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Predicting the impact of consolidation in the veterinary industry

Predicting the impact of consolidation in the veterinary industry can be a complicated process since the trend has started recently. However, the trend can be compared to an earlier and fast-growing trend of human health care industry consolidation as the model. The model would help in identifying the negative and positive aspects of consolidation in veterinary service. Theoretically, consolidation can result in savings for customers. Due to their immense capital, corporations save money in the event of bulk purchases which allows negotiations for discounts in medical supplies and equipment. They are also likely to get low interest when borrowing loans from banks. They tend to save money due to the use of streamlined administrative software, marketing and accounting. All these savings can trickle down to the customers. However, in reality, savings obtained from low operational costs may not translate to cheaper services. (Dafny, 2012 further explains that in human healthcare, hospital consolidation raised healthcare costs by around 5%. Consolidated hospitals close to each other have alarmingly raised the prices of their services by almost 40%. The underlying reason for this is the fact that companies have investors who are interested in profits. The investors use their capital to consolidate hospitals in an entire area to offer low costs services than the privately-owned entities. By doing this, they eliminate competition, and due to fewer market forces, they raise prices at will.

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