Simply getting along with low-cost veterinary clinics isn't the only issue
Expansion of preventive services hurt full-service clinics in surrounding areas.
With great personal interest, I read the November dvm360 Leadership Challenge: Working with shelters. After 40 years of practice, I don't feel it's an overstatement to say I now regard these 501(c)s to be the greatest single threat to the future of private practice for several reasons-some of which I address here.
If this were simply a matter of learning to “collaborate” with shelters or rescue groups, I don't feel that 501s would be a problem. The problem, however, is far more pervasive than your November issue describes and I would consider myself fortunate if only a shelter (or two) were involved. Allow me to explain.
Almost 10 years ago, a nonprofit was established in my hometown, which has a population of 120,000, to “provide affordable preventive care for pets owned by the less affluent.” A small strip-center lease clinic opened that was not associated with any shelter or rescue group and offered no adoption or foster services whatsoever. It was only about capturing high-volume, high-net preventive services (low-hanging fruit) under an altruistic 501(c)3 banner with catchy, compassionate slogans.
The reality was that pets were in by 9 a.m., out by 4 p.m., with no overnight stays or spays over 60 pounds or 8 years old allowed. “Don't bother us with infected ears-we have 50 spays to do.” Initially, services were limited to spays, neuters and primary vaccines for those with restricted incomes. (Still no problem, and I might add that I haven't lost any sleep fretting over “cheap spays or neuters.”) Over time, however, services were expanded to annual boosters, dentistry, heartworm prevention and treatment, and other elective procedures, including declawing of cats. And as your story mentioned, many of these patients arrived riding in the front seat of a Mercedes.
As I write today, after 10 years, this “nonprofit” clinic is now the largest veterinary employer in town with 28 full-time employees. Its (non-DVM) executive director has reported annual personal income in excess of $400,000 solely from this operation, which has since opened satellites in several nearby cities and towns-all tax-free. Guidestar, which reports on U.S. nonprofits, indicates that the top three spay-neuter surgeons this clinic employs received 2014 incomes in the $170,000 to $190,000 range.
Everyone is painfully aware of social media and the “poison pill” described in the dvm360 coverage. I have privately discussed this situation with veterinary consultants and their only suggestion is to open a competing nonprofit sponsored by local veterinarians with meaningful benefits beyond cost for pet owners, like actual emergency medical assistance funding, for example. I've also filed Form 13909 with the IRS challenging the 501(c) status of this group-without resolution thus far-and also discussed this matter with state licensing board officials as my state veterinary association. All express “deep concern” but have been otherwise powerless to help. We realize this is almost a no-win situation for traditional full-service clinics.
If this were just a matter of leveling the playing field tax-wise, it would be bad enough, but there are even greater consequences on the near horizon for pet owners as well as full-service DVMs. How so? It's well-known, if not openly discussed, that higher profit margins realized by traditional clinics for preventive care in past decades have (silently) subsidized the fixed costs of providing full-service care. Seldom do pet owners, even if well-insured, pay the true costs of full-time staffing or overhead to set a fracture or handle a pyometra. Without reasonable traffic in preventive care, many traditional clinics will face a choice of either closing their doors or raising fees to necessary levels to fully fund treatment and diagnostics. But that only risks further damage to the false perception of us as “greedy” vets. Already our established clinic can go days without seeing a healthy pet, and a reduced caseload of the seriously ill and aged only creates further stress on team morale and practice owners struggling to make payroll. I honestly don't know where this all ends, but it's an unsustainable situation as it now exists.
In closing, I just felt compelled to say thanks for your coverage exposing this situation and the opportunity to comment. I only hope this matter will remain in focus with dvm360 and future discussions will continue for the good traditional practices and pet owners as well.
David Zoltner, DVM