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Monday, October 26, 2009

Private Vs. Corporate Medicine

Here in the US we have two basic business models for veterinary practices.  The most common is the standard private practice.  Most are owned by a single veterinarian who has a single practice location.  However, it's not uncommon to have 2-3 partners owning a practice together and perhaps having a couple of locations in an area.  A corporate practice is run a bit differently.  There are multiple locations within a region or nationally who are run as any corporation:  there is a president, board of directors, location managers, and so on.  In the US the two biggest corporate practices are Banfield, The Pet Hospital and VCA, each having hundreds of locations.  However, there are also smaller, regional corporate practices that may have a few dozen clinics.

What does this matter to the average pet owner?  Not necessarilly much.  You will have a personal relationship with your doctor and will get to know the staff at the location, regardless of who owns  it.  A private owner has more flexibility in what decisions they can make for your pet and your charges.  With a corporate practice you have more consistency when you move around.  Like with any large company (McDonald's, Sears, Payless Shoes, etc.) you know what you will get when you go to any location in the country.  With our highly mobile American population, having a basic idea of what to expect from your veterinarian often will help in chosing a new vet when you relocate.  But regardless of who owns or runs the practice, studies have shown that most clients make their decisions about veterinary care based on two factors: location and veterinarian.  If they like the vet and the practice is conveniently located, the client will continue to take their pets there.  Believe it or not, according to the surveys price is not the most important factor to clients.

What about as a veterinarian choosing where to work?  The pros and cons are bigger to the vets themselves.  With a private practice you have a chance of eventually "buying-in", becoming a partial or even complete owner.  You also have fewer steps to go through to get approval for ordering new medications or equipment.  If you're the practice owner yourself, you have complete and utter control over how the practice is run.  The down side to this is that as an owner you spend a large portion of your time being a business owner and manager, not a vet.  Many vets don't want this, as we don't go to business school.  Historically vets are also poor business owners, with a large portion of veterinary businesses failing.  To be successful you have to have an entrepreneurial mindset, something not every vet has.  The big benefit to this is that a practice owner will have the potential to make more money than any other veterinarian.

A corporate practice is nice for those who never want to own their own business.  You have other people handling the management, payroll, business matters and so on so you can concentrate on being just a vet.  It can be nice to put 100% of your time and effort into practicing medicine.  If you work for one of the larger practices you also have the opportunity to simply transfer to a different location if you move around the country, keeping your seniority and benefits, as well as being able to jump into the new location with minimal hassle.  The down side is that you are limited to what the corporation decides to keep in stock for medicine and equipment, though this is not as big of a problem as many would think.  You have to uphold the practice's policies and procedures, though this is true of working for a private owner as well.

Which is better medicine?  Honestly you can have high quality and poor quality care with both business models.  For a client I would recommend simply finding the right fit for you and don't worry about who owns it.  For a vet looking for a job, check out both.  If you want to be an owner, then private practice is the way to go.  If you don't have that business mind-set and don't plan on ever being an owner, then a coporate practice might be a good fit.

I'm curious about whether or not both models exist in other countries.  So to my veterinary readers around the you have corporate practices as well?