NEW rules designed to make veterinary care and bills more transparent and affordable could have the unintended consequence of pushing prices up, an industry expert has warned.
The Competition and Markets Authority (CMA) is bringing in reforms aimed at increasing price transparency, making it easier for pet owners to compare costs and buy medicines elsewhere.
But Eddie Holmes, founder of comparison website VetsCompared.com, believes some of the changes could trigger a “race to the top” on pricing rather than actually drive fees down.
Holmes says the reforms, while well intentioned, may alter how independent practices set their prices and could ultimately leave pet owners paying more.
He said: “The assumption is that greater price transparency automatically creates more competition and lower prices. But that’s not always how markets work.
“When cheaper independent practices can clearly see nearby corporates charging significantly more for the same consultation, some may conclude they’ve been undercharging for years and hike their own fees.”
One of the CMA’s proposals would require practices to publish consultation prices more clearly.
Money on the table
While the reforms are intended to help consumers shop around and save money, Holmes believes they could create a public pricing benchmark for veterinary practices themselves.
He said: “A practice charging £42 for a consultation may discover nearby corporate groups are charging £65 to £80. Instead of thinking competitors are too expensive, they may simply decide they’ve been leaving money on the table.”
Another major proposal would make it easier for owners to buy prescribed medicines elsewhere by capping prescription fees and requiring vets to tell clients they may be able to obtain medicines more cheaply from other suppliers.
The CMA argues this is necessary because veterinary practices act as both the prescriber and the seller of medicines, creating potential conflicts of interest.
But Holmes says medicine sales often subsidise other parts of an independent practice.
That’s not always how markets work
He explained: “Many independent practices use medicine income to help keep consultation fees lower while covering staffing costs, equipment, rent and out-of-hours services.
“If that revenue falls, they won’t simply absorb the loss forever. They’ll have to recover it somewhere else, and consultation fees are the obvious place.”
Holmes also questions whether cheaper independent practices actually want significantly more customers if they are already operating close to capacity.
He said: “Lower prices only make commercial sense if you’ve got room to see more patients. Many independents are already incredibly busy. Taking on extra work at underpriced consultation fees isn’t necessarily good business.”
Recent industry research has also suggested the price gap between independent and corporate practices has already begun to narrow during the CMA investigation.
Holmes believes this could be an early sign that greater transparency is encouraging some independents to move prices upwards rather than forcing larger operators to reduce theirs.
Perhaps his biggest concern, however, is what the reforms could mean for the long-term future of smaller practices.
The elephant in the room
He said: “The elephant in the room is whether some independent vets decide these additional regulatory pressures are simply the final straw.
“If more decide to sell up, the most likely buyers will often be the larger corporate groups that already tend to charge higher prices. That could ultimately reduce competition rather than increase it.”
Holmes acknowledges there are several reasons why his concerns may not materialise. Increased consumer price comparison, stronger competition and lower medicine costs could still deliver savings for pet owners.
But he believes the reforms should be judged on their real-world impact rather than their intentions.
He added: “Everyone wants better value and greater transparency for pet owners. The challenge is making sure the reforms don’t accidentally produce the polar opposite result.”
Photo by Karsten Winegeart on Unsplash.
