A new breed of networked hospitals
The average veterinary team turnover rate in the industry is 23% per year. At Rarebreed animal hospitals’ 37 New England hospitals—nine of which are AAHA-member hospitals—the voluntary turnover rate is 3.8%.
What’s their secret?
CEO and Co-founder Dan Espinal and COO and Co-founder Sean Miller think it has to do with the third part of their company’s mission: to deliver exceptional patient care, outstanding client service, and “a kick-ass employee experience.”
Espinal and Miller got resoundingly positive feedback last month that their mission is on point when the two men were named Entrepreneur Of The Year 2021 New England Award winners (EY).
Neither of the men are veterinarians, but they the know the business side of the industry very well. They met in 2015 while working at IDEXX on a three-man team in charge of acquiring independent diagnostic labs. Espinal said they cemented their relationship on a two-week buying trip to Paris: “I don’t think we ended up buying the lab, but we got to know each other really, really well.”
Later in their tenure at IDEXX, Espinal and Miller started working closely with individual hospitals. “We started to understand the day and life of a veterinarian and a veterinary technician,” Espinal said.
It was eye opening for both.
Miller said, “We were seeing these amazing people working in hospitals, and also seeing these high levels of turnover.” The hospital employees they talked to, from the vets to the CSRs, weren’t very satisfied with their work environment or future prospects: “The business model wasn’t set up to deliver to the folks on the ground what they were asking for.”
Around the same time, they noticed the trend towards companies like Banfield and VCA buying up veterinary hospitals and making them part of branded chains. Espinal compared the companies to incredibly efficient restaurants, with high throughput and high turnover. Their business model “served a function, and it worked.”
Espinal and Miller also saw that the biggest pain-point those companies had was identical to the biggest pain they were seeing in independent hospitals: attracting and retaining talented, qualified staff.
That got the two friends to thinking.
“We saw a real opportunity to bring something to the market which we didn’t think existed, which is to build a company from the ground up whose DNA centered on delivering a great work experience for veterinary hospital staff,” Miller said. “And if you can do that, you might sacrifice some short-term profits, but if we can build a business that feels more like a community for the staff, we would have better access to talent. And that would drive better medical care for more patients.”
Espinal said they spoke to a number of investors about the plan and all wanted in. “So, I knew were on to something.”
Inspired, the pair founded Rarebreed soon after, and bought their first hospital in June of 2019.
Three years later they have 37 hospitals and 1,100 employees. But Espinal said, “The coolest number, my favorite number, is that voluntary turnover rate of 3.8%.”
Rarebreed hospitals include general care practices and specialty hospitals, and the company just opened two urgent care facilities. As far as the culture at pre-existing practices, Espinal said, “If it’s a healthy culture, we leave it alone. If not, we try to help and support it, and make it better. Our goal is to help folks thrive.”
When Rarebreed looks for hospitals to buy, Espinal said, “We actually target AAHA-certified hospitals. Sean and I are big believers in AAHA” and their mission to encourage excellence in veterinary medicine.
Miller seconds that, adding that when they find an AAHA hospital they’re interested in buying, it generally has a great practice culture already in place. “That’s the first thing we look for.”
In the end, Miller said, “a great practice culture is built on teamwork. You need a great practice culture for a team to be effective.” Miller said. “And when I say effective, I don’t just mean producing a lot of revenue and profit, but creating the conditions where folks can actualize their hopes and dreams, and find meaning in the world.”
“For us, the real magic here is understanding what people’s needs are,” Miller added. He compares it to basic business strategy: If you can understand your audience and give them what they're asking for, your audience is more likely to be happy, and so will you. “Our audience is our staff.”
As New England EY winners, Dan and Sean are now eligible for consideration for the EY 2021 National Awards, to be announced in November. The EY celebrates entrepreneurs through regional and national awards programs in more than 145 cities in more than 60 countries. National overall winners go on to compete for the EY World Entrepreneur of the Year title.
Hear Rarebreed CEO Dan Espinal, a former US infantry officer in Afghanistan, speak in person this September at Connexity on “An Entrepreneur and Army Captain’s Practice Toolbox: How To Build a Mentally Resilient Team.” Register now.
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