{"id":2509,"date":"2018-04-01T00:00:51","date_gmt":"2018-04-01T07:00:51","guid":{"rendered":"http:\/\/phosdev.com\/todaysveterinarybusiness\/?p=2509"},"modified":"2022-03-10T18:26:11","modified_gmt":"2022-03-10T18:26:11","slug":"the-goldilocks-concept","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/the-goldilocks-concept\/","title":{"rendered":"The Goldilocks concept"},"content":{"rendered":"

Independent practices \u2014 mom and pops \u2014 have been the backbone of our profession for generations. They\u2019re our industry\u2019s baseball and apple pie. While we all know independent owners to be passionate, engaged in the community and superb health care providers, they also are notorious for being less-than-optimal business managers.<\/p>\n

Corporate practices have sought to right this inherent flaw in an independent practice\u2019s system. Since their widespread implementation, they\u2019ve brought changes to our profession as a whole \u2014 some great, some not so great. Corporates have introduced investment money, business expertise and good intentions, among other things, but they struggle to understand our intimate relationship-driven health care profession.<\/p>\n

Our \u201cjust right\u201d lies somewhere in between.<\/p>\n

(Full disclosure: I own independent practices and currently work in a corporate practice. I admire, value and respect both.)<\/em><\/p>\n

Too Cold: The Corporate Model<\/h3>\n

Famously, corporations have invested, and continue to invest, tremendously in our profession. Investments in business expertise, technology, efficiencies, benefits, equipment, new career opportunities, training, increased compensation and wellness promotion are the tip of the iceberg. Corporates were among the first to offer a full suite of benefits to employees, the first to embrace preventive care, promote wellness plans, drive pet insurance, sponsor internships and residencies. All in, they have improved, and will continue to improve, our profession in many areas.<\/p>\n

That said, there\u2019s something magical about independent veterinary ownership<\/a>: the veterinary perspective in daily decision making that is lost in the corporate model<\/a>.<\/p>\n

To explain, I\u2019ll employ a military analogy. The corporates view our profession like an army general views soldiers. In this analogy, the veterinarians are the soldiers taking orders. Corporate leaders \u2014 the generals \u2014 lead their soldiers in a one-sided manner. This model served corporations well when their product was produced by hourly line workers, but it doesn\u2019t work when your product is complex health care services provided by highly educated medical professionals.<\/p>\n

The model could work with a subtle shift in the corporate paradigm. What they don\u2019t get is this: They\u2019re not leading the army, they\u2019re leading the air force. In the air force model, generals lead a sophisticated multidimensional operation delivered by a highly trained officer corps (aka pilots\/veterinarians) as opposed to order-abiding soldiers. In this analogy, the corporate generals need only to clean the bugs off the windshield, fuel the jet and get out of the way. Corporates need to understand that they are in the air force, not the army.<\/p>\n

Corporate consolidation is well underway. It\u2019s a natural economic response to a very successful and fragmented industry. It\u2019s also a response to demographic forces in which thousands of aging veterinarians are realizing the time is now to exit their practices, only to find that their associate veterinarians are not interested in buying the practice. Corporates are driving practice valuations and supporting many a retiring veterinarian.<\/p>\n

Consolidation cycles typically take place over 10-year periods. When the dust settles, I predict that much like our colleagues in dentistry, we\u2019ll have a good mix of independents and corporates.<\/p>\n

Independent practice owners will not disappear. The veterinary profession won\u2019t go the way of pharmacists and optometrists, who are almost entirely corporatized. Theirs is a commodity-driven business, while dentistry and veterinary medicine are service-driven professions. I suspect the veterinary profession will wind up somewhere near 50:50 between independents and corporates. Independent entrepreneurial veterinary ownership isn\u2019t going away, nor should it. Neither is corporate ownership. I see a bright future for both.<\/p>\n

Too Hot: Independent Model<\/h3>\n

Independents are native speakers. We understand our profession at a visceral\/emotional level. Many independent owners, like myself, are baby boomers. We grew up wanting to own a practice. We\u2019re now nearing the end of our career runway and need to sell our practice. Much to our surprise, subsequent generations are not nearly as interested in practice ownership as our generation was. In cases where associates do have interest and are creditworthy, they\u2019re often outbid by the corporates.<\/p>\n

A passion for medicine brought us to practice ownership. Few of us came to this profession with a desire to read P & L\u2019s, write employee manuals or complete OSHA audits. As a result, we\u2019ve built quality practices that provide superior health care but are often notably lacking in business skill. Independents need only couple their passion for medicine with an understanding of business management, hire business expertise, or delegate to someone who is talented and passionate about business.<\/p>\n

Just Right: The Hybrid Model<\/h3>\n

The challenge is combining the best of both worlds. How can we combine the passion, pride of ownership, veterinary mindset, quality medicine and community connection that independent veterinary practices are known for with the best that corporates bring to our profession?<\/p>\n

A hybrid model, in which we have expert veterinary leadership coupled with great business acumen, leverages the best of both worlds. These models do exist, and more are emerging. I\u2019m aware of many independent practices that have figured it out, as well as several growing corporate consolidators that \u201cget it.\u201d These Goldilocks models are, and will continue to be, a progressive force in our profession. It\u2019s what my WellHaven Pet Health practice family aspires to.<\/p>\n

This requires doctors to become high-level business leaders. Some colleagues find the business of veterinary medicine intimidating, but I would challenge us to aspire to medical and business leadership roles. We need to become fluent in business, just as we did in biochemistry and physiology. The business skills are not very difficult considering that we mastered organic chemistry and physics.<\/p>\n

Business leaders cannot easily become veterinarians, but veterinarians can become business people. I look forward to the day when both independent and corporate hospitals are led by empowered, business-savvy veterinarians.<\/p>\n

After all, we\u2019re veterinarians. Who\u2019s better equipped to treat Goldilocks\u2019 hyperthermic and hypothermic bears?<\/p>\n","protected":false},"excerpt":{"rendered":"

Corporate consolidation is well underway.<\/p>\n","protected":false},"author":40,"featured_media":2510,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[339],"tags":[],"class_list":["post-2509","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-april-may-2018","column-creative-disruption","clinical_topics-practice-ownership"],"acf":{"hide_sidebar":false,"hide_sidebar_ad":false,"hide_all_ads":false},"yoast_head":"\nThe Goldilocks concept | Today's Veterinary Business<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Goldilocks concept\" \/>\n<meta property=\"og:description\" content=\"Corporate 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