Thomas Edling As we discuss corporate veterinary medicine, I will define a corporation as a large company or group of companies that is controlled together as a single organization (Cambridge Dictionary n.d.). This definition conveys what most people refer to when corporate veterinary medicine is considered. In fact, most veterinary businesses are legally structured as corporations to provide the owner legal protection but are not thought of as corporate veterinary medicine. The history of veterinary corporations is relatively short, beginning in 1987 when VCA (Veterinary Centers of America Inc.) purchased its first independently owned veterinary clinic. Shortly after that Banfield/Medical Management International, Inc. began its corporate climb and in 1994 PetSmart teamed up with Banfield to open veterinary clinics in their stores. Mars, Inc. stepped into the veterinary clinic business in 1994 when it became a part owner of Banfield Pet Hospital. Since that time Mars became the sole owner of Banfield and, in 2015, Mars bought BluePearl. Then, in 2017, Mars purchased VCA Inc. and, in 2018, Mars crossed the ocean to Europe with the purchase of Linnaeus, followed by AniCura. Veterinary Specialty Hospital, the first specialty referral and emergency practice in Hong Kong, was purchased by Mars in 2020 along with Veterinary Emergency & Specialty Hospital in Singapore (Mars Veterinary n.d.). What is happening in veterinary medicine is simply the common business practice of “roll up.” This is a successful strategy in which a large company purchases successful smaller companies and folds them together into a larger corporation. Private equity firms are eager to offer funding for these ventures as they recognize the relatively safe investment and good returns veterinary companion animal practices provide. Currently, it is estimated that veterinary corporations own over 10% of general companion animal practices and close to 50% of specialty referral practices (Tanella 2020). Small private practices with one or two practitioners are not generally the target of veterinary corporations simply because the economics do not work in the favor of larger corporations. Veterinary corporations are here to stay and there is no reason to believe this trend will slow or stop soon. From a business viewpoint, veterinary corporations provide advantages over small private clinics such as economy of scale when purchasing medications, equipment, and supplies. Corporations will also be well versed in successful business aspects and will have employees skilled in these practices. They may also offer a more standard work schedule for employees. Some corporate practices may also provide standards of care for the veterinarians working in their clinics. These can be very helpful documents that elevate the care for pets but may also be too prescriptive and restrict a veterinarian’s clinical judgment. In contrast to working for veterinary corporations, the advantages of owning small private practices are considerable. Owners have autonomy over their workplace regulations, settings, and practice without oversight other than their state veterinary licensing board. Private practice ownership comes with many perks as well as the numerous headaches of managing any small business. When most veterinarians graduate from veterinary school, they take the oath of the American Veterinary Medical Association (AVMA), which outlines societal expectations of veterinarians (AVMA n.d.a). Additionally, veterinarians working in the United States are expected to adhere to the ethical code of conduct described by the AVMA, the Principles of Veterinary Medical Ethics (PVME) (AVMA n.d.b). Veterinarians should study these guiding documents to help them better understand their professional obligations as these ethical guidelines should be followed by veterinarians under all work conditions. Many of the concerns expressed about corporate veterinary practices arise from corporate goals not aligning with the Veterinary Oath or PVME. This chapter will address potential conflicts that can arise between corporate business management goals and the individual veterinarian’s professional ethics. Frontline veterinarians are the first to see an animal when they come into the clinic and are the professionals interfacing between the client/pet and the corporation. There can be several ethical challenges for veterinarians in this position as they attempt to apply the overarching guidance from the corporation in situations they encounter. At times, the corporate guidance may not be specific enough, or the corporate guidance may be overly restrictive. These circumstances may lead to concerns and possibly direct conflict with the veterinarian’s personal and professional ethics. Take for example a situation where a veterinarian sees an animal owned by a person who does not have the economic means to pay for the care necessary to help the pet. The veterinarian may attempt to offer multiple levels of care with differing costs for the client and patient to no avail. In some instances, the client simply cannot afford the needed care. The veterinary corporate policy may be very clear that discounts will not be given to clients that do not fit into categories such as military, first responders, elderly, guide dog, etc. The veterinarian has an ethical dilemma. They would very much like to help the client and pet but are not allowed to do so. What should they do? Should they attempt to “massage” the charges by coding incorrectly in the computer management software? Is it ethical to falsify the computer records? Does falsifying the computer records also falsify the medical records? Is it ethical to lower costs when the lost money will be absorbed by the corporation? Is this fair to the corporation? They can reach out to their supervisor but know in the past that has resulted in a denial of permission to discount services. These situations are common (see Chapter 8), and a veterinarian should anticipate this occurring in order to have the ability to develop viable solutions. What is the ethical stand to take? Consider a similar situation in which an owner requests that cosmetic surgery be performed on their pet (see Chapter 10), which is allowed by the corporation but is ethically untenable to the veterinarian. The corporation is clear that those types of surgeries will be performed and actively advertises the procedures to the public. What should the veterinarian do? The clinician may attempt to discuss the medical and ethical concerns with the client to dissuade them from having the surgery performed on the pet. In an ear cropping example, many people do not understand the trauma and pain involved in cutting off much of the pinna and, once explained, will elect not to proceed. But this may result in lost revenue for the corporation and the veterinarian. Another solution would be for the veterinarian to transfer the case to a colleague in the practice who is willing to perform the procedure. It would be advisable to have these conversations with a supervisor prior to them happening so a logical and reasonable solution can be determined. Situations that are fully supported and encouraged by the corporation but are not acceptable to the veterinarian are a common occurrence. What else could the veterinarian do in this circumstance? It is a common practice in corporate veterinary clinics to have well-defined financial production goals for veterinarians. In most cases, these production goals are tied to the veterinarian’s pay and, if not met, they may be used to downgrade the veterinarian’s compensation. From the corporation’s viewpoint, production goals integrated with compensation may motivate veterinarians to work hard and consider the business aspects of the practice. Production-based pay may also discourage veterinarians from discounting and giving away services. From many veterinarians’ perspectives, production-based pay encourages them to focus more on money than on practicing the best medicine. This system encourages veterinarians to pursue the maximum fees during every visit instead of providing the best animal and customer care. Should the veterinarian recommend the most expensive diagnostic work-up to pad the bill? Those tests may help the veterinarian understand the patient’s medical condition, but are they necessary? In some of these situations the veterinarian must choose between practicing good medicine and a good paycheck. What should the veterinarian do? It can be difficult to counsel clients and diagnose a complicated medical issue in the approximately 15 minutes allotted for consultations. Should the veterinarian take the time needed to help the patient or keep on schedule? If the veterinarian elects to stay longer with the client and put themselves behind schedule, should they make up for the extra time by advising clients to purchase unnecessary supplements or products such as shampoos? Another common tactic encouraged by some corporations is to “upsell” medications when less expensive medications would work equally well. I have witnessed corporations that post running totals of each veterinarian’s statistics, such as per-client charges and total income, in the break room to encourage competition. All these situations can induce ethical turmoil for veterinarians as the push for profit can be a driving factor in lieu of proper care. Referring a patient in need of care or expertise (see Chapter 10) that is not available at a veterinary clinic can cause stress when corporate guidelines, written or implied, discourage referral outside the corporation. Keeping a patient “in-house” when it should be referred is also a violation of the PVME. In times of financial hardship, should practices continue treating an animal unsuccessfully simply to increase the clinic’s financial gain? This is a significant ethical problem as most veterinarians find it difficult to justify keeping the patient when they know the animal would be better served elsewhere. Another ethical question is should a clinic encourage their veterinarians to perform all available diagnostic tests on a patient prior to referring them to a specialist? This helps meet the financial criteria required by the corporate guidelines. Yet, this may reduce client resources needed to permit the specialist to help the patient. Justifying actions based on financial and not medical reasoning is an ethical dilemma faced by many veterinarians. What is the answer? Another related aspect of this theme is when veterinarians are treating terminally ill patients. The ethical practice would be to have a frank discussion with the owner about long-term outcome, quality of life, and costs. Some corporations encourage veterinarians to continue to treat the patient right up to the last minute when that might not be the best option for the client and patient. Some owners will continue to the very end without regard for costs. Other clients may elect humane euthanasia when all aspects of the situation have been discussed. Is it unethical for clients to be encouraged to continue futile treatments primarily to raise more revenue for the clinic? One concern that can be a significant cause of stress is continuing a relationship with a client who consistently acts or speaks improperly or abuses the veterinary staff because they provide considerable income to the clinic. These clients may have multiple animals and never ask about the expenses associated with caring for their pets. Written and unwritten corporate guidelines can make it difficult to “fire” this type of client because there would be perceived financial loss. These clients can lower the morale of the clinical team and be the cause of absenteeism, elevated levels of anxiety, and employees quitting. When an abusive client is allowed to remain, the ethical quandaries that occur generally become much worse for the clinic than the financial loss of firing the client. What is an ethical method for handling these clients? One of the positive financial aspects of a corporation owning several clinics is the purchasing power acquired due to economy of scale. The more a corporation purchases, the better price it can obtain from the supplier. This can also bring about ethical issues as decisions can be made to purchase a medication that might not be the best choice but was offered at the most economical price or margin. In some corporations, purchasing decisions are made by nonveterinarians without veterinary oversight. This can lead to frontline clinicians being forced to use medications that are not the best option for their patients. This ethical quandary can be considerable as the veterinarian will not see the response to treatment they would expect if the appropriate medication were available. In some circumstances nonveterinarians in upper management may pressure clinicians to use medications with a higher profit margin. This situation may occur because the manager does not have the medical background to be able to understand the differences between the medications but does understand the costs and profit margins involved. I have seen this circumstance be the cause of a veterinarian quitting their job. How should veterinarians manage these situations? Will they lose standing in their job if they request availability of medications with lower profit margins? Another situation that may be exacerbated by corporate guidelines is convenience euthanasia (see Chapter 21). This topic presents the veterinarian with a complex moral issue to navigate. This end-of-life quandary can be further complicated by a corporate policy that requires or strongly encourages the veterinarian to perform this service. What should the veterinarian do when faced with a euthanasia request based on client convenience? What are their options? What if the owner tells the veterinarian they are going to initiate legal proceedings against the corporation if they do not euthanize their pet? A corollary to convenience euthanasia is the situation where an animal is insured, and the insurance company has authorized euthanasia with a payout going to the owner. The animal has a condition that can be treated with a good chance for a positive outcome. The veterinarian discusses treatment options with the owner, but the owner elects for euthanasia to collect the insurance money. This situation can become more convoluted if the corporation has a business relationship with the insurance company, which may influence the veterinarian’s decision. What options does the veterinarian have in this case? In several corporations, veterinarians who have proven themselves to be worthy of advancement will be promoted to a frontline veterinary manager with direct supervision over other veterinarians. They may supervise veterinarians at a single facility or at multiple clinics. In all cases, the role of the supervisor is to be available, pay close attention to situations as they arise, and use teachable moments to help their veterinary team deal with medical, ethical, and business concerns. This supervision is especially important for veterinarians in their first few years out of school. In many practices this is a proven, successful model for advancement and a desired role. In other situations, the supervisory role may not be welcome but become a burden that the veterinarian is not ready to undertake. Should the veterinarian accept the new role even though they do not want the added burden? Does not accepting the promotion hurt the veterinarian’s chances for promotion in the future or job security? Supervision of veterinarians brings all the issues and concerns of the frontline veterinarian along with the added stress of corporate managerial expectations. Supervisors can learn the system and be the “protector” who allows their employee practitioners to function relatively free from corporate stress. Conversely, they may not only pass on the stressors due to corporate oversight but compound concerns. Supervision also generates an entirely new set of ethical issues, especially when the person is supervising veterinarians in their own cohort. When an individual from a cohort is singled out and elevated to a managerial position, it is common for some individuals in the cohort to have resentment toward the supervisor. The resentment can be worsened if the new supervisor was not seen as a competent clinician. It can also be taxing if supervisory roles reverse, and the veterinarian finds that a previous employee is now their supervisor. Supervising under a corporate umbrella can be both an effective means to advancement and disadvantageous. If the corporation has a well-run business management system and a well-structured and implemented training program, the ethical dilemmas can be substantially reduced. If the business is poorly managed or there is no training program and corporate support, supervision can be career ending. The management expectations and parameters established by the corporation will be essential in allowing for success. Time and training are crucial as most veterinarians do not have any formal training in how to supervise. Being a very good veterinarian does not translate into being a competent supervisor. Veterinarians elevated to supervisory roles need to be trained and provided the opportunity to learn managerial skills including time off from their normal clinical duties to be an effective supervisor. Some corporations expect veterinarians placed in managerial positions to continue to see their normal case load while managing a team. This added work can cause ethical concerns due to limited time and conflicting interests as a dual manager/clinician. With limited time, managers may schedule themselves the best shifts for financial gains or start practicing in a way that will lead to poor ethical choices for the patient. How do veterinary managers resolve the ethical dilemma created by serving both their clients and patients as a veterinarian and the corporation as a manager when the goals of each role conflict? Managers may also be held accountable for the financial goals of the team as opposed to only being responsible for the quality of their medical care. If they are responsible for both financial goals and quality of care, there can easily develop conflicting interests that will cause ethical problems for the supervisor and clinicians. This can be a significant cause for concern if the goals are unrealistic or if the manager is new, poorly trained, or has an underperforming team. When determining who to promote to supervisor, some corporations will promote the veterinarian who produces the highest average client transaction fees. If production is the only criterion for promotion, it is possible that the veterinarian being elevated to supervisor is not the most qualified supervisor or the most competent veterinarian. If this is the case, the veterinarians supervised by this person can have ethical issues due to the supervisor’s below-average clinical skills or poor management style. The ethics of the supervisor may also be brought into question. Ethical issues due to poor supervision can range from a supervisor scheduling a veterinarian to undesirable shifts, offering favoritism, promoting poor clinical ethics that are more profitable, and scheduling preferred individuals to shifts that historically provide a higher per-client income stream. What can veterinarians in this situation do to abide by their personal ethics?
17
Corporate Veterinary Medicine
Introduction
Corporate Owned Clinical Veterinary Practices
Frontline Clinical Veterinarians
Frontline Veterinary Managers in Clinical Settings – Single and Multiple Facility Management
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