Barking, meowing, cone-head vet visits do wonders for sick pups and cats. Unfortunately, all is not well in vet world. Veterinarians suffer from high rates of stress and burnout—especially after millions adopted “pandemic pets,” crowding vet parking lots with new patients nationwide. Now Dallas-based Galaxy Vets is trying to do something about that—by launching an employee co-owned vet healthcare system in Dallas-Fort Worth, with vets’ well-being at top of mind.
A new study says nearly 40 percent of vets plan to leave the profession—mostly due to stress from work-life balance issues. The burnout can be deadly: Male veterinarians are more than twice as likely to die by suicide than the general population. For female vets the suicide rate is even worse—at three and a half times the general population.
To help alleviate that crisis, Galaxy Vets is pursuing a business strategy aimed at promoting positive change for vets and their tech teams.
The startup will be acquiring general practices across the Dallas-Fort Worth region with plans to then build a new surgical and emergency specialty hospital with its own reference lab. The result: a vertically integrated veterinary healthcare system in North Texas.
Galaxy’s big twist: The former owner of each practice would be asked to roll 50 percent or more of the selling price back into Galaxy Vets in exchange for equity in the entire enterprise, helping to fuel its future development. Galaxy claims it can render “higher multiples than any current consolidator,” allowing owners “to participate in the operational changes and maintain leadership positions in their clinics.”
Team members from veterinarians to technicians to receptionists can become employees of Galaxy Vets, get highly competitive compensation, and—based on their tenure—receive equity in the entire network, with the potential of further investment in Galaxy Vets.
“We’ve developed a value creation plan clearly defining the areas we will improve. Thus, we are only targeting practice owners who are ready to change and embrace our culture of continuous improvement,” Dr. Ivan “Zak” Zakharenkov, CEO of Galaxy Vets, said in a statement.
Competing with private equity
Galaxy Vets is using VIS methodology and technology developed by Dr. Zak to combat veterinary burnout by addressing poor work-life balance and work culture, substandard compensation, excessive workload, and mental health issues.
By putting vets and their teams first, Galaxy believes it has an edge over private equity competitors who prioritize the bottom line above all.
“As a burned-out vet in the past, eradicating this chronic illness of our profession has become a very personal goal for me,” Dr. Zak said (Zak is his preferred nomenclature). “For the past decade, veterinary medicine has been taken over by private equity capital which is completely detached from the realities of our profession. Forced to generate revenue for investors, traditional consolidators often fail to fulfill their promise to improve the businesses they acquired, including better care for the veterinary teams.”
Zak believes this factor—along with growing trends of pet ownership and vet burnout—threatens the entire vet industry.
“It’s shocking that almost every second vet is considering leaving the profession,” Zak said. “Every organization must make their employees’ well-being an absolute priority, and that’s how it’s going to be at Galaxy Vets.”
Leveraging the upmo mobile app
A driving force behind Galaxy Vets is upmo, a mobile app designed for all levels of the organizations, from HQ to veterinarians. Galaxy says the app aligns vets with the C-level through real-time data; visualizes performance; allows vets to see how their work contributes to business performance; and offers motivation through goal-setting. Galaxy says work-life balance features are in the works for the app as well.
Consolidating practices is a growing trend
Zak and Galaxy Vets are part of a growing trend. According to a Brakke Consulting industry overview, 50 or more consolidators are buying up practices in the U.S. Around 1,000 practices were acquired in 2020 alone. Within two years, consolidators will own more than 25 percent of practices doing 50 percent of pet care, Brakke projects.
Initially, Galaxy Vets plans to acquire 10 to 20 general practices in the Dallas area. Over the next five years, the startup plans to build 20 specialty hospitals with their own reference labs, while acquiring 200 satellite general practices to refer patients and supply lab work.
The company plans to have a lab with an ER hospital operating in Dallas by the second quarter of 2022. For now, the company is working virtually with a core team spread across the U.S. and Canada.
“We’re planning to create regional offices for central facilities such as call centers and core laboratory hubs,” the company told us.
In addition to its North Texas acquisitions, Galaxy Vets adopted an astronomical metaphor to explain its future U.S. expansion plans. The startup “will be acquiring general practices within small regions across the U.S. to eventually build 20 ‘solar systems’ consisting of a de novo built specialty practice with own lab (“star”) surrounded by acquired general practices (“planets”), and “moons” (general practice owners who invest in the network but don’t sell).”
After Dallas-Fort Worth, the company’s next candidate cities include San Francisco, Indianapolis, San Diego, and Seattle.
Addressing staff shortages
Staff shortages are a chronic problem for vet practices nationwide. According to the American Veterinary Medical Association, 18 positions were open for every veterinarian seeking a job between January 2019 and May 2021. Six positions were open for every tech and assistant seeking a job.
Attracting and keeping staff and leadership will be a big Galaxy Vets objective.
“We’re actively looking for veterinary professionals—vets, specialists, and vet techs,” the company told us. “Galaxy Vets has proprietary software developed in-house and will continue hiring in both the tech sector as well as leadership for regional management.”
Dr. Zak’s past startups
Prior to launching Galaxy Vets, Dr. Zak has had two other successful startups. He sold SmartFlow—a veterinary workflow optimization system—to Fortune 500 company IDEXX and became general manager of the software division.
After leaving IDEXX, Zak launched Veterinary Integration Solutions (VIS), an executive consulting firm offering a business methodology and technology for veterinary groups to help them systematize acquisition, integration, and improvement of practices “while preserving the employee experience.” Galaxy Vets is built using these VIS tools. VIS is continuing its research work in the world of burnout—including this recent study—as well as the development of its business methodology.
In addition to his work with Galaxy Pets, Dr. Zak is an active angel investor, the co-host of two podcasts, Veterinary Innovation Podcast and Consolidate That!, and the host of the Leading With Purpose webinar series. He’s written articles for DVM360, Today’s Veterinary Business, Entrepreneur and other publications.
More info about Galaxy Vets and its qualification criteria are available here.
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