Here to Stay: Independent veterinary practices
Independent veterinary practice owners stand tall amidst consolidators.
Consolidation of veterinary practices continues. Last year, consolidators acquired between 800 and 1,000 independent companion animal practices in the U.S. and now account for nearly 50% of companion animal practice revenues, according to Brakke Consulting. The trend was expected to continue this year.
But to predict the demise of independent practice ownership would be to ignore the determination of veterinarians such as Vanessa Rizzo, DVM, founder of Hope Veterinary Oncology Services in Lacey, Washington.
“I resisted owning my own practice for years,” said Dr. Rizzo, who practiced in corporate settings before founding a mobile veterinary practice to serve patients in the Pacific Northwest in July 2021. “I never thought I was capable of it and certainly didn’t think I would enjoy it. But my experience has been quite the opposite. I love owning my own practice and being in more control of my work life.”
Corporate owners indeed have much to offer veterinarians, including student debt relief, good benefits, back-office support, upgraded equipment, mentoring, and predictable hours. Selling to a corporation can be an attractive exit strategy for doctors approaching retirement. And corporations aren’t shy about promoting themselves. “Many begin to recruit veterinary students during their sophomore year with pizza lunches, free T-shirts, etc.,” said Justin Toth, DVM, founder of Dallas Highway Animal Hospital in Powder Springs, Georgia. “Independent practices rarely have the means to compete with such recruiting tactics.” Even so, they have much to offer.
Bonnie Bragdon, DVM, MS, co-founder of the Independent Veterinary Practitioners Association, believes that independent practices may feel they are at a disadvantage when it comes to technology, such as telehealth, the cost of supplies, and the mindshare of the consumer of veterinary healthcare services. “While these concerns are warranted, independent practices should recognize they have a real advantage in their ability to build a workplace culture that attracts top talent and customers. They can own their medicine, practice, and lifestyle rather than following the formularies and financial goals established by large national practices.”
After a successful career as a practice owner, Dr. Bragdon transitioned to a career in veterinary pharmaceutical and device commercial operations. She helped found IVPA in 2018 to offer independent practice owners benefits such as discounts on products and services, educational opportunities, and marketing support. The association has about 500 hospital members.
“My passion for independent practice is innately tied to my Yankee upbringing and can-do childhood,” she said. “Growing up in rural Maine, my family always valued hard work, independence from corporate work, and placing lifestyle over employment. One of my parents’ first dates was my mom hanging out with my dad while he worked in the local graveyard to dig a grave by hand.
“Veterinarians value relationships, community, and personalized medicine. Keeping independent veterinary practices healthy and strong will ensure everyone has access to veterinary care no matter their socioeconomic status or the value they place on their animal – all the way from the lowest to the highest level.
“IVPA is working on adding services and benefits to keep practice ownership profitable, including teleradiology consultations, negotiated pricing with suppliers and other service providers including insurance and retirement benefit options. The future is so bright you gotta wear shades!”
Dr. Rizzo completed a three-year residency program in medical oncology at Cornell University and since then has worked as a board-certified veterinary medical oncologist in the Pacific Northwest. After working at two corporate practices, she started Hope Veterinary Oncology Services. “I wanted to live and work by my own core values and not try to tolerate working with others who don’t share my values,” she said. She services patients in Sequim, Silverdale, and Lakewood, Washington, out of Hope Mobile, a mobile veterinary oncology unit.
“When I first moved to western Washington, I quickly realized that commuting is not necessarily as easy as it may first appear. The inlets of Puget Sound dictate the location of the roads. So while point A to point B may be 5 miles as the crow flies, it’s a 30-mile drive or longer.” Elderly people can find that difficult, especially at night. “Many of my patients need weekly treatment, which is challenging for many families who would have to drive an hour or more. In addition to reducing the stress on the humans, I want to reduce the stress and anxiety on the patients who come in often.”
Dr. Rizzo drives the mobile clinic to Silverdale and Lakewood weekly; a technician and assistants meet her there. She visits Sequim every three weeks, picking up staff along the way. In addition, she does house calls on Mondays for patients who are particularly anxious at the veterinary clinic.
“I absolutely love seeing these patients in their home environment. In the clinic they’re pacing, panting, drooling, difficult to handle, not taking treats, whining, etc. In their home, I see their more common personality and why the family loves them so much. It’s very rewarding.” But house calls are also a challenge. “We spend a lot of time driving from one location to the other, so this is a work in progress.”
Independent practices have difficulty obtaining competitive prices from vendors, not only for labs, diagnostics, and products but also 401(k)s and group health insurance plans, said Dr. Rizzo. But the benefits of independence outweigh the difficulties.
“When I worked for corporations, I had no control over how the team was treated, paid, or rewarded,” she said. She disliked the pressure to produce a certain amount of revenue, even if it meant ordering unnecessary tests. “Sometimes practicing excellent medicine means taking a step back and not running every test imaginable or treating right away. I no longer feel pressured to do anything, something, or everything. I evaluate each case, talk with the family, and we develop a diagnostic and treatment plan that makes sense. I don’t think I practice any differently than I did when I worked for a corporation, but I feel differently about it.”
Another IVPA member – Grant Jacobson, DVM – founded The Hometown Veterinarian four years ago in Marshalltown, Iowa, not far from the farm on which he was raised. “This area is my home,” he said. “I like the generally slower pace of the Midwest and have never been a city person. It is a great place to live, grow, and raise a family.”
Dr. Jacobson was an employee for 19 years at a practice in Marshalltown and expected to purchase it when the owner retired. However, when that time came, a corporation offered more than $1 million more than he had offered for the practice. Rather than accepting an employment offer from the new owner, he opened a practice of his own. About eight months later, in October 2018 he opened The Hometown Veterinarian, which now staffs three full-time veterinarians and about 20 lay staff.
“As long as I had planned to be a veterinarian, my plan was practice ownership,” he said. “I have an entrepreneurial spirit and did not see myself spending an entire career as an employee. While purchasing an existing practice would have likely been the safe option, going full startup allowed me to establish things on my terms and practice the way I wanted to.”
Dr. Jacobson believes that as an independent practice owner, he holds an advantage in building and maintaining client relationships. “We based the entire philosophy of our practice upon building those relationships. We are not about punching a timecard and calling it a day. We are all members of the community, and people know us as those who they go to church with or whose kids were on the same sports teams. We are vested in our community instead of an opportunity for a venture capital investment.”
Maintaining price competitiveness with larger competitors can be a challenge. “I am frustrated by the lower rates the corporates can pay for goods,” he said. “I can guarantee that my practice sends an equal or larger number of the name-brand product out the door compared to my local competition, yet they get access to much lower prices.”
But at the same time, with greater control over their practice’s financial operations, independent owners can keep their costs and prices in check. “I still see every invoice and every paystub,” said Dr. Jacobson. “I understand costs and income as they happen and can adjust quickly and accordingly. When the price of goods-sold changes, I can adjust our pricing up or down to maintain a fair pricing structure for my clients, my staff, and myself.”
Justin Toth, DVM, graduated from Auburn University in 1997 and founded Dallas Highway Animal Hospital in 2001. “Just 45 minutes away from the busiest airport in the world, 30 minutes from the many attractions Atlanta has to offer, one hour from the foothills of the Appalachian Trail, and four hours from the beach, Cobb County is an ideal place to live and raise a family,” he said. Dallas Highway Animal Hospital is an IVPA member hospital.
After graduation, Dr. Toth was presented with a business opportunity. “My employer then owned some property in a rural area of Cobb County that was beginning to experience rapid growth. He and I formed a partnership that allowed me to start the practice with sweat equity and to buy the property over the course of 10 years.”
As small-business owners, independent veterinarians must operate their practices efficiently or face the consequences, said Dr. Toth. “Very few veterinarians have backgrounds in business administration. Many corporations have full-time managers who look at the practice from a business aspect. Independent practices rarely have such a resource at their disposal.” But they can find those resources elsewhere.
For example, Dr. Toth believes his decision to join VSG (Veterinary Study Groups) was one of the best professional decisions he has ever made. In biannual meetings, small groups of veterinary owners from across the nation discuss such topics as leadership, accounting, hospital culture, and other topics. “I have learned much from my group that I now call friends.”
IVPA has proven to be a valuable resource as well. “Veterinary medicine is changing and evolving faster than I’ve ever seen in my 25-year career,” he said. “Unfortunately, many independent practices exist in a ‘bubble,’ with little interaction with other veterinarians. IVPA offers a community for like-minded individuals to discuss the profession’s concerns and solutions. In addition, the IVPA is constantly working to ‘level the playing field.’ For example, we recently created a new teleradiology service available to IVPA members only. The costs of this service are competitive with other radiology services, but the quality of the reports and the turnaround time are exceptional.
“My practice was built on my beliefs of ideal veterinary medicine,” said Dr. Toth. “I do not wish to relinquish control over my business until I am ready to retire. When I do retire, I hope to sell the practice to another individual who will continue to lead with the client’s best interest in mind.
“Dallas Highway Animal Hospital is my legacy.”
Photo credit: istockphoto.com/simplehappyart