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What do practice owners think about the different types of practice?

by
01 January 2015, at 12:00am

GARETH CROSS follows up his report on trends in employment within the profession by asking owners what they think about their business model – starting with the owner of a Midlands practice

HAPPY new year to all of you reading this. Regular readers will of course remember every word of last month’s column and how it dealt with the various trends in veterinary employment and people-power gleaned from the excellent RCVS survey of the profession.

My article can be found online on vetsurgeon.org or in the paper magazine on a nearby desk/bin/kennel floor, and the RCVS profession survey on its website. The vetsurgeon.org website also hosts a popular and entertaining forum which I know many of you use (I know that because the RCVS survey tells me you do).

Briefly, the trends show that the feminisation of the profession is accelerating, more men are now working part-time as are many women, over half of small animal practices still do their own out-of-hours, corporates now own about 20% of practices, about 20% of vets working in the UK are non-EU graduates; that and much more detail can be found in the December 2014 Cross-words column. Recent SPVS figures also show a very slight salary rise amongst employed vets but not a lot.

Seeking opinions

To start 2015 off I thought I would send my article to various practice owners and ask them their opinion about why their type of practice best suits the type of veterinary surgeon around these days and in the near future.

My main target groups would be private practitioners (such as myself but not me), joint venture enterprises such as Companion Care, corporates that wholly own practices, charity employers and so on.

I also am aware that I have been a little down on the corporate practices in this column and am keen to give them their say.

So first off I contacted a longstanding correspondent of this column and frequent contributor to the veterinary press letters page.

He owns a private four-vet small animal practice in the Midlands with two branches and is well-known to readers of this column as “Disgruntled from Staffordshire”.

Here is his unedited take on private practice as a place to work and a business to own in the 21st century, and why it’s the best model...

  • Clinical and financial freedom. “You make all the decisions, the chance to treat clients’ pets as you would do your own, without an externally superimposed template. Working in an environment where the only thing you have to do is the right thing: there are no performance targets or parameters to hit.

“You can invest in and develop interests in specialist areas of work that involve you as the only decision maker; you do not have to justify your investments and purchases to a committee, in essence you can do what you like and charge what you like as long as the bills and wages are paid.

“In a corporate environment you are restrained by costbenefit analysis, nothing is your decision. Everything goes via the management. Whenever I look at practices following a corporate takeover, within two years everyone who worked there has left or been replaced.

“Vets, certainly those of my age upwards [he is a 1985 graduate], were not really designed to be career employees: the increasing feminisation of the profession has probably changed this, women do tend to be less entrepreneurial in their outlook and far more risk averse than men.

“They are much more likely to settle into the role of long-term employee than men. And put up with it because of family and financial requirements even if they find the policies, directions and motives behind them repugnant.

“Most of the corporate empires are variations on a theme and are essentially following the successful opticians’ model of Vision Express. That’s fine, if pets wore spectacles and that is all there was to it, but actually there is far more to it than that. All opticians sell a range of spectacles and contact lenses and you get a standardised eye test that gives you your prescription. You go in with an eye problem and come out with a solution.

Huge variation in ability

“You go into the vets with a problem and come away with possibly treatment or surgery. Some people are good at surgery and some are not, it’s the huge variation in ability available at first opinion level.

“And that is where the optician model breaks down, it does not allow for the variation in surgical experience, expertise and commitment that makes the difference between binding a client and getting another 2nd opinion request.”

  • Career ladder. “In my day is not a phrase I am fond of. As a student finishing a five-year slog, the desire was to get out there and do it. We were aware of a few opportunities in industry, pharmaceuticals, etc., MAFF.

“The chosen few could be housemen at one or other of the universities, a chance to study and maybe collect further certification before going out into practice, or maybe stay on, study for a PhD and become a clinician – there were no residencies or diplomas to collect.

“Once in practice you could be employed by the PDSA, etc., or in private mixed or small animal practice. In a job you could work very hard and wait for the offer of a partnership or just step out on your own; the market was not saturated, the risk of failure minimal, you just waited two years without any food for your client base to grow enough to support you and your family, advertising and canvassing, etc., being strictly prohibited as acts of gross professional misconduct. It is with some annoyance that we watch the way these Vets4Pets operations mushroom out of nothing within a few weeks of very aggressive advertising.

“I can see the attraction of not wanting to confront these risks today, the market is much more saturated, and the appeal and security of the initial boost from a corporate welloiled advertising machine must be overwhelming.

“One of the hardest pills to swallow when setting up on your own is the complete and utter loneliness. The practices in your immediate area can be and often were extremely hostile towards any intrusion on their patch.

Unwelcome in the pool

“A bright, young, enthusiastic newcomer bristling with recent knowledge and techniques accepting an influx of their clients with all kinds of undiagnosed endocrinopathies was about as welcome as a turd in a swimming pool; whenever they got the chance the boot would come out, the chance to point a disgruntled client in the direction of the RCVS was not missed. So you sat there with your tin hat on.

“These days, all those grumpy, bitchy old men have gone, those practices have been sold to CVS who employ people in blue T-shirts with dental makeovers running their practices their way (within the corporate framework of course).

“So the advertising and selling creates a much more fluid and mobile clientele; they are also much more accustomed to shopping around with the widespread appearance of OOH service providers. Like them or not, and after vetsnowgates I do not, it does improve the quality of people’s home lives a lot.

“There were few things worse than leaving the cinema or a meal out or visitors to fend for themselves because of a call-out. This was particularly irksome and unreasonable when busy and single-handed.

“There was also always the worry about making a genuine mistake when tired and exhausted, combined with a feeling that in the 90s and beyond the RCVS and the great and good who sat there had a very dim view of one-man-bands and were at times it appeared out to get them in favour of more structured organisations.

“In fact, my one-man practice was very admired by all the temporary assistants and locums who worked there for the level of equipment and facilities on offer, and generally respected within a 20-mile radius for those investment reasons.

“I have been contacted by several young people over this JVP business and suggested that they find the money to set up on their own if at all possible. It works well for some (the JVP thing) and a few grow into good quality 2-4 vet practices, but there is always this percentage off the top line which means you’re a hamster on a treadmill that has to travel a bit faster just to stay where you are.

Time to catch up

“If I have a quiet day or gap (does not happen much) I can just catch up on my CPD reading, projects, think about new strategies for the future year, etc. Or just take the dogs for a walk. The JVP thing, like the CVS targets, create a culture of marketing and selling: practice becomes a business with a vocation loosely attached to it when really for me it’s always been the other way around.

“Having owned a practice for 25 years, I have never had to really worry about money since I started, it’s never been a raison d’etre. The thought of some kid in a 3 series BMW popping in once a week inviting me to sell more Milbemax and Advocate with my vaccines, whether they actually need it or not, is not something likely to sit well.

“There is also the problem of the JVP exit strategy: if it’s not working, pressure mounts, and no one wants to buy a three-legged horse. You’re in for 250k, you lose your house, family, etc., and have to start again with zero. I know a few nice people now working their lives out as assistants, in their 30s unable to get a mortgage because of a JVP failure.

“My most profitable business model was a busy single-handed situation turning over 600k per year making 150- 180k pa, but that is a terrible tax bill and silly not to employ more people – after all, as my father always told me, usually on his way to the local pub, ‘There are no pockets in shrouds son.’ “After the first few years I earned at least 70-80k per year my whole working life, without a gargoyle on my back and in my ear forcing me to charge more for less. That is probably modest by some standards but enough to have an ok life on.

Justifying ourselves to the bean counters

“The extra mouth at the table inevitably reduces investment in CPD training and equipment. I regularly meet people having to justify the purchase of tonopens and slit-lamps to men in suits who do nothing but count beans all day.

“It’s being able to be as good as you can be, knowing that you’re going to earn a living as a result of that, rather than being average and trying to squeeze that for as much as you can because the turnover monkey is whispering in your ear about the bottom line. Whether the public perceive this is not clear. I think some of the smart ones do and make a point of finding out who owns the practice before they register.

“How does all this fit into the projected model of increased parttime female vets wanting family life and limited or no out-of-hours commitment?

“Well, not sure really. Sole charge private practice is always going to be harder than just a job, even the lead vet role we often see advertised detaches the individual from business decisionmaking and hiring and firing.

“Perhaps the expansion of UK schools and importation of graduates has possibly lowered the calibre of new graduate who now is just happy to be employed with the earnings of an ALDI employee?

Downward pressure

“Increasing numbers inevitably has a downward pressure on salaries, giving employers more choice over the kind of person they wish to engage. To anyone who sat their A levels in the 1970s and 80s it’s pretty obvious that AAB or AAA grades are not what they were, and there are 3.5 times as many places available as in 1980.

“This means we are getting qualified MsRCVS who would not have been considered good enough to get a place 30 years ago. This may partially explain why they do not get offered partnerships in the remaining private practices and are left to plod on as employees or take the JVP route.

“I was, I think, lucky to have graduated in 1985, moved about a bit in mixed practice, bought a threebedroomed semi for £27,000 in 1987 with a 100% mortgage, then sold it 18 months later for £57,000, which gave me £20,000 as a small deposit on my current premises and enough to kit it out with some basics to get the ball rolling. Not sure if you could do that today!

“Made 12k in my first year, 35k in the second; not sure if it would be possible to survive those first two years these days without the instant advertising and client base generated by the Vets4Pets model.

“Maybe the kind of people the profession attracts are different, less single-minded, lacking grit, a cup half empty rather than half full attitude. Maybe the education system overinflates their expectations?

“I have a feeling that the corporate model suits the kind of employees the university system has started to produce and we are over the next 30 years slowly going to evolve into a profession of part-time, mainly female employees with professional high-earning partners. With any luck I will be well out of it by then.”

So that’s one opinion and pretty down on some other means of running practices. I find that last idea intriguing and one I have never considered before: I have a feeling that the corporate model suits the kind of employees the university system has started to produce. Chicken or egg anyone?

Stay tuned for other opinions and no doubt a riposte to some of DfS’s opinions in upcoming editions of this column.