Private Equity & Pets: A study on the effects of Private Equity entry on the Swedish veterinary care market for companion animals

Abstract: Investigating changes in veterinary care prices in Sweden resulting from the entry of private equity owned clinics and market consolidation. The study uses panel data between 2005 and mid-2016 on veterinary charges for insured dogs to measure the extent to which the growth in price on veterinary services have changed on a per episode basis, meaning the collective series of treatments, for a specific diagnosis of a dog. Using research on the fee-for-service healthcare model, monopolization, the utility of longer life and private equity ownership we deduct the hypothesis that prices should grow at a faster rate after the entrance of private equity compared to before. With three different models of estimations: t-tests on monthly aggregated data, OLS regressions and fixed effects regressions with individual fixed effects on the insurance holder level the hypothesis was rejected, finding no indication that the average price has increased at a faster rate during the time of private equity ownership. Instead, the results suggest an unchanged level of growth. However, the data found a strong positive relationship between the insurance level of the pet owner and the price charged per episode. The implications of our findings were then elaborated upon by help of interviews with various, highly invested stakeholders.