Americans embraced and adopted animal companions during the pandemic, and that increased the need for veterinarians. But the intense demand for animal medicine professionals means vets and their staff are burning out quickly.
Enter IndependentVets, a local company whose new business is staffing veterinary practices. Also known as “IndeVets,” the company says it is growing so quickly — doubling revenue every year since its inception in 2017 — that it’s projecting $30 million in revenue this year.
IndeVets is riding several trends — rising costs and treatments for pets in the US, shortages of trained veterinarians, and continued investment in and buyout activity by private equity and other professional investors in the vet industry.
The Philadelphia-based IndeVets was founded by Michael Raphael, who began his career as a newspaper journalist, and which included The Inquirer from 1993 to 1995. He later enrolled in Temple University’s Fox School of Business, and pursued his degree at night while interning at private equity firm CMS, now Main Line Investment Advisers, in Wynnewood.
After working up to managing partner, Raphael left in 2010 to buy a series of animal hospitals , where he witnessed firsthand America’s quality veterinary staffing shortage.
Vet practices struggle to hire and retain veterinarians, part of a mismatch between empathetic caregivers and a business model that leaves veterinarians with little flexibility or autonomy.
“Veterinarians get into animal medicine to work with animals, but they end up working mostly with staff and pet owners. So over the past few years, vets have come under tremendous stress,” Raphael said. “It comes down to scheduling, autonomy, and support. Vets are on islands, they don’t have support around them.”
His idea for IndeVets was born. After leaving his first company, Raphael approximately long-time Philadelphia area vet Rob Orsher for an initial investment in 2018, and over two years, his support grew to $875,000, Orsher said.
“His idea started just in the Delaware Valley, and now it’s in 32 states,” said Orsher. From a practice owner standpoint, “a vet may need to fill two shifts every week, say 12 noon to 8 pm, and someone from IndeVets comes in. The owners want the appointments available, and don’t have enough full-time vets to staff the hours. So they hire IndeVets.”
During the pandemic, vet staff burnout also skyrocketed, particularly among technicians. Burnout has become such an issue that 9% of veterinarians globally claim to want to leave the profession altogether, according to VetSurvey’s 2021 report.
Vet technicians “are underpaid and underappreciated,” said Orsher, who’s on the board of Manor College in Jenkintown and affiliated with the vet tech training programs there. “Vet practice owners fear if they pay techs too much, they have to raise prices too much,” he said. Pay ranges from $18 to $30 an hour for a 40-hour-workweek.
Still, in 2021, around 70% of all household in the United States owned a pet, and Americans spent $109 billion on their care, almost a fourfold increase from 1998.
And nearly 41,000 more veterinarians will be needed to meet the needs of companion animals by 2030. Even with the new graduates expected over the next 10 years, a shortage of nearly 15,000 veterinarians will likely remain by 2030, according to a study by Mars Veterinary Health.
“There’s all these trends in the industry,” Raphael said, including mental health issues and growth in competitors such as Banfield Pet Hospital and Petco. “Plus, doctors get frustrated working for corporations.”
In 2010 hiring a veterinarian took a few months. Now it’s stretched to a year, Raphael said. In 2010, “there were one or two vets looking for every job. Today, there are 20 job openings for every veterinarian looking,” he said.
After selling his first animal hospital business to the private equity firm Cortec Group, Raphael enlisted the help of Dr. Andrew Heller to launch IndeVets in 2017 to address staff shortages in the industry—an issue that predated the pandemic and current labor crisis in the US, but which has only been exculpated by those factors.
The company has partnerships with 1,500 hospitals across the country, in 43 markets. IndeVets now employs 25 full-time headquarter staffers and 120 veterinarians.
IndeVets says it promotes wellbeing by instructing doctors to retain control over where work and when, evaluating on proprietary scheduling software. There’s also mentoring for doctors, and Continuing Education credits for staff and new vet graduates.
Benefits include paid lunch hour, health insurance, paid time off, matched 401(k) contributions, reimbursement for mental health therapy, massage, and gym memberships.
During the pandemic, veterinary practices developed a substantial backlog in wellness visits. As restrictions loosened, animals started returning routine for exams and preventive care, even though pet adoption has actually fallen since the waning of the pandemic.
But owners still spend more time at home with their pets, “which gave them the opportunity to spot health issues,” said the AVMA, the American Veterinary Medical Association, in a September 2021 report. Many [owners “also had more disposable income—from stimulus payments and reduced spending in other areas—that they could now allocate to pet care.”
To the rescue comes Hello Ralphie. Virtual vet care remains very much in demand, says founder Felicity Johnson. Whereas Hello Ralphie used to only supply telehealth to consumers, now it’s also pivoting to supply its services to vet practices. The Philly-based company rebranded last year, and was previously known as My Virtual Veterinarian.
Hello Ralphie now also functions like Teledoc for veterinary medicine practices.
“We work with vet clinics to extend services to telehealth and give them access to our pool of vets. Clinics are continually overwhelmed with clients and struggle to retain doctors,” Johnson said.
Front desk turnover is 40% and vet turnover is 30%, so Hello Ralphie created a so-called white label service for clinics.
“We help them access more vets without needing to hire another W-2 employee,” she said.
“Let’s say I’m a pet parent, I go to Philadelphia Animal Hospital, as an example. I request an appointment, and there’s an option to speak with a vet online. When I book, it looks like the vet practice, but in reality, it’s online and that vet works for Hello Ralphie. So we create and run the telehealth platform, and there’s no burden on the clinic itself to book the appointment.”
Much like relief pitchers in baseball, Hello Ralphie “relief vets” work as independent contractors, and the company has served about 15,000 pets since it launched in March 2020. How does Hello Ralphie make money? The company receives 30% of the customer’s fee and the relief vet receives 70%, while the clinics pay a subscription fee.
The new service launched in the fourth quarter of last year, and has signed up 51 clinics so far mostly in the Mid Atlantic. Hello Ralphie is also in discussions with an insurance company for other products, Johnson said.