Warum sind Tierarztrechnungen so teuer, und wem gehört Ihre Tierarztpraxis wirklich?

The biggest owner of veterinary hospitals in America is a candy company. Mars — the maker of M&M's and Snickers — runs more than two thousand animal hospitals across North America, and about three thousand worldwide. Over the decade from twenty fourteen to twenty twenty-four, U.S. vet prices rose about sixty-two percent — nearly twice as fast as prices overall. And most pet owners have no idea who owns their vet. When Britain's competition regulator finally checked, fewer than half of the people using a big chain even knew their practice belonged to one. It also found prices at five of the biggest groups running about eighteen percent higher than at independent vets. So who's really behind the clinic where you take your dog — and why does the bill keep growing? Let's follow the money.

Here's how vet care is supposed to work. For most of the last century, the local vet was a small business owned by the vet — one clinic, one name on the door, maybe two or three doctors. And it's an unusual kind of market. Pet owners rarely compare prices. Routine visits — vaccines, checkups — go to whoever you saw last time. The rest are emergencies, where nobody shops at all. Most bills are paid by the owner, on the spot. And the business recommending the treatment is usually the same business selling it — the exam, the bloodwork, the medicine, sometimes the food. To an investor, that looks like a very attractive business: loyal customers, steady demand, and very little price competition. So the investors showed up.

Start with the candy company. Mars is family-owned and best known for chocolate. But it's also one of the biggest pet companies on Earth: Pedigree, Whiskas, Royal Canin and Iams are all Mars brands. In two thousand seven, Mars acquired Banfield, the chain that runs many of its roughly one thousand clinics inside PetSmart stores. It added BluePearl, a network of specialty and emergency hospitals. Then, in twenty seventeen, it paid nine point one billion dollars for VCA, one of the largest animal hospital chains in the country. The Federal Trade Commission let the deal go through — after Mars agreed to sell twelve specialty and emergency clinics in ten local markets. Mars also owns Antech, a veterinary lab business, and hospital chains in Europe and Asia — including Linnaeus in Britain, which comes back later in this story. All together, Mars runs about three thousand vet clinics and hospitals worldwide. So the same company can make your dog's food, run your dog's hospital, and process your dog's blood test.

The second buyer may sound familiar. In our very first episode, we met JAB Holding — the European investment firm that bought up Panera, Peet's and Caribou Coffee. In twenty nineteen, JAB bought National Veterinary Associates, a chain of more than six hundred seventy animal hospitals. Three years later, it agreed to pay one point one billion dollars for SAGE, a group of specialty and emergency clinics. This time, the FTC set tougher conditions: JAB had to sell six clinics, and for ten years it needs the FTC's approval before buying another specialty or emergency clinic within twenty-five miles of one it already owns in California or Texas. The head of the FTC's competition bureau said it plainly: "Private equity firms increasingly engage in roll up strategies." In twenty twenty-four, Senators Elizabeth Warren and Richard Blumenthal wrote to JAB about vet consolidation — and about JAB owning pet insurance companies too. In its reply, JAB said NVA runs fewer than four percent of America's vet hospitals.

Mars and JAB are the biggest names, but they're not alone. Over the past decade, private-equity firms and corporate chains have bought thousands of independent practices. Nobody publishes an official count, so estimates vary. About a decade ago, corporations owned less than ten percent of U.S. vet practices. Today, estimates run from about a quarter to nearly half. In specialty and emergency care — cancer treatment, cardiology, the twenty-four-hour hospital you rush to at midnight — the corporate share is often put at around three quarters. And just like the funeral homes in our last episode, the clinic often keeps its old name. The sign out front says the same thing it always did. What changes is who sets the prices — and where the profit goes.

Now, the bill. The Bureau of Labor Statistics tracks the price of veterinary services as part of the consumer price index. From twenty fourteen to twenty twenty-four, that index rose about sixty-two percent. Prices overall rose about thirty-two and a half percent over the same years. In twenty twenty-three alone, vet prices jumped more than nine percent. To be fair, consolidation isn't the only force at work. Pet medicine has become far more advanced — imaging, specialists, cancer treatment — and that costs money. Clinics say their own costs have climbed too: JAB told the Senate its major suppliers' list prices had risen about nineteen percent since twenty twenty-one. So in America, it's hard to say exactly how much of the increase comes from who owns the clinic. Which is why what happened in Britain matters.

In twenty twenty-three, Britain's Competition and Markets Authority opened an investigation into the vet market. It took two and a half years. Here's what it found. Between twenty sixteen and twenty twenty-three, average vet prices in the U.K. rose sixty-three percent — against thirty-two percent general inflation. Six large groups now own about sixty percent of British vet practices. In twenty thirteen, large groups owned just ten percent. Three of the six are owned by private-equity investors. One, Linnaeus, is owned by Mars. Prices at five of the big groups were, on average, eighteen point three percent higher than at independent practices. For at least three of them, buying a practice led to average prices about nine percent higher, four years on. Better equipment and rising costs explained part of the increase — but, in the regulator's words, not "the full extent" of it. And fewer than half of the people using a big chain knew their vet was part of one.

So Britain acted. Under rules finalized this year, vet practices there will have to publish price lists for standard services, show on their signs and websites whether they're independent or part of a group, give a written estimate for any non-emergency treatment expected to cost five hundred pounds or more, and tell owners they can get a written prescription and buy the medicine elsewhere — with the prescription fee capped at twenty-one pounds. In the U.S., there's been nothing comparable at the national level so far. The FTC reviews big deals one at a time, as it did with Mars and with JAB. So who comes out ahead? The buyers — a candy company, a coffee-and-bakery investor, and a long list of private-equity firms — who found a business where customers rarely compare prices. Who pays? Pet owners, often in their most stressful moment, often without knowing whose clinic they're standing in. So ask who owns your vet. Ask for a written estimate before any big treatment. Ask for a written prescription, and compare the price online. And for anything that isn't an emergency, it's okay to call a second clinic.

Next time on Margin, we follow the money somewhere you spend it every week without a second thought. If you want to understand how money actually moves before the headlines catch up, subscribe — and follow the money.