Who among us pet owners hasn’t nearly screamed in shock and horror when seeing a veterinary bill lately? You’re not imagining it — the cost of veterinary services has gone up in recent years . And one big reason behind the soaring prices is the often-demonized private equity industry. But fear not — Senator Elizabeth Warren is on it.
Last week the senator from Massachusetts and her Connecticut counterpart, Senator Richard Blumenthal, sent a stern letter to JAB Holding Co., a German private equity conglomerate, that raised concerns about its role, and impact, in the rapid consolidation of veterinary care practices in the United States. “In recent years, private equity firms — including JAB Holding Company — have spent billions on buying up veterinary practices and then profiteering while reducing quality of care, increasing prices for pet owners, and making working conditions even harder for veterinarians,” the senators wrote .
“[C]orporate consolidation of veterinary care and an accompanying rise in prices represents a major issue for American consumers and a life and death issue for their pets.” Their action is a much-needed first step to increase oversight of private equity, an industry that typically operates with little transparency, and its relatively new incursion in the veterinary care sector, a fragmented space where small and independent practices are the norm. Advertisement That’s been changing.
Roughly 30 percent of veterinary clinics in the United States were owned by private equity firms as of May, according to a Fortune article . This has had a significant impact on market dynamics. Here’s how much: The price for veterinarian services soared 65 percent in the past 10 years, whereas prices of general consumer goods went up half of that, or 33 percent .
And it adds up. The lifetime cost of pet health care can range from $20,000 to $55,000 for dogs and $15,000 to $45,000 for cats, according to a study from Synchrony , a financial company that offers a credit card to finance health care-related costs, including pet care. The report also found that Massachusetts ranked as the third most expensive state in average vet visit costs ($85).
Advertisement A vet technician from Plymouth with 30 years of experience told me that quite a few vet clinics in her area have been bought by corporations. “It’s pretty worrisome,” she said of the private equity buying spree in the vet business sector. “If I wasn’t working at a [small, private] practice, I don’t know where I’d go.
” The sector “has changed so much” and not for better, she said. JAB owns more than 1,100 vet clinics in the United States in addition to pet insurance brands. JAB also has investments in Panera , Krispy Kreme, and Coty , the beauty and fashion conglomerate that partially owns brands like Kylie Cosmetics, Burberry, and Marc Jacobs.
The Federal Trade Commission has already taken notice of JAB’s worrisome practices in the vet services industry; it has twice ordered the conglomerate to divest some acquisitions in concentrated regional markets and to seek prior approval on future purchases in certain areas for 10 years. The company signed a consent agreement but denied any wrongdoing . To be sure, the explosion of costs and consolidation of the vet industry doesn’t all fall on private equity.
Consumers also need to do their part by educating themselves more on the risks they take when they spend thousands of dollars buying designer breeds with known health issues or from questionable breeders, which can lead to a lifetime of vet care expenses. Also, corporate America owns roughly 19 percent of the pet clinic market, according to a 2023 KPMG report . For instance, Mars Inc.
, a privately owned company that makes candy products like Skittles, Snickers, and Dove, is also one of the biggest vet service providers with pet food brands like Royal Canin and Whiskers in its portfolio and hundreds of vet clinics across the United States under the names of VCA Animal Hospitals, BluePearl, and Banfield Pet Hospital. Who knew? Advertisement The aggressive entry of private equity into pet health care isn’t just a consumer protection issue — it’s also a labor issue . Some veterinarians and technicians in private equity-bought practices are being pressured to generate more business.
“It becomes an environment for them to be kind of cutthroat because they’re trying to make a commission,” the Plymouth vet tech told me in regard to a nearby vet business that was bought by a private equity-backed hospital. “Their doctors and staff are probably instructed to sell as much as they can.” Indeed, a vet from Virginia told The New York Times that she was required to see 21 animals a day , which apparently was a half-dozen more patients than her workload.
We’ve seen this movie before. As the Steward Health Care System crisis has clearly shown, private equity can be pernicious and downright dangerous — and sometimes beyond the reach of regulators and crusading politicians like Warren. But it’s only sensible to sound the alarm early and force operators to reveal their practices to the increasingly burdened pet owner community.
Marcela García is a Globe columnist. She can be reached at marcela.garcia@globe.
com . Follow her on X @marcela_elisa and on Instagram @marcela_elisa ..
