A few days ago, I posted about how the Mars candy and food company was now the largest owner of veterinary services in the U.S. (Is Your Vet Owned by a Candy Company?).
Today comes word that Mars (headquartered just two miles from my house) has expanded its entry into the veterinary care world, with the purchase of the second largest veterinary health service provider in the U.S. -- VCA -- for $9.1 billion. From the press release:
Mars, Incorporated and VCA Inc. (NASDAQ: WOOF) today announced that they have entered an agreement under which Mars will acquire all of the outstanding shares of VCA for $93 per share, or a total value of approximately $9.1 billion including $1.4 billion in outstanding debt. The transaction price represents a premium of approximately 41 percent over VCA's 30-day volume weighted average price on January 6, 2017, and a premium of approximately 31 percent over VCA's closing price on January 6, 2017. The agreement has been unanimously approved by the boards of directors of both companies.
VCA joins Mars Petcare, one of the world's leading pet care providers. Pet care has been an important part of Mars for over 80 years. The transaction reaffirms Mars' commitment to the pet care industry and the veterinary profession, and once completed will help drive Mars Petcare's purpose to create A Better World for Pets. Mars Petcare's portfolio of Veterinary Services businesses includes BANFIELD® Pet Hospital, BLUEPEARL® and PET PARTNERS™. Together with VCA, these businesses will provide an unprecedented level of access to high quality veterinary care for pets, from wellness and prevention to primary, emergency and specialty care. Mars Petcare is already an industry leader in pet nutrition with global brands that include ROYAL CANIN®, PEDIGREE® and WHISKAS®. Mars has a growing business in pet DNA testing through the WISDOM PANEL®, and in 2015 also acquired pet technology provider WHISTLE.
What's this mean for pet care? Consolidation in the health care arena always means more pressure to engage in fraud through upcoding, price-gouging, bill-padding, and medically unnecessary goods and services. The patient (human, canine, or feline), takes a back seat to the bottom line, and procedure manuals are written to maximize revenue by cutting actual services while increasing the costs and number of billed activities.
The pressure of Wall Street (NASDAQ: WOOF) will drive up prices across the veterinary sphere, while also lowering the confidence people will have about the quality of care and information they are getting from their own veterinarians.
The parallel here is with human health care, where the rise of industrialized medicine driven by doctor kickbacks, off-label marketing, bill-padding, upcoding, and price-gouging is king. The difference; unlike in human health care, there are no federal rules prohibiting such activity for dogs and cats, and because the damages are small (because dogs and cats are simple property), there will be almost no legal representation for consumers given the hind leg.
From: Terrierman's Daily Dose