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Another issue is that doctors are coming out of school with more student loan debt than ever before, so when it comes time for the older doctors to retire, the younger doctors haven't built up enough personal equity to take over the clinics.

Nobody seems to care about the student loan debt of doctors, because doctors can make a good salary, but student loan debt still has negative consequences down the road such as this.

Dentistry is different. I've seen multiple comments from fresh DDS graduates being able to take out 7 digit loans to acquire/start/buy in to a practice, because it's seen as a low risk license to print money.

The edge is far better service and less scammy practices (pushing unneeded treatments/medications etc..), at least from what I heard locally about Dutch vets.

Incidentally in Belgium they just passed a law requiring each veterinary practice be owned by a veterinarian. Life could be simple...

>what is your edge in this case where your competitor is now bigger and can handle things like a vet quitting as they have a bunch that roam from practice to practice. Or they can handle buying a new machine for millions while the bank won't lend to you due to your shrinking margins.

To answer your rhetorical question:

1. People would rather deal with neighbors than with PE or megacorps, and will do so to the extent that the difference in price is tolerable (and to the extent that they even know their neighbors.)

2. Management layers and performance based incentives are huge costs that small enterprises should be mostly able to avoid.

3. Owning a business can have a really compelling advantage at tax time in the ranges of professional incomes we're discussing.

4. Owner-operated businesses should be able to integrate with family life, allowing dads to spend time closer to their kids, which should be another advantage in favor of professionals going it on their own.

5. Owner-operated businesses can also operate with much more efficient facilities (housing over top of business) when not forbidden by zoning or other regulations.

On the other hand, people like steady salaries and set working hours. They like leaving work at work. And, especially as these professions increasingly see their schools dominated by women, many of these professionals really like stepping away from work or going part time for 5-10 years around their 30s.

RE 1: Customers have zero influence on this. If you have a pet, you'll need a vet, and if the owner of the owner-operated clinic next to you gets an offer they can't refuse... I can't imagine you'll find some other owner-operated clinic to visit out of spite, where the now-corporate one next to you is open, and perhaps even cheaper.

RE 2-5: These are all rounding errors compared to economies of scale the PE-backed companies have. Also, those PE roll-ups target businesses whose owners are at the stage of life when they're just happy to take a big payout and retire. Tax time advantages and spending some time with kids (which is arguably less than salaried employees of the corpo-clinic will have) can't possibly beat being able to not work at all anymore, live comfortably, and have all the time you want for kids.

> I can't imagine you'll find some other owner-operated clinic to visit out of spite

No, but I did organise a few patients to grant our vet a loan to open a new facility. (It wound up creating some Michael Scott Paper Company drama between the vet and her former colleagues, which was interesting.)

People like you are our last line of defense on the ground. Sadly, I don't think there's enough of such people to hold the line against PEs doing targeted divide-and-conquer on specific market segments, one by one.

>RE 1: Customers have zero influence on this. If you have a pet, you'll need a vet, and if the owner of the owner-operated clinic next to you gets an offer they can't refuse... I can't imagine you'll find some other owner-operated clinic to visit out of spite, where the now-corporate one next to you is open, and perhaps even cheaper.

I have seldom gone to the nearest vet/pediatrician/hospital. Inevitably I try it, it's bad, and then I spend time driving to some place further away that I actually like. And I drive an average of 4000 miles per year; with the median driver traveling some multiple of that each year, I can only assume that most people are way more willing than I to shop around.

People in general do not give a fuck about anything besides price, and behind that, convenience.

However, people spend a lot of time talking about how they care about more than just price. The actual manifestation is tiny though.

People care about multiple things on different time horizons. There’s nothing contradictory in saying, “I would prefer a world not owned entirely by one PE firm” and “I will generally seek the lowest acceptable prices.”

The contradiction is not between saying two different things about different time horizons, but saying one thing and doing another.

It matters little what you someone says with their words if they say the opposite with their money - if in practice someone is seeking the lowest acceptable prices, then their "revealed preference", to use the technical term, is that they're actually preferring a world where that shop is run by a PE firm, as they're actively helping make that world happen. And sure, their stated preference may well be that a world not owned entirely by one PE firm, but really, who cares about the stated preference that doesn't get reflected in acts in the real world? Those are just empty, misleading lies if the actual choices show the opposite.

It's like saying "I prefer a world where I will lose weight" while buying a 12-pack of donuts for lunch.

That term isn’t “the” technical term. It’s a term from economics to try to explain apparently contradictory behaviors. Gee wiz, what a great explanation! “People just don’t actually prefer the things they say they prefer, even when they have far better reasons to prefer their stated preference over their revealed preference.”

Now here’s the thing, when you actually ask someone actually amidst buying the dozen donuts if they’d prefer to have the donuts or to lose weight, they’ll tell you “to buy the donuts.” If you remind them of their goal to lose weight, they’ll shrug and say “yeah but that starts tomorrow,” or “oh well,” or “I’ll skip dinner later.”

Why? Because it’s not actually the case they are behaving against their preferences. It’s that their preferences are alternating as different rewards approach on different time horizons.

“Revealed vs stated preferences” is the laziest frictionless spherical cow explanation of human behavior ever crafted.

Too late to edit, but I’ll add: the revealed vs stated explanation is plenty useful for some things. A lot of times (especially in business) you don’t really care why someone behaves against their stated interests. But that doesn’t mean it’s actually an accurate description of what’s happening at the individual level.

> People in general do not give a fuck about anything besides price, and behind that, convenience.

They do when it comes to their pets.

First, you should be careful about thinking you know people in general, and even if you could know such an abstract and totalizing thing, you don't need all the customers, just enough customers, or even plenty of customers.

Also, the very fact of charity shows that people must care about something other than price. Paying higher prices to interact with your neighbors is just a much smaller step on the same road of doing things you think are beneficial but that won't maintain your bank account at the highest possible value at that exact instant. Farmer's markets are another example of the same.

You're either looking at the wrong people or making the wrong changes, if you don't think anyone actually cares about anything other than price.

It's people with deeper wallets who do what you're describing, including shopping at farmer's markets. This brings us to the real way a smaller business survives against a giant competitor: they raise their prices and target a niche market by offering more obscure/luxury products or services.

That produce at the farmer's market? It's not the same produce that you'll find at Kroger. If it were, the farmer's market wouldn't last long.

Taking the emotion out of the analysis, all i am hearing is that the PE uses more capital, but produces a cheaper, more efficient service.

If the original small business owner sold, the money they got paid isn't gone - they could've used it to start another small business (or fund one as a VC themselves). I don't see how PE is stifling anything, but to produce a more intensely competitive environment.

> produces a cheaper, more efficient service.

More profitable perhaps, but not cheaper. In fact, usually more expensive, because the PE firms buy up all the clinics in a city, eliminating competition, and then they can set the rates to whatever they want. Needless to say, any "savings" are passed along to the investors, not to the consumers.

> If the original small business owner sold, the money they got paid isn't gone - they could've used it to start another small business

They're usually selling because of retirement, so they're not going to start another business. The issue here is that the business is not passed along to another new small business owner, it's passed along to a giant PE firm.

> produce a more intensely competitive environment.

In reality, to reproduce an environment with less competition and more consolidation, as mentioned above.

Great, that "less competition" means higher prices... Which means someone setting up a new clinic can benefit from those higher prices - oh look, now you have competition again.

Sure, until they have no competition anymore, and raise the prices to whatever they want them to be, extracting 99% of value from what they offer with a huge moat that eliminates all competition. Then the consumer is left with no pricing negotiation and the experience is objectively worse for most of the society.

The escape hatch for that is taxes to the powerful market entities, that revert value back to the less powerful market entities, but that's not popular in the U.S.

> i am hearing is that the PE uses more capital, but produces a cheaper, more efficient service.

You have to understand what "more efficient" means. It really means "it's shit and only getting worse, but isn't bad enough to abandon the service entirely". It starts with a corresponding price drop, and you either get a race to the bottom, or the competition gives up early, at which point the quality continues to go down the drain, but the price stays the same, as the provider pockets the difference.

Because customers tend to almost universally agree that they create a worse service in the process. Scaled systems perform poorly in areas where people require customized service rather than a one-size-fits-all experience, and veterinary care is absolutely not a one-size-fits-all type of service.

Cheaper and more efficient does not mean higher quality.

Quantity has a quality of its own. Dude named Piketty wrote almost 2k pages about wrt capital accumulation. The opposite of what you propose is what actually happens. For another example, please see Amazon.

I haven't thought about it this way, I hope youre right. Here's what comes to my mind after PE buys vet clinic:

- Analyze all the employees using a "system" to gauge "productivity metrics"

- Pressure management to get rid of an employee or two to increase profits, making everyone else work harder.

- Seek additional income streams from dubious "insurance" products that may or may not pay. Help market their products by spreading false information that insurance gives them "peace of mind".

- Increase costs to see what the market will bear

- Put all employees on a unified HR system that has a strict 1-size policy, little gotchas like "no health insurance for the first 60 days", limited PTO, etc. Ignore anyone who speaks badly because "this is company policy ". Give the business director a bonus when he finds new and creative ways to "maximize profits" at the cost of denigrating staff and making them work harder under more constrained policies.

- Lock all dr's salaries and staff pay to the same scale because "policy". Work harder? Why try? I get paid the same amount either way. Employees game the system to work the minimum to avoid termination. Not because they love animals, those people quit in the first 60 days (which is why our health coverage doesn't kick in before then).

- remove as much of their agency as possible, helping a poor persons injured dog is no longer acceptable, pay-as-you-go and sliding-scale billing are so 1990's, we have a business to run, the policy is "put the animal down and move on to the next paying customer". House calls are a liability and take valuable time away from the business, effective next year they are no longer allowed.

- appeal to emotion to upsell wealthy customers to services that promise to prolong the animal's life (but increase suffering and are medically unethical).

- Fewer people go to the vet now because they can't afford it, more animals suffer so that rich men can have more profit.

Where did this list come from?

inference, based on how corporations are run vs small business

It's not enough that large corporations use economy of scale to undercut smaller businesses. That would generally be a good thing for consumers. Instead, we're seeing larger companies use their influence to increase regulation: a cost they can absorb that smaller businesses cannot.

We've seen this in medicine in the last 10 years. I know of no independent doctor's offices in my area. They looked at the cost to comply with electronic medical records requirements and joined a local health network.

If the government increases regulations, then it tends to place a bigger burden on small businesses than big businesses for the same reasons you highlighted about overhead.

Vet is probably a very good example of economies of scale. I remember a vet in my town in Brazil complaining how hard it is if he get ill (or take vacations i presume), that he will lose his customers and how much he regretted not becoming a state employee.

My wife works in a lab for a regional medical company. They just sold out their labs to a national medical lab company, effective January.

She's only heard bad things about this other company. Her wage is basically guaranteed to stagnate, they're not as generous about PTO, and they contribute surprisingly little to health insurance plans.

Oh, but I'm sure the management is flying away on a golden parachute.

Ah, so the overall economic efficiency improves and then everyone's better off. Wait, what's wrong with that?

Think of Comcast but for puppies' health

The actual problem is that the unmonetizable value gets tossed out by PE. E.g. customer service will take a massive dive because everyone working for the clinic or whatever else will be time-pressured out of good service.

Generally the problem with treating everything via pure financial models is that some things are valuable but hard to measure financially and those are inevitably destroyed by PE and other entropy-maximizers.

You're shifting goalposts. Your first comment was about how small businesses could just refuse to sell, then a commenter described the (very real) consequences of that decision: a person has to work harder, for less money, to compete with entities that can outspend them by a few factors. Now you're saying that's more efficient overall which is a completely different point.

And, that's true, it is more efficient. But those veternarians, despite now having their weekends off, are paid barely market rate for their skills (if that) and more importantly, no longer running their business: A PE firm is. That means they have zero recourse if the PE firm starts doing PE firm shit: keeping bare minimum stock at their clinic of every last consumable, to avoid taxation; keeping bare minimum staff at all times to avoid paying workers; abusing staff and causing high turnover; basically every stupid ass "why would they do that" type decision you've heard of a large business making in the last 30 years, PE's LOVE those decisions.

And that's not even going into the fact that the profits of that business are no longer going to the community in which it operates, they're going to far away shareholders.

More efficient for the mega-vet, sure. Once you've consumed all the competition, there's no need to compete on price anymore. Prices can go up quite a bit before it becomes economical for a new entrant to take a risk in the market. Except maybe another mega-vet.

See what Walmart did to communities and small business. Efficiency is not all roses.