The Dollars and Cents of Treating Cats and Dogs

I have spent more time in veterinary hospitals than I would have liked over the past couple of years. My wife, Polly, and I were constantly taking our beloved yellow Labrador retriever, Babe, to veterinarians and animal hospitals until "the little guy" -- as we called him -- passed away a few months ago at age 11 1/2 .

Babe was the best. When he was sick, I was a wreck and couldn't wait to get him home from the hospital. I didn't shop around much for care.

But Babe's encounters with animal hospitals made me curious about the economics of pet care. I had heard about a practice called SouthPaws from a colleague who took her dog there for ACL surgery, so I called the clinic and asked if I could explore.

SouthPaws founder and veterinary surgeon Bud Siemering, 64, has a bouncy demeanor. The Ohio State University graduate and entrepreneur plays in a band; he's a pilot and a formally trained chef. He once worked on Triple Crown superhorse Secretariat. And he has a Jack Russell terrier named Roger.

Siemering founded SouthPaws with two other vets in a cramped office at a Springfield strip mall in 1995 . He has since expanded and relocated its facilities, staff and services to a site just off the Capital Beltway on Arlington Boulevard in Fairfax County, building it into one of the biggest non-university veterinary hospitals east of the Mississippi. The name comes from its three founders' being left-handed.

He sums up the SouthPaws culture this way: "Treat people and their pets the way we would treat our own pet and the way we would want to be treated if we were the owner."

The vast majority of SouthPaws' patients come from referrals through family veterinarians. Some are walk-ins to its 24-hour emergency room.

The place is expensive to operate. SouthPaws staff includes five of the 175 veterinary cancer specialists in the world, four surgeons, an ophthalmologist, five emergency-room doctors and a physical therapist. Its payroll of around 120, including the 27 full-time veterinarians, costs $250,000 every two weeks. Veterinarians typically make $100,000 to $125,000 a year.

And then there is the fancy equipment. The center has a CAT scanner, which produces three-dimensional images of the body and costs $2,500 a month just to service. It has a chemotherapy treatment room, two X-ray machines and five operating rooms. One radiation machine for combating cancer cost $1.3 million, including the room it's in. A hyperbaric chamber will arrive shortly.

Drugs and supplies run between 8 percent and 12 percent of revenue. Employees get health-care coverage, up to four weeks' vacation and practically free care for their pets.

Surgery and emergency and critical care fuel more than half of SouthPaws' revenue. The rest comes from a variety of sources including cancer treatment, physical therapy, and markups on such things as blood tests.

The most common procedure is a tibial plateau leveling osteotomy (TPLO), which fixes a pet's ACL -- anterior cruciate ligament. (Babe had two of these procedures at around $5,000 a pop, all in.) SouthPaws says its TPLOs run between $2,000 and $3,500, which includes anesthesia, blood tests, X-rays, the operating-room fee, oxygen, nursing care, and room and board. Siemering or another surgeon collects a surgical fee of around $500 for the operation.