Ideally you'd expect the market to deal with it how it normally does, which is to have people open up competing practices to undercut them. I think the problem is that VC has correctly identified this as not only a field where people are willing to pay a lot based on emotion, but it's also regulated enough that their strategy of buying out existing practices leaves them fairly safe from a lot of competition. I wouldn't be surprised if non-competes factor heavily into their strategy either.
In that case I would hope the government could at least step in to combat anti-competitive behavior (which I think this definitely is), but that always seems to lag a decade after it's first needed.
Locally, the answer was that the folks who could open up a competing practice were under non-compete agreements if they left the PE-owned place. (We had a local legislator step in to help void them.)
> Marion said early efforts to enlist former VSES doctors or others in the community to start an ER were discouraging. Some VSES doctors had already left the area, some had signed contracts for new jobs locally, most were worried about the constraints of noncompete agreements they signed with Thrive, and "no one seemed eager to take on the tremendous responsibility of owning, managing and running an emergency hospital even with the help and support of the local veterinary community."
hahahaha. Imagine if SCOTUS decides said law banning non-competes is unconstitutional. Could they do it in such a way to kill the "non-competes are unenforceable" law in CA? that would suck.
No, it's the FTC doesn't have the authority - this is an easy thing to do federally, just convince congress to ban them... most things should not be decided by the executive.
> Under this Act, the Commission is empowered, among other things, to (a) prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe trade regulation rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress.
It's hard to see non-competes as anything other than an "unfair method of competition", and it's shameful it has taken this long to act.
My only concern in this context is that this is in relationship to employee relationships. If said vets had an ownership stake in a sold practice, could they be restricted by virtue of this different context?
Will be interesting to see how the recent FTC non compete ban plays out in this space. It seems like a prime candidate to promote competition as the key licensing is held by the individual (the vet) as opposed to the company.
It doesn't guarantee anything, especially given the Republican super-majority already ensconced in SCOTUS, but there's only one small-d democratic way out of this situation...
>always seems to lag a decade after it's first needed
Not always. Back when the US enforced antitrust there was no decade wait for results. However these days all you can expect from the government are low corporate tax rates, high interest rates, and a thumbs up saying the economy is strong. There is no antitrust enforcement coming. The only thing there is an appetite for is to loot the younger generations.
The other problem is private equity can burn money in the short term to undercut new competitors at their most vulnerable times and return to profit gathering soon after.
Requiring a degree or certification (at a legal leval) is a form of regulation. That it's costly and time consuming just makes that regulation a larger barrier. If you can somehow remove much of those people that already have the means to satisfy that regulation from the market, you've successfully controlled the supply for at least the amount of time it takes the pipeline to produce more of them.
Now I'm wondering if the VC firms took steps to disrupt that pipeline as well in some way. That would be pretty overt, but I've never gotten the impression that these people feel the need to be at all subtle.
Most (all?) states in the U.S. require state licenses to practice, and you can't get much more regulatory than that, so yes, I count that.
There have been a few different reports put out about the current situation and how vets are being bought out. The article here is one of them. Is your theory that they aren't actually buying vets, or that they aren't raising prices, or that what they're doing is irrelevant to the current problems?
I know in my town and from my personal experience over the last two years dealing with five different vet practices, one of which is a local VCA branch and also one associated withe the local humane society, all the reports ring startingly true. VCA is extremely expensive compared to all other vets, but is also the only emergency location in the area. If we go in and it's not an emergency it's about 40% more than other vets. If it is an emergency it's much more, but at least there's a plausible reason in that case.
That said, there are more pets. Our local humane society is at well over double capacity for animals that are mostly aged suspiciously close to the beginning of covid. Multiple things can be happening at the same time though. Why do you think VC decided now to get into animal health care?
Yes. That must be true because every vet office I go to advertises it heavily. The way car dealers push warranties.
And also, some theorize low birth rate is causing people to treat their pets like children thus necessitating more care. Think how many people call themselves a dog mon. Also, it’s really only been a couple decades since Frontline caught on and people largely let their animals live inside.
Vet schools are largely for-profit, often in other countries. I have a good friend who does admissions for one in St Kitts, they turn down a lot of people. I bet they all do.
Demand grows faster than supply, prices go up. Prices go up enough, PE firms start buying them.
The short term effect of VCs managing budgets might mean more support for public health initiatives (which the AMA has historically opposed) because they lower costs. So maybe we'll all be a little less sick or even a little less fat. Assuming they can focus on timespans longer than 3 months.
I'm concerned about what MBAs can do to us all after that honeymoon period because there are less benevolent ways to cut expenses, too.
This is patently false. There has never been money in cow doctoring like small animals, and the growth in new vets is almost universally for fur babies.
I was going to say, if you've ever heard the devops analogy about cattle vs pets, the cattle don't get treated very well since the goal is that they're fully replaceable.
In that case I would hope the government could at least step in to combat anti-competitive behavior (which I think this definitely is), but that always seems to lag a decade after it's first needed.