Given that many Americans increasingly can’t afford healthcare for themselves, it comes as no surprise that they are forgoing often life-saving care for their pets. More than half of U.S. pet owners (52%) report having skipped needed veterinary care in the past year, including 37% who say they have visited the veterinarian but declined one or more care recommendations, and 15% who say they have not brought their pet to the veterinarian because they couldn’t afford it. Blacks and Hispanics reported being even more adversely impacted.
There’s even a financial term for the outcome of this growing and dire trend: economic euthanasia — when a pet is euthanized not because of untreatable health issues, but because the owner can’t afford medical treatments that could save their furry companion and allow them to live a healthy life, continuing to bring joy to their adoptive human parents for years to come.
Pet ownership in America is well on its way to becoming another status symbol for the rich, much like owning a home or the latest and greatest new vehicle. Nearly a quarter (23%) of pet owners surveyed by LendingTree last August said they considered giving up their pets due to financial strain, while 39% said they won’t own a pet again. Gen Z pet owners (ages 18–27) are the most impacted, with 46% considering going petless. Additionally, 12% of all Americans—and 25% of Gen Zers—have surrendered pets because they couldn’t afford to care for them.
One doesn’t need a University of Chicago economics degree to understand what’s driving the trend. The cost of pet care has risen considerably in recent years, outpacing the rate of inflation. According to the latest federal data, the cost of veterinary services has increased by 5.9% over the past 12 months. The overall rate of inflation, meanwhile, was 2.4% for the same period (before seasonal adjustment). In the past five years, the cost of veterinary care has surged 38.6%.
The cost of feeding pets is also soaring, having risen 25% in the past five years. Meanwhile, the safety of pet food has notably declined. Between 2003 and 2022, there were approximately 3,691 pet food-related recalls in the U.S., mostly involving dog and cat food. Of these, 68% involved pet foods, treats, and ingredients; 27% pertained to drugs; and 5% were related to supplements such as vitamins and minerals.
Indications are the pet food is even more contaminated than what the recalls indicate. The Association for Truth in Pet Food previously warned that America’s pet food regulatory system was broken and in need or urgent repair. I’ve found no evidence that corrective measures were taken. Given the Trump Administration’s aversion to regulation, it’s reasonable to expect the safety of pet food will continue to decline, perhaps at an even more alarming rate.
The evidence is overwhelming why the cost of caring and feeding pets has become so prohibitively expensive: The pernicious paws of private equity.
When it comes to sniffing the smell of potential money, private equity folks have olfactory skills superior to that of canines. At the turn of this century many came to appreciate that pet ownership was on the rise and that Americans, particularly millennials and the Gen Z generation, increasingly viewed their furry friends as family members, a shift known as the humanization of pets. Sixty-six percent of households in the U.S., or 86.9 million, own a pet, according to the American Pet Products (APPA) National Pet Owners Survey of 2023 and 2024.
The pet care industry was once highly fragmented, making it ripe for private equity acquisition. Although it’s more competitive to gain admission to veterinary school than to most medical schools, owning a veterinary practice was rarely lucrative. Compounding the challenges, veterinarians often suffer from high levels of emotional stress, depression, and an above-average rate of suicide.
Private equity firms saw opportunity. Backed by billions from pension funds, university endowments, and ultra-wealthy investors, they began scooping up veterinary practices—offering premiums far above what most individual buyers could match.
Bloomberg identified the trend as early as 2017. Two years later I sounded the alarm with this post headlined, “Protecting Rover and Kitty From Wall Street’s Greed,” highlighting horror stories about PE-controlled pet businesses.
Estimates indicate that between 30% and 50% of general veterinary clinics in the U.S. are now owned by corporate entities, many backed by private equity. This marks a significant rise from less than 10% a decade ago. The consolidation is even more pronounced in specialty fields such as oncology, cardiology, and emergency care, where approximately 75% of practices are under corporate or private equity ownership. While I couldn’t find exact figures, industry publications suggest that private equity firms have acquired a significant share of the pet food market, especially in high-growth areas like premium and specialty products.
Those drawn to private equity aren’t the sentimental sort, and I assure you the surge of PE firms into pet care wasn’t driven by a love for dogs and cats. Rather, it’s an opportunity for people who would sell their own mothers for a buck to exploit those who would spend their last dollar to save a beloved pet. If I removed the part of your brain that regulates morals, ethics, and empathy, you too could become a Master of the Universe—with multiple homes, yachts, and priceless paintings—invited onto CNBC to pontificate about the economy while beauteous anchors nod admiringly at your every word.
Private equity vultures crow about their abilities to achieve “operating efficiencies.” That might seem a noble and worthy goal, but in practice it means selling more procedures and services to pet owners, even if they aren’t needed. Stories abound about veterinarians and their assistants, known as techs, being pressured to meet procedure quotas and generate increased profit. Stateline, a nonprofit news service, reported on the trend in this story a year ago.
“A large number of these (private equity) funds are seeing veterinary medicine as a good profit center,” Grant Jacobson, an Iowa veterinarian who serves on the board of the Independent Veterinary Practitioners Association, told Stateline. Jacobson said he’d seen corporate-owned chains in his region drive up prices for consumers, suppress market competition and skirt state laws that ostensibly prohibit veterinary practices from being owned by non-veterinarians.
Eighteen states have laws mandating that only veterinarians can own a veterinary practice, but PE firms make a mockery of these laws, according to the Economic Liberties Project. A veterinarian may technically own the practice but can lease or sell all its non-medical assets to what’s known as a management services organization (MSO) owned by the consolidator. While revenue and expenses flow through the veterinarian-owned corporation, it pays a management fee to the larger consolidator and passes all profits back to it.
For a taste of the embarrassment of riches PE firms hope to extract from caring for America’s pets, allow me to introduce Justin Ishbia, the billionaire founder of a Chicago-based firm called Shore Capital Partners. The company’s $7 billion portfolio includes a network of veterinary hospitals and clinics spanning more than 750 locations and generating $580 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA).
Ishbia also owns the Phoenix Suns basketball team alongside his billionaire brother Mat, CEO of Michigan-based United Wholesale Mortgage (UWM), the nation’s largest home lender—a business founded by their father.
As reported by Forbes in April of last year:
Shore’s average internal rate of return on its 14 exits, all in health care, is 53%, net of fees. That’s nearly triple the average net IRR of U.S. buyout funds raised since 2009, according to data from Cambridge Associates. After Shore took its 20% to 30% cut of profits, its exits multiplied investors’ money by 5.5 times on average, also nearly triple the average total value to paid-in capital multiple of U.S. buyout funds raised during that period. Shore has never unloaded a company for less than three times cost before fees, nor, it says, has it ever suffered a loss. “Those are top 1% returns in private equity,” marvels one investor who asked not to be identified, citing his organization’s press policy. “That’s rarefied air, right? That’s more like venture capital than a traditional buyout firm.”
Tellingly, Forbes reported that Ishbia doesn’t entrust the care of his two yellow labrador retrievers to any of the clinics under his control but has them treated remotely by Jay Price, the CEO of Southern Veterinary Partners, one of Shore Capital’s first portfolio companies. Price no longer treats other pets, Forbes reported.
Another player in the pet care space is Blackstone, the most rapacious PE firm whose CEO once compared Obama’s proposed tax changes to Hitler invading Poland. Blackstone last year acquired Rover in a transaction valued at $2.15 billion.
Left unchecked, private equity will continue expanding its dominance in the pet care space, which will drive up healthcare costs and force more Americans to give up their pets or avoid adopting them altogether. According to the Human Animal Bond Research Institute (HABRI), pet ownership is estimated to save the U.S. healthcare system nearly $23 billion a year due to the mental and physical health benefits of animal companionship.
Naturally, private equity stands to benefit from rising medical costs, having already gained considerable control over — and inflated the costs of — the human healthcare industry.
This is the first of two articles commemorating National Pet Week, which runs from May 4 to 10.