FTC acts against private equity firm’s acquisition of veterinary clinics
ftc.gov
ftc.gov
One of the people I know in PE described their profit margins as being surprisingly high even before PE roll-ups. They said that some PE firms were on a mission to acquire all of the vet firms in metro areas and then drive prices up even further because the demand is so inelastic. There was a secondary rush where people were trying to acquire vet clinics in anticipation of flipping them to PE roll-ups later.
My local vet seems to have gone down this slide. A long time ago it felt like a staff that really just cared about animals and had good prices. On my last visit it felt like I was bombarded with practiced pitches for different products and services at every step of the process. They even added some expensive vitamin product to my bill despite me declining it during the service. They removed it when I caught it on the bill before walking out the door, but only after a last attempt at pitching me on it. I could tell they were heavily incentivized to sell as much as possible. I didn't go back, but at this point I don't know where else to go.
Part of the issue at hand is that doctors and physicians are notoriously bad businesspeople. So once they build up a big enough practice, a lot of them will jump on the chance to sell the side of the business that they hate to a management firm.
Like many physicians these days, they see benefits of just being a W2 employee. It’s also a demographic wave, there’s a lot of near retirement folks that are winding down and these PE firms are providing liquidity for their practice. For the consumer though, it’s probably not a good thing at all
"Financialization" means the insistence on seeing "business" as a machine which is to be optimized to maximize return on money. It's in contrast to people doing good work for a fair price.
Compare these two veterinary practices.
One has an owner who is a vet, who got into the practice because they love animals. They hire staff who love animals. They charge enough money to live reasonably comfortable lives and pay off their vet school bills. They could charge more but they don't. They don't try to push unnecessary services to raise more money.
The second is owned by private equity, who got into the field because it has inelastic demand. Prices are carefully calibrated to extract the maximum amount of cash possible. They hire staff who focus on getting the most bang for the buck: they focus and push for expensive operations and do them in the shortest amount of time; operations which aren't cost-effective are passed over or simply not done. At every step of the road, "upselling" is a thing, to maximize money taken from pockets.
The first is what I consider the best kind of "business": Doing good fork for a fair price. Those kinds of businesses make the world a better place to live in.
The second is what I would call "financialization", and I consider the worst kind of business: Extracting as much money as possible for the least effort. Those kinds of businesses make the world a terrible place to live in.
The first kind of business is the kind of capitalism I want, not the second.
It makes sense for some businesses to actually be an "asset" - eg Coca Cola company. It is a reasonable argument that it doesn't make sense for a vet practice to be an "asset". Nor a law firm.
The problem is there's no rule you can apply that distinguished between those two, in a court of law or elsewhere. Unless you just look at if a bigger firm owns the vet office. But that doesn't help with the upselling vet or the large national organization who wants to help animals.
And say the owner-Vet who is doing it from a place of love takes a lone and needs to make some interest payments....what then!
Indebtedness and greed are hard to distinguish when black boxes. Always remember that.
Meanwhile, the PA next to him has what it takes from years of training but she will never open a vet clinic of his/her own.
Thats not capitalism.
Tech example, BigCo A gets first mover advantage, equally good BiggishCo B is a bit behind (for whatever reason), BigCo A leverages their position to prevent B from being able to compete long term - usually by acquisition, they work for us now.
Just because a lot of regulations are bad (or enforced poorly) and some licenses are onerous does not mean "regulation === bad" or "licensure === bad."
But when bad regulations cause bad outcomes, it's pretty weird to focus the blame on the people warning that bad regulations can cause bad outcomes instead of how the regulations are flawed and whether they can be fixed.
See taxi medallions. Another example for a long time would have been FAA approval of new aircraft type certificates and the requirements creating a huge barrier for entry to get them that artificially prevented competition.
I haven't checked, but I assume that today there are more rules and regulations on doctors in the US than there were on the entire Soviet economy. Some of those rules are good, but most of them are in place because a hospital system or a medical association lobbied to put them in place so that they could keep barriers to entry high.
It’s actually very surprising we trust doctors so much (have inelastic demand for them) because for most of history doctors were more likely to kill you than not.
We didn’t get dirt cheap electronic because some engineer squeeze costs down and competed on price.
I searched recently for a nearby vet in Chicago and probably out of 15, only 1 was not owned by a larger chain or company. Big bummer. It's hard to trust that a vet that's part of a chain isn't going to have perverse incentives when it comes to caring for my pets.
Also, another thing that I imagine is driving up vet prices is the unregulated pet insurance industry.
i was so furious i nearly punched a vet there who was hard-selling me on very expensive cancer treatments for my (then dying) cat a few years ago when he hadn't even confirmed it was cancer (there was much more to the story, but i'll leave it at that). that was my one and only visit. never again.
i've since found a great vet working at a non-profit rescue organization. she's no-nonsense, genuine, caring, but importantly, unconstrained by financial metrics. when the sibling cat was dying, she recommended palliative care (and generic medicine from a formulary) over low-odds treatment, because the best case was a few more months at the cost of significant agony for my cat.
Rescue organizations are often the best resource for finding a reputable vet.
One of my neighbors went to a big chain vet clinic to have her cat spayed. They charged her almost $120.
Meanwhile, the city will spay any cat you bring to the pound for free.
They both despise the company. Before selling they were not beholden to any boss or investors, and worked hard to do the best for their clients and their pets. Now they're forced to use systems they have no control over. People can schedule appointments online through a system they don't manage, which means they could end up needing to euthanize an animal that they've known for 15 years at 9 in the morning, and then 5 minutes later have to pretend they're completely ok and happy to accommodate a new client with their new puppy. Step dad says it makes him feel like a psychopath.
They also take issue with the fact that there's no screening of the appointments that are scheduled. To test it, he scheduled an appointment to a nearby hospital on the same network with the description (and I apologize for the morbidity, keep in mind this didn't really happen and he just was making a point), "Garage door was accidentally shut on my dog's head and severed it. Can you please reattach it." It was approved and apparently nobody noticed it until an hour before the appointment was supposed to happen.
On top of that, now he's started dealing with corporate politics that he's never encountered before, and he says he's worried there will come a day that he just loses all motivation to go to work.
Probably because more and more people are buying pet insurance -- our insurance paid nearly $20,000 to Sage for my dog's cancer treatments. I doubt I could afford emergency vet treatments without insurance.
I've always had vets peddle weird stuff but that was a real eye opener.
Then again I’m seeing places like Aspen Dental popping up all over the place so who knows
A free market (scary!) would lower the barrier to entry for proper vets to compete.
But because of rent, labor, and regulatory overhead, you are left to deal with an entrenched and disinterested incumbent.
A free market can also create an environment where pets are hurt and owners are defrauded. Regulations reduce waste, improve quality, and create more efficient markets.
Very curious that despite all of the licensing and regulatory schemes out there, these things still happen? What's the backlog like currently for such cases?
The courts are not an efficient solution, and it's too late for your pet. I don't want to sue people, I want my pet taken care of.
> Very curious that despite all of the licensing and regulatory schemes out there, these things still happen?
I don't understand: You're saying that regulations don't perfectly prevent all bad behavior?
Strict regulations don't guarantee this. Additionally, they can be counterproductive by blocking competition, resulting in only a few compliant vets in your area who might still harm your pet.
>I don't want to sue... courts are not efficient If a monopolistic vet knows they won't lose their license or face charges/fines because a court can't take do so, why would they be incentivized to be extra careful with your pet?
This is why medical care (human or pet) and capitalism don't mix well. If you are having a heart attack, you aren't comparing prices, and if your animal "child" is throwing up, you aren't calling around various vets.
Comparing human and (non-human, but I'll omit that) animal healthcare is flawed. Humans are paying for healthcare themselves and place an infinite financial value on their own lives. Animals don't pay for their own healthcare, so it doesn't matter how much they value their own lives, what matters is how much the owner values its life, which is in many cases not at all infinite.
e: Sorry, sometimes forget what kind of science denialism is cool now. Climate denial out, economics denial in.
Increasing profits does not make start up costs worse.
There's also a secondary problem whereby the existing chains can incentivize new vet grads to simply join up. Why go through all of the risk and trouble of starting your own clinic when the local chain is offering a huge sign-on bonus and reasonable annual salary?
Artificial price caps set by legislation or "benevolent" collusion of owners will only lead to fewer pets being treated overall.
This is just basic microeconomics.
no, i don't think anyone's wondering that. private equity firms have one purpose and one purpose only.
(I joke, your point is well taken)
I would be 0% surprised if similar things haven't been done or tried in optometry, dentists, etc.
Similar to a guy I knew who sold his restaurant four times, each time buying it back for a song from the new owner who couldn't make it work out.
Perhaps "brought to you by HOLDING_COMPANY_X" should be required.
Vangauard
Etc.
There have been COUNTLESS videos about the above and how much they own.
These are the monopolies we should be going after.
Its incredibly naive to think that they arent actively affecting prices.
"What are you talking about, these guys are JOB CREATORS! they only invest in index holds!"
Yeah... good luck deciphering whats really happening when you think such.
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I don't give a shit what you think about John Oliver, but his "Corp Consolidation" piece shows you just how these units operate:
https://www.youtube.com/watch?v=00wQYmvfhn4
By funding of the smaller guys to be bought out by their bigger players... they then control the play of that industry...
Then they ensure that they all buy in-network shit... so all profits stay in the family. Incestuventure Capitalism. (And no its not about "economies at scale on pricing"
"Economies at SCALING of Price Fixing" <-- Truth.
Food. Oil. Housing. Transport. Healthcare. Education. Policing/Politics ("Safety").
OWNING THE MASLOWS HIERARCHY OF NEEDS. That's their business model.
You're understanding of a monopoly is outdated. Plus, you're likely to knee-jerk with a "Thats not the defenition of a monopoly!"
Cool get all semantic on the third grade defenition of an insanely nuanced issue.
Monopoly in the dictionary sense is the same as a fucking sound-bite from the news on a highly complex nuanced global issue that takes one to have decades, and in some cases centuries, of input factors to understand the nuance.
You'll note that "the Fed" was not in your original list. Also, definition is spelled definition.
" What Is Fiat Money?
Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it."
The Federal Reserve derives its authority from the Congress, which created the System in 1913 with the enactment of the Federal Reserve Act. This central banking "system" has three important features: (1) a central governing board—the Federal Reserve Board of Governors; (2) a decentralized operating structure of 12 Federal Reserve Banks; and (3) a blend of public and private characteristics.
>>https://www.federalreserve.gov/faqs/about_14986.htm
>>Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.*
(Tell me you can read this in plain english and not see the amount of Spell-Binding) <-- Do you have any idea the power of the written language?
And the Government that issues it is backed only on the faith in the government, of the constituents that make up said government.
And the fact that the government is largely seen to be an oligarchy.
So the US dollar is a fiat currency, backed by the US government, which is backed by the people that live under said government...
And the people who back the government are?
THOSE IN GOVERNMENT.
Everyone else is.... starts with a P.
plebians!
Im sorry, where do I UNVOTE for 'sanctioned quasi-governmental EVERYTHING' and still live it what is called a 'democracy' OR -- IMAGINE THIS even a "representative republic*!"?
--
I forgot to mention, only a fucking moron replies on a tpyo!
You fail your username:
I hate to be the YIMBY broken record, but we don't have anything like a purely market-driven approach to housing. An important aspect of a functioning market is that supply is allowed to increase in order to meet demand. This isn't the case in the United States because of zoning laws. The housing market is more like the market for rare coins or something than it is any kind of actual market.
Gee, quite the conundrum.
Full Stop.
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If you want to buy stock in a thing, a hedge fund should NEVER be able to have a complete controlling share.
Why? Because history shows us exactly what happens.
Funds, foundations, "private equity" are all money laundering corruption schemes at the cost of others.
THe problem is that this modality has replaced the definition of capitalism.
There are hedge funds that own over 100,000 houses, hedge funds that buy up every trailer home park they can, hedge funds that, in concert with the realty market, are the reason for high real estate prices.
Its a cancer.
Insulin Martin. is a great example of the mindset of these folks.
The French Money Laundry
FML for shot.
The entire "Too Big To Fail" period should have made this clear. We are clearly in a government regime that would prefer to control the markets through the discount window than let them be truly driven by their own forces.
Yep, we’ve had about 50 years now of a Supreme Court shifting further and further to the right, slowly eroding every government check on corporate malfeasance and rent extraction, including antitrust law. The result has been a slow-motion train wreck, and it’s not clear that anything can be done about it for at least a generation.
I don't think this is a universal truth. Clearly there are situations where consumers prefer national brands or dealing with larger companies. If we don't like it, we can pass laws to impose our morality on the public, but the FTC has their mandate and they are sticking with it until told otherwise.
Another commenter mentioned that "most physicians are just bad at business" as a factor driving these acquisitions, there may be some truth to this, but the stereotype of the gullible, bumbling physician businessperson is bullshit. All of the practices being acquired were created and run successfully by physicians and many physicians are quite good at it. What is a huge problem is the predatory behaviors of senior partners looking for an exit strategy via equity buyout. I was searching for a job recently and it is almost impossible to find a position that is "partnership track" - something that used to be the norm. Even worse, practices will bring on junior partners with the promise of equity in the practice, force them to sign a non-compete as a term of their employment and then churn them after 2-3 years or worse - sell the practice to an equity firm.
There are a lot of things that need to change to create a healthy, diverse healthcare ecosystem, but an easy change that would be to ban physician non-competes. They do nothing but entrench equity firms and regional conglomerates making it impossible for competition to arise. Getting rid of the "certificate of need" regulations and generally decreasing the regulatory burden and thus cost to enter the market for a new competitor would also be a big step. The whole thing is gross. Most physicians want autonomy but don't know where to start. I wish there was a startup that could streamline the process - automate or outsource the front and back end work and sell or lease "starter practices" or something.
My dad was a vet. I'm older (52), but in the era and honestly well into my adulthood, vet clinics were generally sole proprietorships or sometimes professional partnerships. The name on the door was the ownership, not beancounters in an office tower somewhere.
So, took, are the vets I trust our pets with. But I have absolutely noticed this trend of corporate ownership and consolidation, and that has never resulted in better anything for customers or patients.
In this case, non-payment is a huge issue for vets and they need to keep their doors open for everyone else that needs care. Running a specialty like emergency medicine is even more expensive and carries higher prices as a result. They don't want to deal with trying to collect after the fact. Hence, they'll usually give two options: Pay at the time of service or sign up for something like CareCredit that will pay the vet upfront and deal with the collections on the backend. Some places offer third options, but these are usually problematic or involve charities.
Sorry to vent. Still makes me so angry and depressed. None of the vets wanted to entertain the fact that it was the drug, despite mountains of evidence. It doesn't feel like there's a culture of learning, just one of deflecting fault. I hate to be one of those "I've done my own research" types, but with animal care you really are on your own. This happened a few months ago, really miss that dog.
If your dog is bleeding out or not breathing, nobody is going to sit there waiting for you to swipe your card; they're going to try to at least stabilize your dog, and then talk to you about diagnostic options and so on. Emergency vets charge an up-front diagnostic fee and anything that is not "your pet will die if we don't act right now" has to be pre-paid.
There are no government funded veterinary clinics.
There is no legal right to emergency medical care for pets.
There is no government agency guaranteeing the vet ER gets paid if the owner isn't able to, or simply refuses. Debt collectors typically pay out a fraction of any debt they agree to collect...assuming the ER can even identify them. ER vets can't put liens on your property like hospitals can.
Most pets are not insured, and frankly pet insurance is a ripoff. Lots of exclusions and a lightning-fast "prior condition" reaction is how they avoid payouts. It's not regulated because in America, we don't Do That Sort Of Thing (no step on business snek, as business snek regulated by free market!)
Emergency medical care for humans is the most expensive kind of medical care there is. For one species, one usually able to communicate at least on some level.
Now imagine all that, multiplied by multiple species. Equipment, a pharmacy, and staff able to care for patients of almost any size, multiple species, of wildly variable temperament, who have nearly no ability to communicate or participate in their care. And who have an evolutionary drive to hide injury and pain, usually.
Part of the reason ER vet care is so expensive is because they do not "demand you pay" while your pet bleeds out or sits there on the table not breathing...and when people inevitably don't pay (in part because they're people like you who shout "well my dog died anyway, why should I pay you!?"). That has to get amortized over all the people who do pay.
The vast majority of pets that end up in the ER are dogs, and the vast majority of those are in the ER from getting hit by cars, into fights with other dogs, or poisoned/obstructed by things they ate - most of the time because they were not on a leash.
What do you expect ER vets to do? Who pays to keep the lights on? The massive pharmacy stocked? The staff trained? The imaging equipment working?
The magical pretend emergency animal care fairy?
just wait till you see what they do with human healthcare in this country
What an insulting, belittling comment. I don't know why you think veterinarians are charities, and don't know why feel entitled to pay people less than they're worth.
Veterinarians hold doctorates. Four years of undergrad, four years of vet school. Many emergency vets are board certified, meaning they've done an additional 3+ years in internships and residencies.
In running a practice, ideally you also want a 3-1 ratio of techs to doctors to monitor patients. Many states require at least an AA degree to become licensed. These days, it's common to find people who have undergrad degrees who go into vet nursing as a career. Therefore, clinics are paying for 3 others with degrees.
Add in costs like support staff, and the fact that 80% of medicine and equipment are repurposed from human use. Distributors don't give a shit that it's for animals and will charge a vet clinic the same as a human hospital.
Don't blame the vet for charging $5000 for a surgery. Blame owners who can't afford to raise a pet but have one anyway.
What an utterly callous statement. We're mostly well paid professionals here on HN, but to suggest that the average american should be able to come up with $500, much less 5k, on a moments notice is laughably out of touch with most people's financial situation.
I think people are missing that the point here is that the prices aren't being set in a competitive market, so $5000 may just be a monopoly price. Maybe pet owners should be forced to pay the cost of treatment, but whether that's $5000 or not is what the FTC is concerned with.
Pet owners should know this before getting a pet, or properly plan.
I think the following quote applies here:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Then it's "why do I have to pay for that!?"
This has been a long time coming. As another comment said, with a few anecdotal exceptions I can think of, many vets simply aren't good business people. Margins have been incredibly small since veterinary care became a thing. Vet schools have required business literacy classes for a few decades, but this is an industry where people get into it to help animals first, not get rich.
Corporatization came in to fill a void, but whether it's good or bad, the economics for veterinary care, and especially consumer perceptions, are due for a reset.
But of course if you choose Banfield (PE shitshow), they’ll see them same day (drop off in the morning, pet waits in kennel surrounded by other sick dogs all day until a vet is free, pet goes back to kennel to wait until end of day). The charge is significant, but the pets waiting around locked up all day is what bothers me more. At checkout they’ll of course hit you with the “wasn’t this so expensive? You should buy our health insurance plan!”
Compare this to the vet in my parents town that will also see same day, but I walk into the exam room with the pet, meet face to face with the vet, and stay with the pet for the majority of the operation. And pay less in the end.
Are we saying that vets would rather be unemployed than to work such a market or is something preventing them from serving that market or does the actual demand for such services not exist?
I do not know why such places don’t offer standard services. The one by my house was nearly always empty, but still would not give my dog vaccines.
It's interesting that most people who like to defend the free market act as if consumers actually have choices most of the time.
That's just simply not the case nearly all the time.. or it's a complete illusion of choice.
Especially in any rural/smaller suburban area (of which the US predominantly is). It's not as if you have 1000 choices for everything around. That's only in large urban areas. The US is so spread out that it can't cram tons of competition in most of it's areas. And that is probably what is being exploited here.
In really rural areas, you find vets who will "work off the clock" for cash payments if they know you well, to cut out the company.
If vets are able to charge high prices and people will still pay them, maybe more vets will enter the market to provide services to the underserved market.
For consumers to make informed choices, they need to have some understanding of the domain.
If a Vet says Rover needs a XYZ procedure, how would the pet owner understand what a fair price is or what other treatment options are?
That wasn't unique to our area either. We've heard from several friends that they've had similar issues getting into vets.
What will be interesting is when they go buying up all the farm vets -- and then hiking THOSE prices up, which will put further costs on farms and animals, food and crops... and then that translates into an ADDITIONAL increase in costs of food/collapse of independent farmers and further control of the price-supply-line of all foods...
They alread did this in conjunct with pharma and agri-fertilizer bullshit...
I wouldnt be surprised if Monsanto is behind this...
Do these funds mandate the vendors from whom the vets can buy medicines and supplies from, likely the other companies they own.
This is "Serious Business" -- and these people are EVIL.
They dont give a fuck about anything, but have paid a bunch of quants to maths death into profits.
Like other forms of healthcare, people want to take care of their pets properly and that makes demand relatively inelastic. If one clinic isn't taking appointments, they'll go to another even if the prices are 20% or more higher, especially if that one is more convenient to access. Once they're there, they'll usually stay for a long time.
As an example, prior to certain surgeries, my wife offers drug A to the clients. It adds to the cost but increase the chance of survival. However, drug B is not an option because studies have shown in increases survivorship by 50%. She bakes it into the cost of the surgery and refuses to do the surgery without it. Clinic down the street offers both drugs as options, bringing the base cost of the surgery down.
So now she has a reputation of being expensive vet. If she offers drug b as an option, patients die more frequently and she has a reputation as a bad vet.
She'd much rather have the reputation as an expensive vet.
This is an emotionally charged industry where 99.9% of the customers have no clue what goes on business-wise behind the scenes. Yelp has been a curse, giving voice to these people.
Graduates who want to make money will go to commercial or fisheries operations, which pay better overall. We're in the bay area, one of the highest-demand regions in the highest-demand state. There aren't many people left to compete over. Corps are currently offering 5-6 figure sign-ons and bonuses in our area. Even if the salary can be matched and they accept, there's still the tech shortage snapetom mentioned. Those people are often commuting from places like Tracy to have reasonable housing costs and many have simply left the industry entirely. You can raise salaries, but there's still only a limited number of people with RVT licenses.
So why isn't supply increasing to meet demand?
They simply are not offering enough money. If 5 to 6 figure bonuses do not work, then they should be increasing pay to high 6 figures or 7 figures. I would be surprised if 7 figures does not solve their supply issue.
Of course, the "ideal" rarely happens, the point is, with every vet you add, issues of juggling staff, scheduling, and turnover skyrocket
To be fair to the companies, they do usually work to "maximize vet time" where they hire or outsource the other stuff the office does so the vet is spending most of their time vetting instead of paperwork and office work.
Some of that is changing depending on the corporation. Sometimes you'll see "Main Street Vet Hospital, a Megacorp Vet Clinic" or they'll rebrand speciality clinics and large hospitals with the corporation branding. However, a lot of small general practice clinics still make no mention of corporate ownership and clients would never know unless they ask. And they never ask.
I'm not going to argue whether it's bad. I've met plenty of good independent vets, plenty of bad ones. Plenty of good corporate vets, plenty of bad ones.
If the red flag never gets waved, nobody even bothers/knows to look, and with the way the justice system works, there is no crime until a DA has sufficient info to start building a case there is one.
Do this for both State, and Federal at a minimum. Local if such authorites exist and are not preempted.
Google is one such example on this board that is often accused of being a monopoly but in real terms is not.
There's also a sort of an unsaid quid pro quo here. News media highlights things that it thinks are important and if the FTC chairs decide to act on those, news media praises them which, in the end, helps them get the recognition that they need for their future aspirations.
> You can miss the bigger picture,” Khan said in an interview with the Financial Times. “Every individual transaction might not raise problems, but in the aggregate you’ve got a huge private equity firm controlling, say, veterinary clinics. So that’s a concern.”
https://www.ft.com/content/ef9e4ce8-ab9a-45b3-ad91-7877f0e1c...
Where I live we are already limited in our vet options and this will make it worse as they continue to gobble up small clinics.
Leading into this is the obvious observation that a company forced to divest some of it's assets to comply with an order like this is incentivized to shed it's lowest-performing assets, and is also incentivized to sell them to an incompetent operator. This makes it likely that the divested assets won't end up being an effective competator.
Consider with the T-mobile/Sprint merger. One of the brands spun off as part of that deal has already ceased operations, and the other has negligible market share.
The oversight regulations are also odd. They are a tacit admonition that the resulting company has too much market power. If they have too much market power today, why would these restrictions sunset in 10 years? Sure, they may not have unreasonable market power that far in the future, but shouldn't the company have to petition to be let off of this oversight, e.g. to prove that they no longer are a dominant player with excessive market power?
It seems like the correct answer for the FTC when they address mergers like this it to just say no.
There are specifically 6 clinics that JAB has to sell to a third-party after the acquisition - all of them are either emergency or specialists of which the market is uniquely bare of options.
The FTC has no problem with clinics rolling up into a chain.
There's no difference between the guy who's all like "Why should I let my property values drop?" and the firm who bought the home next to him with the same mindset. The outcome is the same.
https://www.theglobeandmail.com/business/article-private-equ...
They may think they are good, but when the chips are down, they are invariably bad. Just bad, why would I put it any other way? What word do you want me to use instead, how do you want me to water it down?
But when the chips are up they're great! They have all this money, *donate* to *causes*, like the museums of New York and Philips [Exeter/Andover], their alma mater, and a list of non-profits the public never hears about because they're too elite, it's not that they don't give. They give. And sometimes they do pull off business miracles, they're super sharp guys, very hard-nosed buttoned down, great students, if an industry requires getting shaken up they'll really shake it up.
They're a rebranding of leveraged buy-outs from the 80's, they gut companies.
Which companies sometimes need. Like appendicitis or colectomy (removal of colon, should be called colonectomy but doctors are avid boggle players), like in cases of cancer.
But, private equity eats what it cuts, so there's a...there's a conflict of interest, I guess you could say. You could say "conflict of interest" instead of "bad".
I accidentally stepped on my dogs paw about a year ago and getting an appointment less than a month out took DAYS of calling around. Ended up going to a vet 40 miles away.
The only thing she can think of is with more WFH, more people are noticing things wrong with their pets.
I’m familiar with a few clinics that have been hiring DVMs at $120k in low CoL areas for 6+ months without success. It’s hard to raise prices enough to pay more than that in those areas.
The voracious and insatiable appetite for profit has led to some really disgusting practices for example:
- Goldman Sachs driving up food prices, which quite literally kills people, for profit [1]
- Hedge funds buying up trailer parks and jacking up the rates [2]
- Medical price gouging (eg epipens, insulin) [3];
- Abbott shutting down a baby formula plant that was poisoning infants to essentially end-run a possible investigation [4] where ultimately the government begged (paid?) them to reopen it; and
- Russia's invasion of Ukraine is a massive boon to the US military-industrial complex, a sector that might otherwise have found hard times thanks to the wars in Iraq and Afghanistan ending.
If you look at these you see regulatory failure at pretty much every level thanks to the revolving door and resulting regulatory capture by these industries.
Compare this to China, who executed two people found responsible for a tainted milk scandal [5].
It's hard not to see just how much rent-seeking and monopoly-creating goes on in the modern economy. When is it enough?
[1]: https://foreignpolicy.com/2011/04/27/how-goldman-sachs-creat...
[2]: https://www.newyorker.com/magazine/2021/03/15/what-happens-w...
[3]: https://www.npr.org/sections/health-shots/2019/12/31/7926175...
[4]: https://www.reuters.com/business/healthcare-pharmaceuticals/...
[5]: https://www.theguardian.com/world/2009/nov/24/china-executes...
The problem with this language is it implies inevitability and a near-term conclusion. Neither is a given.
You've correctly identified regulatory failure (specifically, our inattention to competition) at the root of these problems. Fighting that takes effort. When I hear the terms late-stage or end-stage capitalism, I hear nouveau nihilism. The situation is far from unfixable. And the present state can persist and fester for generations more.
An analogy might be found in a deteriorating factory. Management complains the factory is in its final stages. The foreman, meanwhile, sits bewildered next to a list of neglected maintenance. This wasn’t inevitable. It still isn’t inevitable. We’re just choosing not to fix it.
Hedge Funds don't invest in trailer parks, if they did they wouldn't be hedge funds they would be PE firms or REIT's.
While the US Industrial Complex is a cancer to the system I don't think they're to blame for Russia invading Ukraine. Instead, the US government needs to stop non-bid contracts and paying these companies "cost + Percentage" contracts.
Also the FP article misses out on a lot of nuances in the futures markets but thats a bit too much of a pain in the ass to get into.
Drugs, where we definitely want regulation, have that kind of issue, there are huge regulatory hurdles to jump through that require scale.
With yields so low, and the stock market still above 2019 highs, PE firms are diving into the few areas of the economy where there is value due to lack of competition and it is also not completely overheated.
However, take out the permit and licensing requirements and you would plummet PE money pouring in right away.
Remove permitting, licensing, and educational requirements from people selling surgical procedures for animals?
No thanks. I don't actually see occupational licensing as a bottleneck for a job that requires significant education and training to do properly anyway
We don't have a backlog of veterinarians out there who completed all of their years of training but then got stuck getting licensing.
We also don't really want amateurs vets opening up clinics and just winging it with people's pets.
In a couple decades, people will be saying this about to fresh veterinary school graduates who want to open their own hospital instead of joining one of the conglomerate private equity firms.
We don't have a backlog of trained unlicensed veterinarians because it's the training that's the bottleneck. You could be the most ambitious person in the world but if you don't get into vet school then that door is closed. You can't get a license if you don't go to an accredited institution.
I wouldn't get rid of the license requirement, but I would definitely change it to something that is not rate-limited by the number of available vet school seats per year. Imagine if drivers licenses were handed out the same way, if each DMV only offered the mandatory prerequisite training to 500 people per year and nobody else was allowed to drive. Driving would become an elite institution too, and we'd be complaining that it's better that way because nobody trusts amateur drivers operating these several-thousand lb machines.
[1] https://www.bls.gov/ooh/healthcare/veterinarians.htm#tab-6
But why should all consumers be forced to overpay for licensed veterinarians?
Now, make the kind of regulatory changes that would allow small healthcare businesses to compete successfully and create a freer market and you might get traction.
And you will have a trail of dead pets resembling a slaughterhouse along the way.