Thrive Pet Healthcare and ASPCA Pet Health Insurance.

Private equity firms say those investments are giving clinics and other providers the capital they need to buy better technology, and that they are improving efficiency. And in many cases, corporate chains can offer their employees better workplace benefits, such as health insurance.

In a statement to Stateline, National Veterinary Associates said its corporate philosophy is “grounded in vets making medical decisions and not a corporate office,” and that its program of shared ownership by veterinarians is “the industry’s largest such program and unique among our peers.”

“Our vision is to build a community of hospitals that pet owners trust, are easy to access, and provide the best possible care,” National Veterinary Associates said in the statement.

JAB Consumer Partners did not respond to Stateline’s request for comment.

More pets, more money

Private equity uses pooled investment money from pension funds, endowments and wealthy individuals to buy controlling stakes in companies. The firms typically look for a quick return on their investment before selling it within a few years. They have been gobbling up small businesses in myriad industries in recent years — from nursing homes to car washes.

As pet ownership soared during the COVID-19 pandemic, private equity followed close behind. The pandemic years of 2020-2022 were “the peak years for private equity acquisitions of veterinary services and practices,” said Michael Fenne, senior coordinator for health care at the Private Equity Stakeholder Project, a nonprofit watchdog group that advocates for communities affected by private equity ownership.

Americans spent a record $147 billion on pet products and services last year. From 2017 to 2022, private equity spent $45 billion on deals in the veterinary sector, according to PitchBook, which tracks investment data.

The vet industry is attractive because it’s mostly made up of small, privately owned businesses that corporations can buy and consolidate into larger chains. And it’s mainly a cash-based business: Unlike in human health care, veterinary customers typically pay out of pocket, rather than rely on third-party payers such as insurance companies.

In some cases, private equity firms and other corporations buy community clinics from the veterinarians who own them for two, five or even 10 times their value. Then the firms roll them up into a larger chain of clinics that can corner a regional market.

It’s a strategy that can push other private owners out of the business, said Jacobson, the Iowa veterinarian. He spent nearly 20 years working at a privately owned practice in Iowa and had hoped to buy it when the original founder retired.

But the founder sold the practice to a large veterinary chain owned by Mars Inc. — the private company best known for owning candy brands that include M&Ms — for more than $1 million above his offer, Jacobson said. Mars, while not a private equity firm, is the biggest consolidator of pet care companies in the United States, owning pet food companies, pet pharmacies and veterinary care clinic chains such as Banfield Pet Hospitals and BluePearl.

About a quarter of general veterinary practices and about three-quarters of specialty practices, such as emergency and surgery care, are now owned by large corporations, according to John Volk of Brakke Consulting, a veterinary management consulting firm.

Some private equity-backed chains, such as National Veterinary Associates, buy community-based veterinary practices like Ezell’s without rebranding them under the chain’s name. As a result, clients might not be aware of the ownership change.

“It can appear you’re getting community-oriented care when there’s actually this set of big-box incentives underlying [the clinic] that comes from their private equity owners,” Fenne said.

Where vets want to work

Lori Kogan, a clinical sciences professor at Colorado State University’s College of Veterinary Medicine and Biomedical Sciences, surveyed nearly 900 veterinarians in 2022 about their experiences and perceptions of corporate vs. privately owned veterinary clinics.

Even though most of the veterinarians surveyed reported working for corporate-owned clinics, Kogan found more than half said they would prefer to work in privately owned clinics. The benefits offered by corporate chains, such as health insurance, didn’t seem strong enough to override other preferences, Kogan told Stateline.

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“Feeling like they have a voice in decision-making, feeling like they’re recognized as an individual, those are things that are really important to people,” she said. “I think corporate ownership could accomplish those things, but it will take paying attention.”

Ezell, the veterinarian who left National Veterinary Associates, said the pressure has an impact on patients and their humans as well.

“Either you’re getting talked into additional services that may or may not actually be necessary, or your feel like you’re being rushed,” Ezell said. “You feel like you don’t have the time with the doctor, and you leave not fully understanding what was done to your pet or what is wrong with your pet if they’re sick.”

In its statement to Stateline, National Veterinary Associates noted that it has made “continued investment in technology and infrastructure, pioneering clinical research, industry-leading continuing education programs and wellbeing initiatives.”

Could states step in?

Last August, Thrive Pet Healthcare announced it would be closing the only 24-hour emergency veterinary clinic in the Rochester, New York, metro area. Thrive is a chain of more than 500 veterinary clinics and hospitals based in Austin, Texas, that is owned by private equity firm TSG Consumer.

“The thought of having the only 24-hour emergency pet care center in our entire metro area close was really scary,” said Rachel Barnhart, a Democratic member of the Monroe County Legislature in New York who has taken her dogs to the clinic. “We are a community of more than a million people. The idea that we can’t support a 24-hour pet facility is outrageous.”

Barnhart wrote a letter to the Federal Trade Commission, asking it to look into Thrive, which operates more than a dozen clinics in Rochester. She said she’d seen the FTC act against anticompetitive practices in the veterinary industry elsewhere, and she felt Thrive deserved similar scrutiny.

Thrive leadership said in a letter to Barnhart and in media reports that a shortage of ER veterinarians made it impossible to hire enough workers to keep the 24-hour clinic open. But Barnhart suspected the company wanted to shutter the clinic because its staff recently voted to unionize. CEO Tad Stahel said in the letter to Barnhart that the closure was unrelated to the staff unionization.

In 2022, the FTC took action against JAB Consumer Partners, which recently acquired an array of veterinary and pet service companies. The FTC required the firm to divest some of its vet clinics in California, Colorado, Texas, Virginia and Washington, D.C., as a condition of approving its multibillion-dollar purchases of two other multistate veterinary care chains.

If states were to authorize officials or agencies to review similar large-scale mergers and acquisitions in the veterinary industry, that “would be a good first step” toward protecting consumers, said Fenne, of the advocacy group.

Many states already have laws that prohibit non-veterinarians from owning veterinary practices, including Iowa, Minnesota, New Jersey, New York and North Carolina. The idea is to prevent corporate interests from guiding veterinarians’ medical judgment.

Experts and advocates expect to see further corporatization in veterinary care as more companies acquire not just vet clinics, but also other businesses across the pet care spectrum.

In February, asset management behemoth Blackstone Inc. acquired Rover, the nation’s largest online platform for pet sitting, dog walking and other services. In the past two years, JAB has acquired several of the largest pet insurance companies in the United States and Europe.

Ezell, the Alabama veterinarian, eventually decided to take a job at another clinic in town that’s privately owned. She will start there in a few weeks.

“Not all corporate medicine is horrible, and you can find amazing veterinarians and caring support staff anywhere,” she told Stateline.

“But it’s easy to lose sight of your values. The whole reason we’re doing this is we want to make a difference in animals’ and people’s lives. If we’re unable to do that, shouldn’t we try to fix that?”


Stateline is part of States Newsroom, a national nonprofit news organization focused on state policy.

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