Sunday, April 29, 2012

We Are Small Business

I know this topic has been mentioned before, but I feel so strongly about it and I am so worried about it, that I think it deserves yet another post.

The majority of veterinary practices are privately owned entities and are considered "small businesses".  We are some of the remaining few (sadly, few) professions who are still dominated by the small business model.  Yes it is changing - corporations like VCA, Banfield, etc. are moving in and trying to buy us up and take over.  There is talk about forcing the small guys out of circulation and moving towards a model more like human medicine, where there are small satellite clinics where you go to get your wellness done, but you have to go to the bigger central hospital if you need more in-depth care.  The satellite clinics won't have the equipment, staff or abilities to handle things that we do now.

This means you can't get your bloodwork, xrays or other tests done immediately (one of those things people love about vet med)  because it wouldn't be done at a satellite clinic.  It would be more like a human model, which to me means "pain in the ass" model.

In a lot of ways, it makes business sense.  Owning (and yes I am an owner) a veterinary hospital is becoming less and less worth it on many levels.  Our "rewards" for owning are diminishing at a rapid rate - and by "rewards" I don't really mean fancy things;  I mean things like...   taking home a salary and funding my retirement.  When simply earning a living becomes so difficult that it's no longer worth it, well, you'll start to see the disappearance of the small mom-and-pop veterinary clinics, just like you are seeing a loss of those types of businesses in other realms as well. 

So what does this mean for the public and why am I writing this blog?

Let me put this into real, every day terms.

Small animal hospitals help fund their day to day operations through spays, neuters, vaccines, and in some cases, the sale of medications and supplies for pets.  Things like,  Frontline Plus, dewormers, heartworm preventatives, etc.

Selling these things - what some call "the bread and butter" of a practice, helps us keep other costs down so that people can still afford things like dentistry for their pets, or when their dog eats rocks, we can do an abdominal exploratory surgery without bankrupting our client.

But what is happening?  Well, many of our "bread and butter" sales are disappearing.   To non-profits who now do spays and neuters for so cheap (because they get donations and tax breaks that we private businesses DO NOT GET) that we can't compete, so we've lost that business.    To low cost, high volume places that do shoddy work and basically lie to the public about the quality of care their pets receive.  Products like Frontline Plus and others, have either gone over-the-counter (sold by Target, Wal-Mart, PetSmart, etc)  And now, Big Box Pharmacies are going to start selling veterinary drugs, which will take yet another bite out of income for these small clinics who are merely trying to survive to begin with.  I am writing more and more prescriptions for clients who can get their Rimadyl or Clavamox at a regular ol' human pharmacy now, for cheaper than I can sell it to them.  I don't blame them, they need to save money.  But it's a loss of income for my hospital, which translates to making it harder and harder to pay MY bills, pay MY payroll, and simply keep my doors open. 

And it makes those emergency situations when your goofy lab ate a rock and I have to perform an abdominal surgery to remove it - all that much more expensive.  Because I've lost other income that would normally cushion the costs of a surgery like that.

Now, let me say that I get it.  I get that people want and need cheaper alternatives.  I get that vet care can be expensive and I get that sometimes it's all you can do just to pay for vaccines.  People do need alternatives.

Unfortunately, though, what they are doing to themselves is....  shooting themselves in the foot.  Veterinary practices are actually bankrupting at an alarming rate, something that has NEVER happened in this history of this profession.  We simply cannot compete any more with the loss of our "bread and butter" sales that subsidize the rest of the care we provide because, well, now we have to actually charge the actual amount it costs to provide real quality medical care.   Without the "subsidy" of the income from the sales of products and medications and spays, neuters and vaccines....  well, when your pet really gets sick and needs major abdominal surgery, now we have to charge more for that to make up for the lost income.

Or we close our doors.

And that is what is happening.   Slowly but surely, small practices are going out of business.  The beloved model that evokes comments like, "Wow I sure wish you were MY doctor, because the care I get at my vet is SO much better than anything I can get in human medicine" is slowly but surely dying and becoming extinct.

So what am I asking of the public?  Don't bitch and moan so much about the cost of things.  Buy your drugs FROM YOUR VET, even if it costs $20 more.   Price shop if you must, but if it's only a difference of $50, then go to your regular vet instead of the low cost place.  Ask questions.  Tour your vet's hospital.  MAKE AN INFORMED DECISION.

Because the reality is that if you continue to go to low cost facilities for the "bread and butter" things, then when you really need good care, you won't get it...  because you didn't support the real hospital and they went out of business.

But most of all, know that you are supporting A SMALL BUSINESS.  Not just a vet.  Not just a clinic.  But A SMALL BUSINESS.  America was built upon and sustains itself on small business.  When the public insists on buying everything from Big Box stores or online for cheaper, they are hurting a small business, and ultimately, hurting themselves.

I don't expect this post to change anything.  But I want to warn the American public that if they don't start supporting their veterinarians more, then the face of vet medicine is going to change rapidly and I suspect the American public isn't going to be very happy with what they get.

Shop local, stay local and spend your money at your vet even if it costs you a little more.  Otherwise, don't complain down the road when we disappear.  And yes, we are disappearing.

21 comments:

  1. As time goes on, those cheap spays will cost $1000 or more.

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  2. Maybe you could write to a newspaper, like the NYT or something, to get more exposure for your message?

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  3. This is so sad and so true. I'm sharing it with everyone I know, and asking them to share. We can't afford not to.

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  4. I honestly wish I had an answer on how to address these problems. On how to provide quality veterinary care that is still affordable for what I think is a decline in the American way of life. But for small businesses, there is no good answer for that. And the American public seems to be understanding less and less how they are hurting themselves (or is it that they are just getting dumber and dumber?) I don't know. If anybody has a magic answer, please let me know so I don't have to go bankrupt. :)

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  5. What people don't seem to realize is those large corporations are MULTI-NATIONAL and they don't give a flying fuck about the US or its people. Certain politicians consider corporations to be on par with a human, able to donate and influence policy like a human constituent (I cannot even think of ALEC without getting murdery). The corporations that deserve to have a voice in our communities are the ones that are actually as concerned with our community and the people. And I don't mean putting up a sign at a local high school. They are the people that employ workers are know their names and stories. Sure, outsourcing to India would be cheaper with their fake English names (and who can blame them for wanting to better their situation>), but the corporations that deserve any amount of personhood are those companies that actually make our world better.

    And as an aside, when those large corporations ask you to round up to donate money for leukemia or whatever, save your freaking money and donate directly to a cancer fund. Every time you give them donations, they use that money to offset their profit and pay lower taxes. Get the tax break yourself and quite supporting their "habit."

    And as the time of the mom and pop stores passes, the time of getting a diagnosis and treatment the same day will also pass. Support the good vets, the ones that keep up. My mechanic has been the same company for years. I trust him. I trust him because I knew his father. And Nick does continuing education. I remember the day when he excitedly showed me the new line on his card "Master Mechanic." That is why he changes my oil and does my breaks, not Walmart.

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  6. Just so you know, I am a veterinarian whose practice has closed and I am bankrupt. I am an excellent veterinarian and I honestly don't think that my community was ready for my quality of medicine. Right now, I'm reading the writing on the wall and debating if practice is even worth it anymore given the stuff we have to deal with on a daily basis. To say the least, I will most likely never own a practice again after this.

    I am almost to the point where I am mourning my profession because it isn't what it once was...there are unethical people selling each other out left and right for the sake of the almighty dollar and cutting corners. It's just not right. It's not right for the pets and certainly not for the people who want to do the right thing by them. But if people want cheap, let them have it. My clients were devastated when I closed, but there was nothing I could do about it.

    Now I'm trying to figure out what the hell to do with the rest of my life.

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  7. I'm a solo practice owner also. I've been barely able to float along with this economy, with the help of a credit card to pay the bills some months. The only way this is possible is my husband has a job that covers ALL of our personal expenses. So, essentially I work 50-60 hours a week at a hobby that pays me nothing but headache, debt, and occasionally puppy kisses.

    This WOULD be okay. In fact, I'd PLANNED on having "Top Ramen" years until I'd paid off the practice loan and mortgage on the real estate of the practice. The THEORY was, you work your fanny off, tighten your belt 'til your practice is paid off, then make a MODERATE income for the rest of your working years. The investment you made paying off those loans, the EQUITY you built with your years of effort, translated into a retirement fund when it was time to hang up the stethoscope. You'd find yourself a bright-eyed young grad who was full of James Herriot idealism (just liked YOU'D been) and SELL the place. Trouble is, this next generation of graduates will be sinking under the weight of their student loans, and even if they WANTED the...ahem...ROMANCE of barely scraping by for the better part of their careers, they won't be able to AFFORD to. So off they'll go, into corporate Vet Med. They'll be miserable, because most people who have the balls to go into Vet Med are staunch individualists who HATE being told what to do, and pet owners will be unhappy because they'll never get to see the same Vet twice and no one will ever know or care about their pets specifically. It'll be AWESOME. So, yeah. Go ahead. Get that cheap flea control and tax-subsidized spay for your pets.

    As much as I HATE corporate med, if I had an offer today that would just cover what I've invested so far in my practice, I'd sign the damned dotted line and run for it. I'm too small fry for Big Corporate to be even REMOTELY interested in buying me out, but if I had the chance...

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  8. Thank you! I was trying to explain this to my aunt around an hour ago, and she just doesn't understand. Granted, she's never had to work and believes that everyone owes her a living, but some empathy would be nice. She had a huge rant today that the nurse made her pay for the full course of treatment for demodectic mange instead of giving her the little bit more that she needed, like our vet apparently said.
    1 - So many people lie to the nurses and techs. They lie, they beg, they plead and it's exhausting.
    2 - The nurse has been there for 20+ years, even if he had told her to allow it, she's still not going to give things away. Her job depends on the business staying open.
    3 - My aunt and the others like her have nothing to complain about. They're getting very good, affordable treatment from a wonderful guy with 30+ years experience, and it's their own fault entirely that they have had their consult fees put up slightly as an annoyance 'tax'.

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  9. What can you do?
    You can check your local nonprofit spay/neuter places and make sure they are restricting themselves to what they wrote on their nonprofit application (their mission statement).
    You can try to get them to restrict themselves to serving those that have been means tested.
    You can try to stop them from doing nonelective services for those that have the means to go elsewhere.
    You might consider asking the pharmacist where they purchased the drugs they are selling you from. Ask the pharmacist what specialized training they got before they started hocking vet drugs (BTW, most will have no training in veterinary drugs).

    I am a small animal practice owner. I'm a solo doc. It's wearing to live by all the rules of our profession and others infringing on the profession are not held to the same standards.

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  10. Wouldn't it be nice when that big on-line pharmacy advertises that they can sell you pet stuff so much cheaper than a trip to the vet, that gets Betty White to sell her soul for a few bucks, that breaks the rules we have to follow just so they can make more off the pet owning public...wouldn't it be nice if folks knew that they run a 30-40 MILLION dollar profit each year. Those money grubbing veterinarians...Hint...when a veterinarian marks up a product over its cost it is really just a sinister plot to make enough money to STAY IN BUSINESS long enough to HELP YOU AND YOUR PET. Sinister plot my ass!!!

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  11. I really try to support small and local businesses in all aspects of my life. I cut myself off from Walmart (which I went to ALL the time for just about everything) 2 years ago and don't miss it. As a result, I've really had to cut back on my spending because the day-to-day items were costing me so much more and it really made me look at "necessity" vs. "luxury" more clearly than before. I too wish that more people would do the same. We live in a world where everyone believes it is their right to live like royalty. We deserve fancy cars, big houses, the newest fashions, the latest technologies, all materialistic things that people say they "can't live without".

    The cynical side of me just gives up on trying to help others see this and says, "just wait until the bubble bursts and no one can even afford the necessities anymore because they wouldn't let go of the luxuries." I can try to lead by example but most people just won't change.

    That being said, I think veterinarians need to accept that they can no longer expect products to be their "bread and butter". I think the business model needs to change. No, I do not think that it should just change over to the human medicine model, but by looking at that model's shortcomings maybe veterinary medicne can find a better way to do things. If I had any business experience maybe I could provide suggestions but unfortunately I have no advice other than I think the profession has to roll with the punches.

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  12. This is something I struggle with a lot. I want to support my local veterinarian and give my pets the best possible care and I will not purchase drugs online. However, my struggle is with the products - a particular cat supplement she recommends costs $38 for a months supply at her office but I can get 3 months supply for $36 online. If I save that $$ on the products I have more $$ for diagnostic tests, procedures, etc. What to do?

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  13. I very much agree with Kerrie. As a young vet, I sadly admit that all the hemming and hawing from older, experienced vets about the state of the profession has made me and many of the people I graduated vet school with hopeless about the success of our entire careers. Even I have SERIOUSLY debated cutting my losses, going back to school, and starting a new career in a totally different profession to maybe and eventually make a good salary in business or marketing.

    In the end, I have $130,000+ invested in this profession and it's all that I, and many others, have. It's our passion and our lives. Instead of complaining about low cost clinics, online pharmacies, losing "bread and butter", etc., how about we, as a profession, rise up to find a solution. Let's find a better business model, make our practices a model of efficiency, try new things, and most of all NOT scold and chastise those who break out of the traditional mold. It is these people who will change and possibly save the profession.

    I understand everyone's concern and worry, but as a young practitioner, I'm pretty sick of hearing and reading about the complaining. Let's do something to create a solution. The current model is obviously not sustainable.

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  14. Vetchick and Kerrie, believe it or not, I do agree with you. I don't have a great answer myself. Part of the solution is that as certain profit centers are lost (i.e. "bread and butter") then others will be increased. For the public that means the diagnostic testing must become more expensive in order to make up from the loss of the sales of other items. I live in a place where we actually don't make money off things like HW preventatives, flea and tick preventatives, etc. But I have watched my spays, neuters, dentals and routine things like mass removals, etc. move on out. People are doing these things for $50 now just to get people in the door because of the national decline in annual visits.

    I've said all along that if we'd simply make an annual exam the START of the standard of care, then we could do some good.

    I'm not an "older, experienced" vet by a lot of standards. I've been out 9 years. I've seen the profession decline in that amount of time. I've seen the AVMA say one thing and do another. I've seen AAHA hospitals be so shabby that it's a joke. I've had my own bubble bursted about the profession and believe me, I'm not happy about it!

    I think what we all have to remember, is that the hemming and hawing is what got these conversations started. So while it might make you question your decision and worry, at least it makes you aware and gives you reason to think about things. And it gives you the insight to know that things DO HAVE TO CHANGE and that it's probably going to be your generation to really survive it and make it happen.

    I agree the current model is not sustainable. But it is a small business model and it's dying out. It's something that the younger generations may not experience or enjoy.

    But hey, if you have a good answer, by all means put it out there. We need voices like yours and input by all (even the ones in disagreement to solve this puzzle and help our profession.

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  15. I meant to say one more thing... I saw an invoice from a fairly low cost place. They charge something like $20 for an exam, which is what exams cost 25 years ago. Then I saw what they charged for a basic blood test: $220. So yes the profit centers will be shifted. That was a perfect example. Their bloodwork used to cost about $100. This is where the answer will lie, I suspect.

    I do have a friend who is in his 60s, and we were talking about what vets are charging for some things now. I mentioned $30 cat neuters. He literally busted out laughing and said, "My god, that's what we were charging 40 years ago!!"

    See?

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  16. I do have many ideas-- most don't fit in the "box" of what seasoned practitioners believe veterinary medicine SHOULD be.

    I don't believe that people don't want to spend money on their pets. Are you kidding me? People spend gobs of money on their pets! They buy collars, leases, purses, breath mints, rain coats, and even cocktail dresses. The non-veterinary pet industry is growing by leaps and bounds every single year.

    I visited a pet boarding facility (a small business that was successful and got bigger) and got to pick the brain of the owner about how the business works. This company started as one location and now has 14 locations in 5 states. Each location grosses THREE TO FIVE MILLION DOLLARS A YEAR. There are three months a year where they have barely any cash flow and the company still manages to pull in a large sum yearly. They have less than the average transactions for a 2-3 doctor veterinary practice; so how are they making so much money??

    Two reasons: they have made people believe that quality care for their pet is important while they are away no matter what the price, and the business is run backed by strong business practices and people who know business.

    In the last 15 years, dentists experienced a similar decline in their profession (albeit for different reasons). Dentistry was expensive, painful, and deemed unimportant by most Americans. What did the dentistry profession do? They changed their image. All the ads you see now are about beautiful smiles and comfortable care; not on the health benefits of preventative care. They made people believe that seeing the dentist regularly will you more beautiful, popular, and successful. All you have to do is pay your money, and the rest is easy and painless. The dentistry profession got a jump start, many people have far superior dental care than previously, and many dentists are making gobs of cash.

    I don't think veterinarians can play on the vanity of America, but we can use their revolution as inspiration. We have to make people believe and understand that paying for your pet's health care is just as important as a Yorkie-sized patent leather cocktail dress with matching leash. We have to help them align their priorities.

    Furthermore, we have to make our businesses like BUSINESSES. Being a small business doesn't give us an excuse to be inefficient, wasteful, and ignorant. Taking care of a business requires business knowledge. If you don't have it, get it. If you can't get it, hire someone who has it. Utilize consultants and invest in the process. It will pay off! Many of these evil corporations started out as small businesses that did exceptionally well and grew because they were damned good at making money. Making money isn't evil and most definitely doesn't mean the profit-er is practicing poor medicine; the profession needs to stop assuming the two always come hand in hand.

    A good friend of mine consults and analyzes the cost and efficiency of processes in fast food restaurants. (I bet you didn't even know there was such a job, but there is!) Like veterinary medicine, fast food production is a series of processes. Each process has a product, and each product has a price determined by how much the series of processes cost to create it including raw inventory, time, and personnel costs, among others. Sound familiar to veterinary medicine? Embarrassingly, this friend came to a nearby veterinary practice and watched. In about 30 minutes, he could have ripped his hair out. The practice was wrought full of waste (of time, product, and personnel), and, when it came down to it, PROFIT LOSS. It's really not our fault. We, as veterinarians, didn't get any formal business education; however, it is our fault for not seeking the assistance of people who did. We are no longer in the era where we can make money in spite of ourselves, our bad business practices, inefficient processes, and stale ideas.

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  17. One more thing...

    We DO have a profession full of passionate, empathetic, caring people who love animals. That IS worth alot ALOT!, but we have to remember that our passion and medical knowledge alone don't always translate to a successful business.

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  18. ut we have to remember that our passion and medical knowledge alone don't always translate to a successful business. Busienss Directory

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