VPP Featured in VPN: Rethinking the Path to Ownership

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Rethinking the Path to Ownership

“The future of veterinary medicine is simply brighter and more secure if veterinarians own a piece of their own profession – and that means clinical practices.” As Dr. Doug Aspros, himself a former practice owner, AVMA President and current Chief Veterinary Officer of Veterinary Practice Partners, sees it, the profession is at an important inflection point.

“Corporate consolidation has continued to accelerate, reflecting the confidence of non-veterinarians in the opportunities in companion animal practice. Many younger doctors, carrying a heavy educational debt load, see the only road to a comfortable retirement running through specialty certification. While nearly everything about small animal practice has changed for this generation of doctors, one thing hasn’t: the value of practice ownership in building wealth in your career.”

In an era of rapid corporate consolidation, Dr. Aspros’ fear is that the window of opportunity will close on many veterinarians before they realize it. “In 2019, over 750 practices were purchased by corporate groups. 99% of those practices will never be owned by practicing veterinarians again. If the associates at those practices ever want to have a chance to become owners, ever want to build wealth for themselves and their families, they will have to do it elsewhere.” This view of the industry played no small part in his decision to join Veterinary Practice Partners back in 2015, and later to sell a portion of one of his practices, Pound Ridge Veterinary Center, to the company in 2017. “One of the company’s core values is ‘ensuring veterinary ownership in a changing market’. That is pretty unique in our industry.”

Co-owners and partners

Since its founding in 2011, VPP has consistently done things differently than most. Unlike many others, the company resists owning 100 percent of any practice, preferring instead to co-own with a veterinarian at each of its locations. According to the company’s website, 27 of its veterinarian partners never even owned a piece of a practice prior to VPP’s involvement, something Rich Lester, the company’s founder, is incredibly proud of. “For many associates, the prospect of buying into their practice is overwhelming. We’ve made it easy for the next generation at our locations to become owners of large, high-quality practices; something that would be economically prohibitive on their own.”

That vision manifested itself most uniquely earlier this year when one of the company’s practices flipped from completely company-owned to co-owned with a veterinarian. “In 2017, we purchased 100 percent of Tranquility Veterinary Clinic from its prior owner, with the intent to ultimately co-own it with a practicing veterinarian,” remarked Lester. “Ryan Christensen, DVM, was our medical director from day one, and this year, things fell into place such that he was able to join us as a co-owner in the clinic. We have every confidence Tranquility is now better positioned going forward, and in instances where we find ourselves completely owning a practice in the future, believe this serves as an excellent model for supporting our mission of veterinary ownership.”

Over time, the company acknowledges it will be faced with more and more opportunities to succession plan as its original doctor partners slow down and ready for retirement. While we don’t like to own practices outright, we’re not afraid to either. Each time we have one partner thinking about hanging up the stethoscope, it is just another opportunity to bring a younger doctor in as an owner. That’s the kind of opportunity we get really excited to celebrate as a company.” He added that VPP has a variety of tools for making the purchase of an ownership stake more affordable for doctors too, particularly in the frothy market of practice acquisitions where purchase multiples have increased steadily in recent years. “We can make any situation affordable for an aspiring owner. That’s how committed we are to supporting the profession and the futures of the veterinarians we work with.”

Taking the leap

“We’re approached every day by associates who would like to partner with VPP in buying out the current owner of the practice where they currently work. More and more, though, we’re talking to entrepreneurial doctors who have an idea for starting a completely new practice and want a partner to help turn that concept into reality. Capital is just one piece of the equation. Banks can offer that. We can offer that plus the operational, marketing, technology and strategic support to grow a practice rapidly into the black.”

To date, VPP has opened a handful of brand-new practices alongside younger doctors, with the intent to open many more in the coming years. “Hanging your own shingle out and starting a practice is how many boomer practice owners did it,” remarked Aspros, “but that is really daunting for a lot of veterinarians to do these days – business is so much more complex today. We’ve invested heavily in resources that can identify underserved neighborhoods and can accelerate the success of a new hospital.  As a skilled partner, VPP makes the process of starting a new practice less stressful and overwhelming, and easier for for the current generation of clinicians to take the risk.”

Both Lester and Aspros concur that the future remains bright for today’s general practitioner. “We meet extraordinary doctors all the time,” Lester observes. “Most of them have the capability to grow and lead really successful practices if given the opportunity. VPP wants to invest not in veterinary practices, but in the people who make veterinary practices great. It’s a really important distinction that too many in our industry don’t appreciate.” Advises Dr. Aspros, “my advice to all of the associates out there is simple: being a veterinarian in clinical practice is an awesome career. You know that; it’s why we make the educational investment in ourselves and go in to practice. Helping owners and providing care to their pets is so personally rewarding. However, being a practice owner adds a whole other level of professional fulfillment. It takes courage to take the leap, but it is well worth the risk.”

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