The Indicator from Planet Money - The Vet Clinic Chow Down

We love our pets, but do you know what Corporate America loves even more? Veterinary clinics. Today on the show, we explore the explosion of corporate investment in the vet clinic world.

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Gizmo is a flying squirrel. He lives in Marshalltown, Iowa. And recently, Gizmo had to pay a visit to his that Grant Jacobson is gizmos what was wrong with Gizmo. He was a little less thrilled. He was here for a neuter surgery. So nothing wrong with young but today he might have had a grudge heading on. I was going on, there is a dog answer howling cuz you said yeah, just a 6 minute drive away from Grant has another vet. So gizmo has choices but there is a backstory here because Grant worked for that other vet for 19 years. He says he was planning to buy the practice, it was kind of understood the fact that that would happen. But then he started hearing these things. From the owner that made him suspicious is going to be these people there. From one of the corporation's there. They're doing a

This evaluation, you know, I'm not really planning to sell to him but I want to find out where the place is worse. It's suits showed up. You can see where this is going. Great. Aunt got beat out. He says those corporate visitors offered a million dollars more for the practice than he could afford and he was not feeling happy about this. Grants bid is Mars, giant International chocolate company that makes M&M's and Twix bars and has locations around the world. And this trend, it is all over corporate and even private Equity money from everywhere, from Goldman Sachs to Mars to gaap Holdings, which is the parent company of Krispy, Kreme pouring into the BET Industries. I'm Sally. Herships, and I'm Stacey Vanek Smith. This is the indicator from planet money today in the show, when, and why giant corporations started investing in health care, for our gerbils and our dogs and a cat

And how all that corporate cash can impact independent. That's like Grant.

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Not everybody is an animal lover, what I know but for the 63.4 million Americans who own dogs, the 42.7 million Americans who own cats and of course we can't Overlook the owners of fish birds, reptiles horses, flying squirrels, for all of those pet owners. Their love translates directly into dollar signs. You know, I have clients referring to their dogs as their children siblings and their parents as their dogs or cats. Grandparents cellular is a vet and she sees this kind of spending for Sam all the time last year in the u.s. spending in the Veterinary Care Market totaled. 31 billion dollars today we spend more than double what we did a decade ago on our pets and gosh buying toys of dollars on clothes. You know, people will redo their house.

This. Yeah, they'll build catteries outside. I'm actually going to do this.

Baby, you told me, you were a cat lover. I doubt right now, people who will bring mortgage houses for some of these vet bills are 20 $30,000. If you're going to get a hip replaced, if you have major operations, you had planned to remortgage their houses. Yes. How you going to get $30,000?

Where you going to get that money. But it did not used to be this way and I know this may shock some pet owners out there but when did tell her with a kid, a lot of animals were kept outside the house. Maybe you took them to the vet a few times a year. So when did we start spending? Thirty Grand in surgery for our pets. Mike Dix was Chief Economist for the American Medical Veterinary Association. And now he's a consultant for bets. I teach gotten around to ask clients one set of questions because it's very important. What is your pet sleep for options that sleeps outside sleeps in the garage in the house, it sleeps in my bedroom where are pet sleep illustrate this one huge shift that occurred and invention which completely changed the way we interacted with and spend on her pets. The human-animal bond saying really really took off in the late 80s as parasiticides came on and we were able to keep those dogs in the house parents.

Oh sorry. Things that kill fleas in Tex. I mean you know love has its limits of you but do I love you enough to get fleas and the more people are inside? What those cuts, the more, they noticed things, they notice the dogs itching or a shrub in a size or dragging its butt on the floor. What? And when they do, you might say, they call the vet, according to the American Pet Products, Association. Last year, we spent over a record-setting hundred billion dollars on our pets for food and treats and do it since the eighties and nineties. This spending has been increasingly catching the eye of Corporations and Veterinary practices can be seen as a reliable Investments. It's got low overhead. It's not like you have to build a factory or create a production line. I wrote tomorrow's I wanted to know why the company invested in bets. They declined an interview but Marse also makes pet food like pedigree and whiskers so

It just makes sense to also invest in. That's Mike says there are about six thousand small to medium-sized vet practices and hospitals in the US. The kind that have at least two or three full time bets on staff, but out of those, 5,000 of them are now owned by big corporations. You might not know it because a lot of them like to keep that small business look and feel but many are consolidating or even buying and flipping them. And that is having an impact on Independent, that's like, Grant in Iowa. That's our boss. And in debt paid to go to school, which is expensive. Average tuition, is more than $200,000, some vets will never be able to pay off their loans, they pay the interest and eventually the government just forgive the balance. One way to deal with the servicing that debt is to become a practice owner.

But you're squeezing come out right? I mean they said it was difficult for him to get in in the first place with that much debt. But now with the corporate competition it is almost impossible course, it's always good to get a second opinion. Gary, Ackerman was a vet for 20 years now. He runs a Consulting service for vets, looking to sell their practices and if that's you, you got options. People visiting them. They got people calling them, they're getting emails, they're getting letters. You literally have to have your head in the sand to not be aware of what's going on there. It's, I practice like three doctors and up. It is a seller's market. Gary says, another reason so many corporations are interested, is that over the past decade and a half, they're going all these huge leaps in technology with medicine, just like for humans, used to be exotic, but now you can do a total hip replacement on your Chihuahua. And yet those upgrades do you come with increased costs.

But at the same time, he says big investors can operate more efficiently, CT scanner, that's probably going to have better economies of scale than having to buy it for your individual practice. A lot of times, frankly, an individual practice can't afford that. Also pretty much everyone

went to school to get into the financial side of the business, right? They did it because they

and there are still ways for vets to buy their own practices. Like Mike the veterinary, missed says, you can buy the kind of small single or to doctor practice that a big corporate buyer would not be interested. We're also he's developed a plan where an established vet sells off their practice over a period of like 8 to 10 years to a younger employee and back in Marshalltown, Iowa starting his own practice. It was not what he planned, but he says, business has actually been great. He's been hiring and expanding and now he has a staff of almost 20 people and Stacey. I know about Gizmo the flying squirrel and wondering about Gizmo. How is he doing? How is Gizmo Feeling? By the way, I got a picture of a

Surgery site today is this normal? Yes, this is normal. It's less scab where the surgery was.

This episode of the indicator was produced by Brittany Cronin with help from Billy Moon. It was fact-checked by Michael hot, the indicators edited by Kate concannon and his production of NPR.
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