Chattanooga businessman hopes to have 10 new veterinary offices opened in area by end of next year [photos]

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Chattanooga Veterinary Network's business model lets veterinarians focus on pets' health

Tag Thompson just helped open two new veterinary offices, or "pet wellness centers," one in St. Elmo and another in Hixson. And he's just getting started.

"We're going to have 10, I think, by the end of next year," said Thompson, president and founder of Chattanooga Veterinary Network.

Thompson has a business model that he says makes it easier for veterinarians - a profession still recovering from the 2008-2009 recession - to start new practices.

Here's how it works: Veterinarians set up independently owned offices and save money in such ways as buying supplies as a group and sharing X-ray, imaging and surgery facilities at a newly opened animal hospital in St. Elmo that's a separate business from the network. It's the Veterinary Care and Specialty Group (VCSG), a 24-hour, seven-day-a-week, state-of-the-art animal hospital that opened Sept. 19 at 3812 Tennessee Ave. in the heart of St. Elmo's business district. The clinics in the Chattanooga Veterinary Network will shuttle pets there by van.

Veterinarians will pay Thompson a percentage to run the business side of their offices, including handling incoming phone calls, payroll, information technology and marketing.

"We do all that for them and let them focus on medicine," Thompson said.

Thompson said overhead typically accounts for 57 percent of a veterinarian office's cost. He declined to say what percentage he charges vets to handle the business side of things, but he said it's less than half of 57 percent.

Setting up a typical practice might cost $2 million, he said, while his model usually costs veterinarians less than $100,000.

Veterinarian Denise Jones has faith in Thompson's business model. She recently opened the Hixson office of the Chattanooga Veterinary Network in a strip mall on Highway 153 anchored by Aldi's supermarket.

"I like to spend time with people," said Jones, who went for a "front porch" feel when she chose furniture for her office. She's decorated the walls with paintings of historic Savannah, Ga., and New Orleans, La., where she went to veterinary school at Louisiana State University.

Jones confirmed that it costs about $2 million to open a "traditional" veterinary office.

But she said veterinarians in the network save money by using the X-ray, imagining and surgery at VCSG.

"Since I don't have to support the overhead of the big equipment, I can spend more time with patients," Jones said.

Wellness for pets

The Chattanooga Veterinary Network has a membership model for its customers called The Pet Club, under which pet owners pay a $50 set-up fee and monthly fees of $8, $16 or $30 plus $20 per office visit for such services as monthly nail trims, vaccinations and dental work. Pet owners still have to pay out-of-pocket for such things as emergency care for pets hit by cars.

The idea behind the membership model is that it reduces big, out-of-pocket costs for pet owners and it stabilizes veterinarians' cash flow.

"You don't have to join the club to get anything done," Jones said. But members save money on $20 office visits, she said, compared to $65 for a non-member.

The Pet Club is one of the things that drew Lookout Mountain, Ga., resident Doyle Mathis to bring his two dogs to veterinarian Stephanie Sullivan's new Chattanooga Veterinary Network Wellness Center in leased space at the VCSG animal hospital in St. Elmo.

Mathis said he and his partner Lori Carter had just been talking about how it would make sense for dogs to have health insurance.

"That's pretty much what their program is," Mathis said. "Somebody's already doing what we thought we invented."

High demand for veterinarians

Plenty of veterinarians want to start a practice, Thompson said, and there's high demand for new vets.

"The recession put a lot of vets out of business," he said.

During the economic downturn, pet owners were less willing to spend a lot of money for high-dollar care, such as pet surgery, he said. As a result, many veterinarians took other jobs, such as working in the meat inspection business. A number of veterinarians who didn't have their own practice worked as associates for other veterinarians, Thompson said.

Employment of veterinarians is projected to grow 9 percent from 2014 to 2024, faster than the average for all occupations, says U.S. Bureau of Labor Statistics' Occupational Outlook Handbooks says.

"Right now, vets graduate with $300,000 in debt," Jones said. She said it was only last year that the veterinary practice began to recover from the recession.

Thompson's demographic research shows that the population of the greater Chattanooga area has almost doubled since 2000 while the number of veterinary practices has only increased by 10 percent.

Chattanooga now has three animal hospitals

Thompson is a pet-lover who got into the veterinary business about 15 years ago by working as a veterinary technician while attending college.

He first moved to the Chattanooga area in 1999 to attend Bryan College in Dayton, Tenn., and later got a degree in applied economics from Johns Hopkins University in Baltimore, Md.

Now he acts as a consultant to veterinarians, and he's helped launch eight animal hospitals.

Thompson started the Animal Emergency and Specialty Center in Chattanooga in 2014 and sold it in 2015. It's now located at 6393 Lee Hwy.

"It was very successful very quickly," Thompson said of the animal hospital. Proceeds from its sale helped launch the Chattanooga Veterinary Network, he said.

Previously, Chattanooga only had one 24-hour emergency clinic for animals: the Regional Institute for Veterinary Emergencies and Referrals (RIVER) at 2132 Amnicola Highway. Now Chattanooga has three such clinics: RIVER on Amnicola, the Animal Emergency and Specialty Center on Lee Highway and VCSG in St. Elmo.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/MeetsForBusiness or twitter.com/meetforbusiness or 423-757-6651.