Almost five years ago the Big 6 project broke new ground with a series of hard-hitting articles focused on the six core dynamics shaping the veterinary profession at that time.

Now, Big 6 is back, with a series of in-depth features and long-form podcasts to bring Vet Times readers exclusive insights and analysis about the dynamics driving the sector today, and in the future…

 

 

 

Sustainable growth

The seismic impact of coronavirus, an unprecedented staffing shortage and the lockdown pet-buying boom have all combined to put veterinary practices across the UK under enormous pressure.

Since the start of 2020, the demand for services from the sector has increased massively; a situation that has become something of a double-edged sword – while revenues have rocketed and provided opportunities for new growth for some practices, others have struggled to meet this demand and clinical teams have found themselves stretched to their limits to cover the extra work.

In such unique circumstances most practices have been forced to either turn away clients or rapidly switch to growth mode, creating a highly combustible economic environment that, according to our Big 6 panel, has left the traditional veterinary business model facing perhaps its sternest test.

Staff ‘being left behind’

Cees Bennett – a former director at CVS, now co-owner of Belvoir Vets in Lincolnshire and an RCVS Practice Standards Scheme assessor – had this to say: “I see a lot of comments on online social media groups and elsewhere of distressed employees saying that they are begging the leadership of their practices to just slow down, to stop registering clients for a minute to let them catch their breath. But that’s not been listened to because growth is attractive.

“So, in some cases, practices are capturing as much client base as possible, but the staff are being left behind on that journey.

“The practices that have thrived through the pandemic are those that have realised where they need to just rein it in a little bit and maybe not be pushing for growth all the time, maybe not go for that next service and just consolidate what they’ve got.”

Echoing Cees’ comments on controlled growth, Lorna Clark – who owns Pinfold Vets in Nottinghamshire, the Petplan Practice of the Year 2022 – added: “There has been an increase in pet ownership, so, therefore, the professions have to grow, but if you want to keep a work-life balance and have a reasonably sized practice which is more manageable and easier to run, and that the staff enjoy working in, then you have to be thinking about how much you want to grow.

“And I think what is really interesting at the moment is the practices that have had to close surgeries are the corporates and part of that is about not controlling growth in the right way.

“As an independent we’ve had controlled growth and we’ve been really lucky we haven’t had to close our books and we’ve managed to take on more vets because we’re an attractive employment prospect.

“With some practices, the trouble has been that they have just aimed for growth and not really thought about the bit in the middle.”

Proportionate

While agreeing that practices must be managed to grow in a sustainable way, the pursuit of “sensible” growth and profits remains essential, according to SPVS board member and veterinary consultant Peter Orpin.

He said: “The key to it is actually making sure it’s proportionate and sustainable – if you pursue profits at the expense of team well-being, that’s absolutely pointless because you don’t have anything left.

“But practices have to achieve sensible profit; without that, they won’t achieve succession in the medium and longer term. So, you can’t set up a model that doesn’t generate profit, in my opinion; growth is essential, but it has to be proportionate and it has to be sustainable.”

XLVets director Andrew Curwen added: “Growth can exist in many dimensions. In a very simplistic level, we have seen an absolute growth in the number of dogs and cats in the country, so, by definition, practices had to grow because there are physically more animals to look after. That’s growth, but is it sustainable growth?

“I think what matters here is the motivation behind the growth. What is the underlying driver for growth? Is it growth for growth’s sake? Is it growth for purpose? Is it about growing and improving the health and welfare of the animals that are being presented to us? It’s about what’s the motivation.

“I would add that growth for growth’s sake is the mantra of American capitalism, but the planet we live on doesn’t work like that – it works in a different way; it works in a regenerative way. And I think regenerative practice would be a much better word to be using than growth practice.”

Purpose

If the newly launched Animor vet group is to be a success then growth will be key to that success, but as founder Patrick Magrath explained, growth cannot be an end in itself.

He said: “I think what’s important is getting back to why we’re doing this as a first principle – growth, it’s not an end in itself, is it? As Andrew was saying, it’s multifaceted.

“What we’re trying to do with our organisation is to focus on that purpose and what are we all here for, and that’s about being here for improving pet health. Businesses that are not purpose driven tend to end up with dissatisfaction, demotivation and not necessarily the best outcomes for clients or, in our case, patients.

“So, we’ve been very keen to create a really strong culture and a joined-up sense of purpose among our people, and we are confident that growth will come, but it is not an end in itself.”

On this point, Lorna added: “On an individual practice level, clients are really wary of growth. Once you start growing as a practice, they start asking questions. So, we’ve worked really hard to maintain the small independent culture and not lose sight of our purpose and in that way the business model works by doing what we do and doing it well.

“I also think so many people are feeling cheesed off because the practices they work for are making absolutely shed loads of money for shareholders and there’s these vets and nurses weeping into their sandwiches in their five-minute lunch break – it shouldn’t be like that.”

Cost of living crisis

However people might pay for their vets in the future, one thing is certain – an increasing number of pet owners are facing an extreme financial squeeze in the face of rampant inflation, driven in large part by soaring food and energy prices.

And while the pet pound is notoriously robust, our panel acknowledged the urgent need for practices to tailor their services to protect animal welfare.

Lorna said: “I think a vast majority of our clients won’t be that badly affected because they will prioritise pet care, but there are other people out there struggling and we can tailor things to make sure that we can accommodate everyone.

“I certainly don’t want to leave anyone not being able to afford to treat their cat or dog. We don’t need to make ourselves charity cases and take a massive hit for the practice, but we can do things to accommodate clients who are on lower incomes.

“So, I think we really have to keep our eye on the ball with these massive price increases we are seeing. It worries me people can’t afford it and pet welfare is going to suffer.”

Tailoring treatments

For Cees and Andrew, it is now more critical than ever to ensure the needs of hard-pressed clients and their pets can be met within the first opinion setting.

Cees said: “I guess, just to make a point that it comes down to in certain cases – it’s about doing a better job by doing well; having a profitable well-run practice, so you can be mindful of perhaps that more vulnerable section of pet owners you cater for who are really going to be struggling. Maybe the majority will find the money, but things are getting expensive and it’s becoming an increasing stretch.

“I think the biggest bit of it is the clinical choices and approach that you make to, say, an amputation; that case may well have been able to be repaired at some £5,000 referral orthopaedic operation, but actually, for the person who’s got less funds, the amputation is a treatment course that is more appropriate for that individual, so I think that’s the joy of the veterinary profession in that we can tailor those approaches to those people.”

First opinion opportunities

And it is not just patients who benefit from this approach, as Andrew explained: “And that’s a really important point. Go back to the top of the call and we were talking about burnout in the profession. Well, one of the things that worries me is that actually, people aren’t getting that opportunity to do those things.

“Everything of any interest is having to be referred away because someone’s told them the existing gold standards. It’s honestly the worst thing that ever happened to this profession.

“There’s so much we can do in first opinion practice and do really well for the benefit of the animals. I’m afraid we really need to look carefully at that.”

The corporate landscape

With well more than half of all UK veterinary practices now in the hands of six large companies – three of which are private equity owned – the recent intervention of the Competition and Markets Authority (CMA) in a series of high-profile acquisition deals gathered a great deal of attention.

However, despite the CMA being potentially poised to kibosh two multimillion-pound deals, our panel did not think this meant more than a decade of relentless consolidation in the veterinary sector might be coming to an end.

Peter said: “I don’t think the CMA decisions regarding VetPartners and CVS will stop the process; I just think the corporate practices are going to be more selective in terms of what practices they work with.

“It is going to have an effect, but I think the whole take-home is that practices have just got to keep their options open really and to do that, they’ve got to go back to their old important planning bit.

“I think any independent practice out there should have a 10 to 15-year plan where they’ve looked very carefully as to how it’s going to have succession if they want to remain independent.”

Cees added: “I don’t think the CMA side of things is going to stop it – that is not to say it might be approaching its ceiling and there is some degree of independent bounceback, but those are separate issues. There’s just a level of how much the barrel is scraped in those practices that are going to make sense for the corporates. Yeah, we may get a slowdown, but I don’t think the CMA thing is going to do it.”

Mergers and acquisitions

In fact, rather than seeing a slowing in the rate of consolidation, Andrew believes the reality may be quite the opposite.

“We’re talking about individual corporates getting bigger and buying independents, but I would be fairly certain that the corporates themselves will start buying each other as well,” he said.

“There are some fairly big investments that are yet to be made. There’s a very nice Harvard Business Review paper that was published about 20 years ago about what happens when a market changes and how it moves through very distinct phases.

“We’re still only in the early stages of stage three. By the time you get to stage four, you’re into the sort of big mergers and acquisitions that we see in the veterinary pharmaceutical industry – the likes of Elanco buying Bayer Animal Health.

“Now, those also go through a CMA process, don’t they? And what happens is that the purchasing company decides which products it wants to keep and which ones it’s going to sell on, so that there’ll be a complete redistribution.

“One of the things that concerns me, though, is about areas of the country, or particular practices, that may not be quite so profitable; may not be quite so sexy, and so what happens to them for veterinary provision.

“But I still think there is plenty of opportunity for independent practices – huge opportunity.”

‘More selective’

Lorna added: “I think it’s a really good time for the independents, but I don’t think [the CMA] will stop the corporates – the corporates will carry on growing; they’ll just be more selective about where and they will go overseas.

“But I don’t think they are a threat to the independents at all, as we can just do things in a different way and I think more and more people will set up on their own because of that.”

Regulation or delegation?

With so much pressure on veterinary teams and increasing expectations of clients, we asked our panel if they felt existing regulation of the profession needed to change with the times.

Reframing regulation to develop and define the role of vet nurses and paraprofessionals were all discussed, but for Cees, it can sometimes be a matter of delegation, rather than regulation.

He said: “I think there are lots of [regulatory] things that we would like to do and I think the protection of the vet nurse title, for example, is one, but RVNs are not being used effectively.

“Is that due to the Veterinary Surgeons Act? Not really. I can see lots of practices that use veterinary nurses absolutely brilliantly. And that’s down to the leadership and management of that practice – not due to some legislation that’s forcing them to do it one way or the other.”

Unintended consequences

Following on from Cees’ comment, Peter again drew on his experience in the farm animal sector to develop the point.

He said: “You can argue that by delegating more, you could lessen the load on the veterinary side. But when I have discussed this with experienced vets before, they were concerned about how we will train up new vets; for instance, if there was widespread delegation, what would the out-of-hours implications be, how would this work, how would that work? So, if we’re all going to go down this route, we have to think of the law of unintended consequences.

“I was across doing some consulting in Canada and the Canadian farm vets were stunned at how we managed our delegation.

“In Canada they have delegated certain tasks to professionals who work within the practice, so they’ve expanded the size of the pie within the veterinary practice, rather than just spawning individual competitive units outside the control of vets. So, I think if we’re going to do this, let’s do it well. Let’s do it so it really delivers a real benefit to the client; real benefit to the animals.”

‘Them and us’

Andrew stressed the point that many veterinary professionals still viewed their regulator with suspicion and that this needs to change if regulation is to evolve in a way that serves the needs of all stakeholders.

“With the RCVS there’s a great sense of, sort of, them and us,” he said. “But we are the people who elect them and yet a huge percentage of the profession does not bother to turn out to vote.

“Professions end up with the leadership they deserve because the professions vote for it. We’re not particularly good at having really honest conversations about what sort of leadership we really want – what do we even need? When was the last time you discussed with a fellow vet, what are the skill sets required to be a really great member of RCVS council?”

OOH narrative change

One of the most common areas of contention is the current obligation under the Veterinary Surgeons Act (1966) for vets to ensure OOH care is provided for all patients under their care.

However, as Cees explained, if there is a widespread desire to remove this obligation, it was not reflected in the latest RCVS council elections.

He said: “I was going to be contentious and say that there were quite a few candidates who were standing on the basis of relaxing the 24/7 OOH obligation. And is it a contentious conclusion to draw that they did not do very well across the board?”

Andrew said: “I’ll probably get shot down in flames for saying this, but I learned most of my good skills as a vet in the first few years in OOH. And often that was because the clients were just delighted to see you; just delighted to see you OOH. And so, they’re immediately cutting you slack.

“And we do seem to be telling ourselves a story these days that OOH is some terrible thing. What’s terrible is working OOH and then making us work the day the next day without a break. That’s terrible. But working OOH can often be really rewarding work, and we just need to change the narrative.”

The vet-led team

One of the cornerstones of modern veterinary care in the UK is the vet-led team, where the veterinary surgeon remains at the centre of delivery – even if a significant amount of delegation exists.

We asked our panel if this model was fit for purpose or whether a more patient-centred delivery system, similar to that seen in some areas of human health care, might be more appropriate.

“The clients will, in the end, go to what they want to go to – to good levels of service – and new opportunities will arise through technology; through evolution,” explained Cees.

“And I’m not sure that we legislate for that appropriately. I don’t think we can predict the future well enough to try to always cover every single base, and something else will arise and change the way that the profession is evolving.

“Should we rely on the clients and that client-led focus that the client chooses the businesses that are going to succeed and fail?”

Andrew added: “I think it’s not our job to have to do it all. But it could be our job to be a partner, a partner in the process, or a partner to the client or a support to the client.

“Actually, I wonder if the role of the professional has changed and we perhaps as a profession need to move away from the story that we tell ourselves, which is that we have got to have all the answers. I think actually our job has changed in the way that we work to support underneath, if you like, the client rather than be seen to be on high.”

‘Regressive model’

Developing this point, Peter added: “Surely, it has to be a team approach, hasn’t it? So, I think the vets are a key part of the process, but they’re not the only thing. So, I think it will be a completely regressive model to say that it’s only vets who can be part of the solution to a progressive veterinary practice in the future.

“We need to have a multidisciplinary approach with all the skills that people bring to the table to cope with the innovation that’s required of the future.”

All our panelists agreed that, whatever changes may be coming down the tracks, a team-centred approach was the best way forward.

Patrick said: “I am coming from the outside, if you like – I’ve been constantly amazed by the frustration there is among the nurses and how vital they are to that team that you’re talking about, and the potential that they have and the desire they have to do more.

“So, our head of nursing frequently does operations, lump removals and things. But there’s just so much more they can do. But it’s as you say – it’s all about the team, isn’t it, and all of those parties supporting that better health outcome for the pet. But yeah, the nurses are very impressive and should have more latitude.”

Teamwork and autonomy

Closing the debate, Lorna added: “I think we’ve got to move it. It’s just a typical that we think we have got to do it all; it’s a team thing. We’re vets; we’re good at what we do, but there are lots of other jobs that we are not so good at – I can’t do half of the stuff that VNs do.

“The future is going to be increasingly patient-centred and that only works by encouraging that teamwork and also giving people some autonomy, helping them build a culture and a good practice for your staff, clients and their animals.”

“It will be a completely regressive model to say that it’s only vets who can be part of the solution to a progressive veterinary practice in the future.”

Peter Orpin

 

Threats and opportunities

By way of a conclusion to this fourth article, we asked all our panellists to provide us with a threat and opportunity rating for both finance and regulation. We’ve taken all our panellists’ responses to produce overall ratings…

Finance

Regulation

Now, we want your opinion

Do you agree with our panellists’ scores? Answer our quick polls below:

Finance

Regulation

 

Vet Times Podcast · Big 6, Part 4