The CartelPosted by in Uncategorized
Cartel (noun): An association of independent businesses organized to control prices and production, eliminate competition, and reduce the cost of doing business (1). Also called a trust (2).
(1) Dictionary of Military and Associated Terms. US Department of Defense 2005. (2) Collins English Dictionary, 2003.
When we think of cartels, we tend to think of OPEC, the organization of oil producing countries that sets the price of oil. Or we think of Mexican drug cartels, which control the supply of imported drugs to the US. Or we think of Teddy Roosevelt’s Trust busting of robber barons controlling the market access to beef, sugar and the railroads.
But there is a good chance you have been subject to a cartel system personally once or twice this year. You’ve willingly paid the market rates which are not set by competition but by cartel control.
That cartel is the one owned and operated by your neighborhood veterinarian.
Did you know that there are states in which a veterinary hospital may not be owned by anyone but a veterinarian? That if a vet dies, his or her surviving spouse is forced to sell the practice to another licensed vet at fire sale rates because he or she is prohibited by law from owning a practice? Did you know that Alabama recently tried to make it illegal for an animal shelter to employ veterinarian by trying to pass a regulatory requirement that no veterinarian could have her work schedule set by anyone but another vet? Do you know who generally makes and enforces these clearly anti-competitive rules? That’s right, the veterinarians themselves.
Across the nation, Boards of Veterinary Medicine set rules and advocate for regulations and laws, either directly or through their State and National Veterinary Medical Associations, that have nothing to do with the quality of veterinary medicine being delivered. They have to do with keeping control of the veterinary market. Yes, there is great insistence that it’s about quality of care, but these protests ring hollow. After all, who is the corporate owner of a practice or whether it is filed as a Limited Liability Corporation or a Professional Corporation or a 501c3 Charitable Corporation wouldn’t seem to have any bearing on what sort of treatment Fluffy gets in an emergency. No matter who pays the electric bill at a practice, it is still a licensed veterinarian who is practicing medicine.
Medical doctors are regulated under state law to ensure delivery of quality medical care. Yet no one claims that a medical practice or hospital must be wholly owned by a doctor. If you live in Berks I’ll bet you money that there is a better than even chance your doctor works for either St. Joseph’s Hospital or Reading Hospital, both charities. Do you think you got bad care because of the corporate entity which paid the electric bill or bought the medical supplies used at the practice? Or paid the doctor or set her work schedule?
There are regulatory controls for hair stylists, auto repair shops, and television stations. Do these businesses have to be owned by stylist, mechanics, or news anchors? Of course not.
For decades veterinarians have been moaning about non-profits having an unfair competitive market advantage. They have tried to put up barriers to animal shelters even providing sterilization services and vaccination clinics, let alone full public veterinary services. Never mind that these generally service a clientele that would not otherwise seek service at a “real” vet practice. But what is the unfair competitive advantage a non-profit animal hospital has? At most, it’s that there is no property tax burden. In Reading, that “burden” for HSBC would be about $5,000. Do vets really think charitable organizations are not providing more than $5,000 in reduced care to balance that out? What if non-profits offered to pay property taxes on their hospitals? Would they stop complaining then? No, because this is about controlling competition under the guise of “quality of care” concerns, nothing more.
What is comical is that the real death knell for the standard model veterinary practice came decades ago in the form of major corporate veterinary companies such as VCA, a publicly traded company, and Banfield, which operates out of PetSmart stores and is privately owned by the Mars candy corporation. Why don’t vet boards go after these interlopers to their old, doctor owned vet practice model? Maybe the billion dollar revenues and fleets of lawyers all that money can buy. We don’t hear about vets going after the ASPCA or San Francisco SPCA, which have major public veterinary hospitals. They only have about a hundred million dollars, but that’s still enough to hire plenty of lawyers.
Instead, they go after animal shelters in Alabama who are just trying to stop the never ending death in shelters because of a lack of access to sterilization and vaccination services. Or they try to get shelters with practices audited by the IRS, like recently happened in Idaho. That non-profit hospital passed with flying colors. It turns out the federal government doesn’t seem to have a problem with non-profit hospitals. They certainly pay enough out to humane ones via Medicare and Medicaid. And I’m guessing it is only a matter of time before someone decides to go after the non-profit veterinary which are springing up across Pennsylvania right now. A wild guess is they’ll start with the one with the biggest mouth.
It’s important to point out that all is not lost. Most of the vets sitting on State Veterinary Medical and Veterinary Medical Association Boards likely went to school and earned their degrees not just before there were Shelter Veterinary Medicine tracks at vet schools, but they did so before it was common for animal shelters to even have a vet on staff, let alone operate a non-profit vet hospital. There are waves of vets leaving vet school seeking to work for non-profit hospitals and animal shelters, with no aspiration to work for or buy a private vet practice. There are more and older vets who have chosen to leave the production driven world of the private or for-profit veterinary practice. How do I know? Because we have hired them at Humane Society of Berks County and we get resumes from others like them weekly.
It is time for the veterinary cartel to wake up to reality. Their business model has been slowly dying for years. If it’s not the non-profit practice killing the model they’ve clung to for decades, it will be the bigger interstate corporate practices. And if it’s not that, it’ll just be the economics of the marketplace and the expectations of their clients. As Michael Corleone said, it’s not personal, it’s just business.
I have some sympathy for them. Just like I’d have some sympathy for OPEC when someone invents viable solar cars or the next fuel source which makes petroleum obsolete. But just like that will be good for consumers and the environment, a new market driven veterinary service delivery model will be good for consumers and their animals.
They shouldn’t worry. There will be an animal shelter or mega-corporate practice nearby looking to hire.