Today's Veterinary Business

APR 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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Page 46 of 67

45 April/May 2018 • TODAYSVETERINARYBUSINESS.COM Corporate practices have sought to right this inherent flaw in an independent practice's system. Since their widespread implementation, they've brought changes to our profession as a whole — some great, some not so great. Corporates have introduced investment money, business exper- tise and good intentions, among other things, but they struggle to understand our intimate relation - ship-driven health care profession. Our "just right" lies somewhere in between. (Full disclosure: I own indepen - dent practices and currently work in a corporate practice. I admire, value and respect both.) Too Cold: The Corporate Model Famously, corporations have invested, and continue to invest, tremendously in our profession. Investments in business expertise, technology, efficiencies, benefits, equipment, new career opportu- nities, training, increased compen- sation and wellness promotion are the tip of the iceberg. Corporates were among the first to offer a full suite of benefits to employees, the first to embrace preventive care, promote wellness plans, drive pet insurance, sponsor internships and residencies. All in, they have improved, and will continue to im- prove, our profession in many areas. That said, there's something magical about independent veteri- nary ownership: the veterinary per- spective in daily decision making that is lost in the corporate model. To explain, I'll employ a military analogy. The corporates view our profession like an army general views soldiers. In this analogy, the veterinarians are the soldiers taking orders. Corporate leaders — the generals — lead their soldiers in a one-sided manner. This model served corporations well when their product was produced by hourly line workers, but it doesn't work when your product is complex health care services provided by highly educat- ed medical professionals. The model could work with a subtle shift in the corporate paradigm. What they don't get is this: They're not leading the army, they're leading the air force. In the air force model, generals lead a so- phisticated multidimensional oper- ation delivered by a highly trained officer corps (aka pilots/veterinar- ians) as opposed to order-abiding soldiers. In this analogy, the corpo- rate generals need only to clean the bugs off the windshield, fuel the jet and get out of the way. Corporates need to understand that they are in the air force, not the army. Corporate consolidation is well underway. It's a natural economic response to a very successful and fragmented industry. It's also a response to demographic forces in which thousands of aging veter- inarians are realizing the time is now to exit their practices, only to find that their associate veterinar- ians are not interested in buying the practice. Corporates are driving practice valuations and supporting many a retiring veterinarian. Consolidation cycles typically take place over 10-year periods. When the dust settles, I predict that much like our colleagues in dentistry, we'll have a good mix of independents and corporates. Independent practice owners will not disappear. The veterinary Independent practices — mom and pops — have been the backbone of our profession for generations. They're our industry's baseball and apple pie. While we all know independent owners to be passionate, engaged in the community and superb health care providers, they also are notorious for being less-than-optimal business managers. Community CREATIVE DISRUPTION By Bob Lester, DVM The Goldilocks concept How can we combine what independent veterinarians yearn for with the best of the corporate world? Continued on Page 47

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