When small businesses get bought by big investors, the name may stay the same — but customers and employees can feel the difference. (Part 2 of 2.)
Our previous episode, number 531, was called should you trust private equity to take care of your dog?
Private equity firms have been buying up veterinary practices lately, so this seemed like a pretty straightforward question.
But as it turned out, it's hard to answer.
In some industries where private equity has been around for a while, like human health care, there is years worth of data that economists have analyzed, and they've found some good outcomes for patients and employees and some not so good with pet care.
It's just too soon for that kind of analysis.
So we are trying to figure out as much as we can in real time, because let's be clear, private equity is coming for your pet.
Today on free economics radio, we will hear from one veterinarian who worked at a practice that was bought by a private equity firm.
We had a huge staff turnover.
So out of, say, 16 to 20 doctors, they maybe have five of the original bunch.
We'll ask the CEO of a big pet care company what's going on.
It's a very competitive labor environment for the best veterinarians, the best technicians.
Along the way, we'll get a quick economics lesson.
Monopsony is typically the labor market analog to monopoly.
And I'll tell you what happened at the vet where I took my dog and how that led to our making these episodes.
This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host Stephen Dubner.
Last week, we started our inquiry with a veterinary neurologist who told us about examining an alligator that was weak and lethargic.
But he wasn't so weak and lethargic that they didn't still have him strapped from head to toe to a big table.
And everybody stayed about 10ft away just in case.
But we didn't get to really know her and her story.
So let's do that now.