Applying the Cooperative Model to Veterinary Medicine: A Case Study of a Shared Imaging Center

Abstract

Consolidation in the veterinary industry, combined with rising levels of veterinary student debt and stagnant incomes, is making it more and more difficult for small and independent veterinarians to remain competitive. These veterinarians are increasingly in need of business strategies to help them reduce costs and improve profitability. The cooperative model has a rich history of enabling relatively small market players to collaborate and gain efficiencies or reduce costs, but little research has been conducted with regard to applying the cooperative model to assist veterinarians. The primary objective of this research was to educate veterinarians regarding collaborative equipment cost-sharing efforts, which could increase the profitability of their respective businesses. A user-friendly, downloadable, spreadsheet template was created to analyze the feasibility of a veterinary imaging center, both as a cooperative and as an investment for a single veterinary practice. Construction and equipment costs, as well as imaging service charges, costs, and volumes were estimated in order to create a hypothetical case study comparing the returns of an individually-owned veterinary imaging center to a four-veterinarian imaging cooperative. If demand is supportive of the additional imaging service volumes needed to sustain four veterinarians, a veterinary imaging cooperative appears to be a more profitable investment opportunity compared to an imaging center owned by an individual veterinarian. Providing substantially more services with only a slightly larger investment in facilities in equipment makes the cooperative imaging center more profitable. The spreadsheet template created for this study can be modified to fit a variety of veterinary issues, or can even be applied beyond the scope of the veterinary industry.