COVID-19 Pet Boom Puts Spotlight on Veterinary Investment Opportunities
More than 23 million American households — nearly 1 in 5 nationwide — adopted a pet during the COVID-19 pandemic, according to the American Society for the Prevention of Cruelty to Animals (ASPCA). The increasing rates of pet ownership triggered a soar in demand in the veterinary sector, and private equity and other investors took notice.
While consolidation in the veterinary industry is not a new trend, the majority of veterinary clinics around the country continue to be smaller operators or sole proprietorships. These “mom and pop” shops, with a handful of employees, are often ripe targets for consolidation, but such practices are also likely to have fewer resources and inconsistent processes for regulatory compliance. And while the veterinary space is certainly less regulated than “human” healthcare, investors in the veterinary sector should be alert to the key compliance risk areas for this sector.
Most stakeholders are aware of the nuances of state-specific regulation of the corporate practice of veterinary medicine doctrine, but the regulation of veterinary practice in most states is not limited to the state Board of Veterinary Medicine. The practice of veterinary medicine has moved far beyond the days of James Herriot in All Creatures Great and Small, who came armed with a stethoscope and maybe a sturdy rope. Like “human” healthcare facilities, many veterinary clinics are now equipped with sophisticated diagnostic equipment and veterinary care incorporates more complex treatment modalities, which may subject the facility to additional state regulatory requirements. For instance, the use of x-ray or other radiation-producing machines or the production of biomedical waste or hazardous waste often requires compliance with a myriad of regulations, which may include registration, permitting, or regulatory inspections.
In addition, as prescribers or dispensers of prescription drugs and controlled substances, veterinary facilities must also ensure compliance with not only federal Drug Enforcement Agency requirements, but also any state-specific laws and registry and reporting requirements that may apply. Navigating such requirements become more complex as veterinary practices expand and grow, employing more than one veterinarian or using ancillary staff, such as veterinary technicians, to provide support. Facility practices and policies should take into consideration the applicable state licensure or certification requirements for non-veterinarian staff, including the permissible scope of work and supervision requirements.
Like all healthcare providers, veterinary clinic owners and their stakeholders should keep an eye towards future treatment trends and their regulatory implications. During the early days of the COVID pandemic, several states loosened telemedicine requirements in the veterinary space and some states continue to permit telemedicine practice to this day. However, as concerns about the pandemic wane and regulatory enforcement return to “normal,” state agencies are likely to re-visit the role that remote visits may play in the veterinary sector. Veterinary clinics and their investors should be regularly checking on changes in pandemic era guidance or policies related to telemedicine in order to avoid running afoul of restrictions on unlicensed practice of medicine across state lines.
For more information about the regulation of veterinary practice, please contact Lanchi Bombalier or Kara Silverman.
- Lanchi Nguyen Bombalier
- Kara Gordon Silverman