Why VerticalVet Is a Group Resource Community, and Not a Typical GPO

by | Jan 15, 2021 | Community | 0 comments

4 Minute Read

Great businesses are constantly reevaluating their operations, strategy and the alignment of both. Whether that means once a year or once a month depends upon the pace of change. After nearly 20 years in the veterinary industry, the most common conversation I’ve had with clinics, partners, clients, peers, analysts – and even competitors – has revolved around one thing: the rapid, seemingly unending change in our industry. In the last 10 years, an influx of investor money, outside technology and changing pet owner demographics has created a reactive industry chasing the next shiny thing. The unintended consequence is that purchasing and selling expectations are now at a level where most practices do not have the business experience to manage such rapid change, only able to work “in” the business, i.e. what’s happening now.

When Dr. Hank Schwartz and I launched VerticalVet in 2018, both of us were aware of this trend-line and made a commitment to frequently work “on” our business for the long-term. That’s part of the reason we never wanted to be a typical GPO; we recognized that part of the industry’s fire-drill permanence stemmed from GPO’s unwillingness to evolve their mentality or the way they did business. It’s why we chose technology as our differentiator – bringing members real data insights put the purchasing and selling power back in the clinic’s hands, providing stability. But even being equipped to help clinics at our initial launch, we also hypothesized that members would eventually need, want and demand more from their GPO, and soon. VerticalVet 2.0 had to be prepared to rethink everything we knew for the future.

It was with this in mind that our team got together in September 2019 (as we’ve always done every few months) and asked ourselves questions about the future of the industry. We recognized that the new normal – constant change – had to be managed. In discussing the process of trying to manage change, though, we stumbled onto a bigger question: What if, instead of managing a new normal, we helped members create a better normal? What would be required? How would we do it? Was there a risk to being different? We had just finished piloting our Platinum program, (a peer-to-peer best practices sharing group,) paired with our Reminders technology. The results were undeniable and a better future for the industry, our business and our members started to take shape: A Group Resource Community.

What is a Group Resource Community?

A brand new, mission-driven class of service, a Group Resource Community brings together like-minded but wholly independent members and evolves traditional purchasing and peer-to-peer learning opportunities provided by GPOs and cooperatives through 1) the integration of in-house technology, 2) real-time data insights and 3) a commitment to build community among its participants (including vendor partners). Active GRC members are better equipped to engage with industry or marketplace changes on their own terms to define individual success, while also proactively supporting peers and partners.

The team got to work rethinking our GPO, excited to embark on this journey with our members, elevating practices – together. Little did we know COVID-19 was less than 6 months away.

Almost overnight, we had to actionize the structure we’d put in place to support our transition from GPO to GRC and pivot our strategy to respond to immediate needs. In a matter of weeks, we launched Facebook Live Town Halls with Dr. Ernie Ward to focus on the pandemic and stood up a COVID-19 Resource Center; we negotiated, signed and rolled out new partnerships to help clinics meet CDC standards. Members now have access to VetCove, helping them check prices and we continue to evolve our Elevate platform and our communications technology. All of these resources are tailored for easy consumption by practice managers and designed to provide members the future of the industry today in an environment that promotes community, stability and service.

The faces, energy and insight you’ve come to trust over the last 2 years all remain the same in our GRC, and to be clear, we will absolutely continue to amplify our Savings program with our valued partners. But if COVID-19 has taught us anything, to create a better normal, we all must evolve our mentality and the way we do business. Every clinic at VerticalVet still remains responsible for its own success, but the facts are clear: we have a better chance of achieving success together if we are also responsible to each other.

I’m excited for the future of our work as a Group Resource Community, and sincerely hope you are, too.

About the Author

John Wagoner is an accomplished investor and entrepreneur. A graduate of Ohio State University, John has spent nearly 20 years in the veterinary industry, beginning his career as founder and owner of the 2nd largest distribution network in the South Atlantic region before exit. Currently, he serves as President and Co-Founder of VerticalVet, a Group Resource Community providing purchasing, education, technology and community solutions to 1,500+ independent veterinarians. John resides in Cornelius, NC with his family.

Terms and Conditions

Recitals

Practice is a licensed veterinary practice. VerticalVet (“VV”) is a veterinarian buying group (“VBG”). Practice desires to join VV to use VV as its preferred VBG and VV desires to add Practice to its VBG.

Agreement

In consideration of the mutual covenants and agreements hereinafter set forth, the parties agree:

1. VerticalVet Membership. The VV annual membership fee is $550 (“Fee”). Practice will never receive an invoice from VV, the membership fee is retained from accrued Practice rebates (“Accrued Rebates”) as described in Section 4. The Fee total cannot exceed $550, but fees for additional services may be assessed as provided in Section 2 and 3.

a. For new VV Practices that are not using VV’s VerticalVet Reminder (“VVR”) services, VV shall schedule a free VVR Performance Review to demonstrate VVR’s value to Practice ($795 value – no charge).

b. Notwithstanding anything herein to the contrary, VV retains the right to modify (i) the Fee no more than annually upon written notice provided to Practice including an opportunity to opt – out, and (ii) the payment schedule for Accrued Rebates. Practice may review Accrued Rebates by contacting VV at any time.

2. Boehringer Ingelheim Platinum Program. For an additional $450 per year, a Practice manager or DVM owner may participate in VV’s Boehringer Ingelheim Platinum program (“Platinum”). Information about the Platinum program is available at: www.verticalvet.com/faqs/. If Practices desires to add additional Platinum participants, Practice’ Platinum program fee increases by $300 per additional Platinum participant. Collectively the $450 to participate and $300 per additional member are the “Platinum Fees.”

3. VV Data Insights. If Practice is a Platinum participant and an active client of VVR, VV Data Insights (“Insights”) are supplied at no cost. If Practice is a Platinum participant and not an active client of VVR; but desires Insights, it can be provided at an additional fee of $50/month to cover data and administrative fees (the “Data Insights Fee”). Information about Insights are available at www.verticalvet.com/data-insights/.

4. VV Program Benefits. VV negotiates with manufacturers, providers, and suppliers (“Providers”) of medications, foods, sundry items, and services, including medical and business focused continuing education programs, to secure Practice benefits (“Benefits”) that, when possible, meet or exceed those offered by other VBGs. Benefits are listed in detail on VV’s website, www.verticalvet.com, and updated as Benefits are added. Practices are not required to make minimum purchases to participate. The Fee, Platinum Fees, and Data Insights Fee are collectively the “Total Fee.”

a. VV administers, collects and pays Practice Accrued Rebates exceeding the Total Fee annually. If the Total Fee is met, and Accrued Rebates total less than $50.00, they shall be applied to the following year’s Fee. Practices should expect rebate payments sometime in quarter 2 of each year for the prior year’s Practice Accrued Rebates. If Practice does not accumulate Accrued Rebates to cover the Total Fee, VV covers the balance.

1. Conditions. The following are conditions of membership: (i) Practice is not required to withdraw from any other VBG to be a member of VV; (ii) Benefits secured by VV may exceed benefits offered by other VBGs; but this is not guaranteed for each Benefit offered; (iii) Practice must retain its license to practice veterinary medicine or its membership shall be automatically terminated; (iv) Practice authorizes VV to share its identifying information with Providers to the extent necessary to set up and demonstrate Practice’s authority to purchase and use the Benefits offered; and (v) by executing this VV agreement, Practice acknowledges that VV is Practice’s preferred VBG and will be recognized as such with participating VV vendors. If Practice determines, at any time, to (i) designate a different VBG as its preferred VBG or (ii) is sold to a non – VV member or veterinary practice corporate consolidator, it waives its right to collect Accumulated Rebates processed and collected by VV for that year.

2. Confidentiality. The parties acknowledge that the existence of this Agreement, all information related to it, and anything conspicuously marked confidential is confidential and proprietary (“Confidential Information”). Confidential information shall not be disclosed for any purpose unrelated to this agreement without the prior written consent of the other party. Confidential information is not: (i) information that s or publicly becomes known through no fault of a party hereto; (ii) information received from a third party authorized to disclose it; (iii) information developed independently by a party; or (iv) information a party is required to disclose by government authority or a court of competent jurisdiction.

3. Representations and Warranties. Each party represents and warrants that it is authorized to enter into this Agreement, that they will carry out its terms promptly and professionally, and that they will comply with all applicable laws and regulations.

4. Independent Parties. The parties are independent entities. Nothing in the Agreement is intended to create an agency, partnership, joint venture, or fiduciary relationship between the parties and neither party has the authority to act for or on behalf of the other except as provided in the Agreement.

5. Term. This Agreement begins on the Effective Date, continues through its one (1) year anniversary and automatically renews for subsequent annual terms upon conclusion of the prior Term. Practice or VV may terminate this Agreement at any time, but no portion of any annual Fee is refundable.

6. Notice. Notice required or permitted in the Agreement shall be in writing and sent by electronic mail, subject to confirmation receipt requested to VV’s ‘Contact Us’ email address provided at www.verticalvet.com and to Practice’s email address provided during online registration. All such notice shall be deemed received the following business day from the date it was sent.

7. General. This Agreement constitutes the entire understanding of the parties and supersedes all prior communications and understandings. It may only be amended in a writing executed by both parties. Practice may not assign it without the written consent of VV. The Agreement shall be governed and construed under the laws of the state of Ohio. Any dispute regarding the Agreement shall take place in the state or district courts of Franklin County, Ohio. If any provision is found invalid or unenforceable by a court of authority, the remaining provisions are valid.

8. Execution. This Agreement, by its presence on the website is executed by VV and becomes a binding Agreement when Practice accepts it and completes their registration.

Recitals

Practice is a licensed veterinary practice. VerticalVet (VV) is a veterinary buying group ("VBG - Vet Buying Group"). Practice desires to join VV to use VV as its preferred VBG and VV desires to add Practice to its VBG.

Agreement

In consideration of the mutual covenants and agreements hereinafter set forth, parties agree:

  1. VerticalVet Membership. The VV annual membership fee is $500.00 (“Fee”). Practice will never receive an invoice from VV, the membership fee is retained from accrued Practice rebates ("Accrued Rebates") as described in Section 2. The Fee total cannot exceed $500, except as provided in Section 1.1 If Practice does not accumulate Accrued Rebates to cover the Fee, VV covers the balance.
    1. For new VV member Practices that are not currently using VerticalVet Reminder, LLC (“VVR”) services, VV shall schedule a free VVR Performance Review to demonstrate VVRs value to the practice ($795 value - no charge).
    2. The Fee is charged to cover VV administration expenses. VV retains vendor rebates up to the annual Fee.
    3. The Fee includes an opportunity for a Practice manager or DVM owner to participate in the Platinum program. If Practice wishes to include a second Platinum participant, Practice Fee increases to $800/year.
    4. If Practice is a Platinum participant and an active client of VVR, VV Data Insights are supplied at no cost. If Practice is a member of VV, but is not a Platinum participant, and is not an active client of VVR, but desires VV Data Insights, it can be provided at an additional fee of $50/month to cover data and administrative fees.
    5. Notwithstanding anything herein to the contrary, VV retains the right to modify (i) the Fee no more than annually upon written notice provided to Practice including an opportunity to opt - out, and (ii) the payment schedule for Accrued Rebates. Practice may review Accrued Rebates by contacting VV at any time.
  2. VV Program Benefits. VV negotiates with manufacturers, providers, and suppliers (“Providers”) of medications, foods, sundry items, and services, including medical and business focused continuing education programs, to secure Practice benefits (“Benefits”) that, when possible, meet or exceed those offered by other VBGs. Benefits are listed in detail on VV’s website, www.verticalvet.com, and updated as Benefits are added. Practices are not required to make minimum purchases to participate.
    1. VV administers, collects and pays Practice Accrued Rebates exceeding the Fee no less than annually. If the Fee is met, and Accrued Rebates total less than $50.00, they shall be applied to the following year Fee.
  3. Conditions. The following are conditions of membership: (i) Practice is not required to withdraw from any other VBG to be a member of VV; (ii) Benefits secured by VV may replace or exceed the benefits offered by other VBGs; but this is not guaranteed for each Benefit offered; (iii) Practice must retain its license to practice veterinary medicine or its membership shall be automatically terminated; (iv) Practice authorizes VV to share its identifying information with Providers to the extent necessary to set up and demonstrate Practice’s authority to purchase and use the Benefits offered; and (v) by executing this VV agreement, Practice acknowledges that VV is Practice’s preferred VBG and will be recognized as such with participating VV vendors. If Practice determines, at any time, to designate a different VBG as its preferred VBG, it waives its right to collect Accumulated Rebates processed and collected by VV for that year.
  4. Confidentiality. The parties acknowledge that the existence of this Agreement, all information related to it, and anything conspicuously marked confidential is confidential and proprietary (“Confidential Information”). Confidential information shall not be disclosed for any purpose unrelated to this agreement without the prior written consent of the other party. Confidential information is not: (1) information that s or publicly becomes known through no fault of a party hereto; (2) information received from a third party authorized to disclose it; (3) information developed independently by a party; or (4) information a party is required to disclose by government authority or a court of competent jurisdiction.
  5. Representations and Warranties. Each party represents and warrants that it is authorized to enter into this Agreement, that they will carry out its terms promptly and professionally, and that they will comply with all applicable laws and regulations.
  6. Independent. The parties are independent entities. Nothing in the Agreement is intended create an agency, partnership, joint venture, or fiduciary relationship between the parties and neither party has the authority to act for or on behalf of the other except as provided in the Agreement.
  7. Term. This Agreement begins on the Effective Date, continues through its one (1) year anniversary and automatically renews for subsequent annual terms upon conclusion of the prior Term. Practice or VV may terminate this Agreement at any time, but no portion of any annual Fee is refundable.
  8. Notice. Notice required or permitted in the Agreement shall be in writing and sent by electronic mail, subject to confirmation receipt requested to VV’s ‘Contact Us’ email address provided at www.verticalvet.com and to Practice’s email address provided during online registration. All such notice shall be deemed received the following business day from the date it was sent.
  9. General. This Agreement constitutes the entire understanding of the parties and supersedes all prior communications and understandings. It may only be amended in a writing executed by both parties. Practice may not assign it without the written consent of VV. The Agreement shall be governed and construed under the laws of the state of Ohio. Any dispute regarding the Agreement shall take place in the state or district courts of Franklin County, Ohio. If any provision is found invalid or unenforceable by a court of authority, the remaining provisions are valid.
  10. Execution. This Agreement, by its presence on the website is executed by VV and becomes a binding Agreement when Practice accepts it and completes their registration.