December 15, 2011

 

 Corporate practice becomes part of the landscape

 
Banfield Pet Hospital
Dr. Karen J. Johnson examines a dog at a Banfield Pet Hospital in Portland, Ore.
Courtesy of Banfield Pet Hospital

posted November 30, 2011

Corporate practices have established themselves in recent years as part of the landscape of companion animal practice in the United States.

The biggest corporate practices by far are Banfield Pet Hospital, with about 800 hospitals, and VCA Antech Inc., with about 550 hospitals. Banfield and VCA are general practices, while VCA also owns specialty practices and a laboratory network.

Banfield and VCA representatives say various factors have contributed to the growth of their companies. Critics of corporate practice assert that the model emphasizes profitability over other considerations. 

Banfield, VCA

Dr. Jeffrey S. Klausner, Banfield senior vice president and chief medical officer, said the company has been opening roughly 40 to 50 hospitals annually in recent years. Each hospital has about two to five veterinarians.

Dr. Klausner attributes Banfield's growth largely to the popularity with clients of the company's wellness plans, annual packages of preventive care. He said another factor is the convenience for clients, given that almost all Banfield hospitals are located inside PetSmart stores and are open seven days a week.

Banfield's approach to patient care is to "make it easy to get care, make it affordable, make it convenient, and focus on prevention so you can keep pets healthy," Dr. Klausner said.

Veterinarians who work for Banfield can focus on medicine rather than the business side of practice, Dr. Klausner said. Among other attractions, Banfield is able as a big company to offer better benefits than most small practices can.

Tomas W. Fuller, VCA chief financial officer and vice president, said VCA has more than tripled its number of hospitals in the past decade. The company has expanded mostly through acquisitions of large practices, often buying out owners who want to transition into retirement.

Veterinarians work for VCA partly for lifestyle aspects such as good work hours, Fuller said.

Fuller said the VCA model is "to focus on running the business and let the doctor focus on practicing medicine, so maybe we free them up to do a little better job of that. Our goal is to try to really help the veterinarian focus on providing quality medicine."

The VCA approach to patient care is to offer the best medical treatment plan to clients, Fuller said, then to look at the options if cost is an issue.

As big companies, Banfield and VCA are both able to achieve many economies of scale. Among other examples, Dr. Klausner and Fuller each noted that their companies have more purchasing power than small practices for inputs such as inventory and equipment.

VCA Arroyo Animal Hosptial
A veterinarian and veterinary technician examine a cat at VCA Arroyo Animal Hospital in Lake Forest, Calif.
Courtesy of VCA Antech Inc.

 

Critical issue

Corporate practice is a critical issue for the profession, according to some AVMA members who have submitted comments for an ongoing scan of issues by the Association. As part of strategic planning, the AVMA summarized the comments it received in February and March 2010.

According to the summary, "Some members believe that consolidated, 'corporate' practices are important to the future of our profession because they will allow more efficient care and use of advanced technology, whereas others believe they will compromise patient care in favor of the 'bottom line.'"

Dr. Douglas G. Aspros, AVMA president-elect, also has mentioned corporate practice as an issue.

"It has already changed and will continue to change the landscape of veterinary practice," Dr. Aspros said. "The concern is, how do we adapt to the changes?"

One potential problem is that the traditional route to wealth accumulation for veterinarians has been practice ownership, Dr. Aspros said. As owners, veterinarians also can continue to practice while advancing their careers—rather than moving into a purely managerial position at a corporation.

Dr. Aspros does not think that corporate ownership of practices is "inherently evil," but he does think that the nature of corporations is to focus on the bottom line. In human or veterinary medicine, he said, standardization to control costs might compromise patient care in some cases.

Balancing act

Banfield's Dr. Klausner said his company does have standards of care, but they are guidelines to promote good medicine.

"We really strongly believe, like every veterinarian, that if we do good medicine and provide great care, we'll have a good business," Dr. Klausner said.

Fuller of VCA said his company does not have medical protocols but does suggest good practices.

"Is there always a balancing act of cost and quality? Absolutely," Fuller said. "Maintaining quality and focusing on medicine is critical to our long-term success."

For the near term, Fuller and Dr. Klausner have different takes on how to respond to the increase in the supply of veterinarians and the weakening demand for veterinary services.

Fuller said VCA acquires existing practices instead of opening new hospitals partly because of increasing competition for clients.

Dr. Klausner said the belief at Banfield is that the country does not have an overabundance of veterinarians, but too many underserved pets.