AAHA, Chewy Inc., Petabyte Tech, and Benchmarking
Where there's smoke, there's fire... right?
The poet Horace was the first to use the term “in medias res,1” in his Ars Poetica (c. 13 BCE) to describe the ideal epic poet, “Nor does he begin the story of the Trojan war from the egg, but always he hurries to the action, and snatches the listener into the middle of things.” The “egg” is a reference to the origin of the Trojan War, namely the birth of Helen and Clytemnestra from the double egg laid by Leda following her seduction by Zeus, who was disguised as a swan. “In medias res” means “in the middle of things.”
In Medias Res
On 14 December 2023, Mita Malhotra, president of Chewy Health, a branch of online retailer Chewy, Inc., announced that the company would launch pet health practices under the brand name “Chewy Vet Care” in 2024. This week, the hospital opened.
Chewy’s venture into providing veterinary services represents to many, including your cantankerous author, not only a betrayal of their promises of partnership with the veterinary profession but also another step into their deliberate, patient, and consistent efforts to disrupt the industry as a whole.
Disruption
It’s very much in vogue to be a “disruptor” these days, but I find myself unimpressed by what, to me, often amounts to little more than modern-day “Newspeak.” While Chewy announces that its mission “is to be the most trusted and convenient destination for pet parents and partners, everywhere,” the actions tell a different and much less kind, more self-serving story.
Though perhaps the formal definition of “disrupt” is suited here: “to interrupt an activity by causing a disturbance or a problem.” That does sound like the modus operandi of what Chewy, Inc. seeks to do within the veterinary field, especially given their past actions. It aligns the modern corporate culture distilled in Facebook’s old motto, “move fast and break things.”
The trouble is, in a world as small as veterinary medicine, in a field as passion-driven as the care of animals, breaking things has consequences. This industry is too small and populated with too many lifers to break things and leave one’s reputation unscathed.
So the term 'disruption' bears a dual edge, distinguishing between innovation that fosters growth and tactics that undermine ethical standards. Positive disruption brings forth revolutionary ideas that challenge the status quo, driving industries forward to the benefit of all stakeholders involved. This form of disruption reshapes existing landscapes through ingenuity and vision, often rendering outdated practices obsolete in the wake of improvement. However, there exists a nastier version of of disruption, one characterized by underhanded tactics aimed not at elevating the industry, but at destabilizing competitors for short-term gain. Such strategies, which I can’t help but refer to as ‘cheap shots,’ erode the foundation of trust and cooperation upon which partnerships operate. The reliance on sleazy business practices to induce market shifts is a clear indicator of a model that lacks genuine value or innovation. It is this distinction that separates the innovative from the greedy; whereas positive disruptors catalyze positive change through groundbreaking ideas, their counterparts seek only to disrupt for disruption's sake, exploiting the results, often at the expense of ethical integrity and long-term industry health.
In order to provide a more complete picture, we need to go back a few years. As you may have suspected, I’ve begun the story in the middle of things. To understand why opening hospitals represents a betrayal, an act of dishonesty, we need to talk about Chewy Inc., Petabyte Technology, the American Animal Hospital Association, and some recent history of veterinary medicine.
Chewy, Inc.
It’s not hard to find a veterinarian who doesn’t like Chewy, Inc. It’s harder to find one who does. And that’s not because veterinarians are all as grouchy and irascible as yours truly.
Chewy, Inc. has a long history of a bad relationship with veterinarians. Lately, they’ve tried to mend some fences through programs and outreach.
Chewy, Inc.’s tactics toward veterinarians have long been openly hostile and intentionally disruptive. I don’t mean “disruptive” in the Newspeak sense of the word; I mean it in the sense that they sought to interrupt the activity and process of operating a veterinary hospital by creating problems and disturbances.
Chewy would flood a hospital with faxes. Even today, using their online portal, I get at least one email daily. A notification email that I literally cannot turn off unless I block the sender or remove my email address from the portal.
Chewy would send a fax and simultaneously (or very nearly) contact the client to let them know that they’d reached out to the veterinarian, but the veterinarian hadn’t responded yet. They still do that with prescription requests through their online portal.
Angry phone calls from clients would ensue, with clients outraged and wondering why the veterinarian was refusing to approve their pet’s prescription, thus disrupting the workflow of the veterinary hospital. A rather scummy business tactic, in my opinion.2
Further, they’ve supported a federal law to mandate that veterinarians provide clients a written prescription for their pet’s medication unasked, and also to inform the client that they may get their pet’s medications anywhere. According to that bill, a veterinarian wouldn’t be allowed to ask the client to sign a waiver for the prescription either. If you can’t beat them, then join them lobby lawmakers until it’s a federal offense to disobey, I suppose.
And they’re big on telehealth, but haven’t managed to surmount those legal hurdles completely. Yet.
They’ve also been sued for failing to pay workers.
And they’ve sued their competition for diverting prescriptions that they feel rightfully belong to them.
They’ve been warned by the FDA about selling over-the-counter antimicrobials.
All in all, I think this makes for a long history of dicey business practices. They announce that they want to be the most trusted folks in the pet care industry.
With partners like this, who needs competition?
Petabyte: Rhapsody and more
In late 2019, Petabyte Technology was in the news for having raised $8 million for their startup. The founders, Tim Mahlman, Michael Hyman, and Alex Krooglik, sought to improve the existing practice information management software (PIMS). If a hospital uses anything but paper records, they use a PIMS. 28,000 small animal hospitals in the United States and everybody needs one. At the time, only about 10% of veterinary practices used cloud systems, instead they were paper records or server-based PIMS. And they were, as Mr. Krooglik described them, “glorified point-of-sale terminals that are essentially on life support.”
“Veterinarians deserve better,” said Krooglik in a GeekWire piece.
The Petabyte team had three key products. There was Boop, a digital practice companion and client engagement portal. There was Petabyte Analytics, a platform to consolidate practice data and facilitate analytics. And then there was Rhapsody, the PIMS at the center of it all.
Rhapsody aimed to fix the problems of the laggy, plodding systems of the late-1900s. A noble endeavor, to be sure. AVImark was, and is, a widely used system invented in 1988. Another PIMS, Cornerstone, by comparison, was created in 2002. These are two of the most commonly used practice management systems and account for roughly half of the market in veterinary medicine; one predates the iPhone by half a decade, and the other predates the fall of the Berlin Wall. Your iPhone gets an update every year, veterinary software often waits a bit longer for improvement.
The founders were onto something valuable and certainly filling a need with their creation. The genius of Mr. Hyman, Mr. Mahlman, and Mr. Krooglik was broadly applied, but it seemed particularly apparent in their pursuit of standardization of language in veterinary medicine. The software was solid and good at feeding the modern need for data in ways the old PIMS didn’t do very well (or at all). Moreover, the Boop app and Petabyte Analytics could bring existing and novel data together from different sources, allowing users of the software to glean insight about their clients that was previously impossible. Petabyte Analytics could consolidate the data from multiple sources and make it accessible to even business-clueless practice owners like me. Things were going well.
AAHA
I’ve been critical of some of AAHA’s work in the past, but they hold some esteem in the eyes of many American veterinarians, myself included. The organization is among the most recognizable professional organizations in the veterinary industry after only the AVMA.
AAHA is the American Animal Hospital Association. Founded in 1933, AAHA is among the few organizations to accredit companion animal veterinary hospitals in the United States and Canada. This accreditation process is voluntary and involves a rigorous evaluation against approximately 900 quality standards that go beyond basic state regulations. These standards encompass a wide range of areas, including patient care, diagnostic imaging, laboratory services, pain management, pharmacy, safety, surgery, client service, anesthesia, contagious disease, continuing education, dentistry, medical records, leadership, and emergency/urgent care. To maintain their accredited status, hospitals undergo comprehensive on-site evaluations every three years.
The fee associated with AAHA accreditation is relatively modest by “running an animal hospital” standards at a little more than $100/month per hospital. I’m not an AAHA member, and that’s only partly because I’m a grouchy, irascible pain in the ass. It's also because I don’t believe that the AAHA guidelines update quickly enough. It can be years and years between updates to their guidelines, which is a bit plodding for someone who is intent on doing good medicine.
Some examples:
Their Traditional Standards of Accreditation includes a section on pain management that reads, to me, a little bit too similar to the “pain as a symptom” rhetoric used by opioid manufacturers.
Some of the mentorship guidelines I find, as you might expect, rather flimsy.
It can appear as though some standards they are perhaps influenced by marketing rather than scientific sources. Their insistence on laser therapy and surgery lasers, for example.
In the interest of transparency, I should note that I also fall short of standards I consider legitimate in some ways. I don’t have a dedicated isolation room for contagious patients, for example, although we can create one. My staff and I often neglect eye protection when performing dental procedures, though we always wear masks and gloves. I refer to all my staff as “technicians” rather than only those who have passed national and/or state board exams. I don’t keep colloid fluids around because I can’t monitor a patient adequately in-house to use them safely.
My reasoning for some of these decisions has to do with the location of my hospital and its organization. I’m a solo practitioner with a relatively small staff. I don’t consistently have the manpower to operate a facility like the one described in the Traditional Standards of Accreditation. And because of my fortunate location, I don’t have to. There are a number of excellent tertiary care facilities within an hour’s drive of my practice, and even more if you include those that are simply adequate.
The world has changed since AAHA updated its standards—heck, the world has changed in the few short years since I opened my hospital. And keeping up with the latest and greatest in medical care takes a lot of time and effort. Further, I try to pay attention to the needs of my patients and clients and act accordingly. And finally, there’s a part of me that has always resented the notion that there’s only one right way to do things.3
In my opinion, some of AAHA’s accreditation standards fall short of current research and best practices. I am reluctant to build my hospital upon such protocols, but thousands of hospitals do so. Admittedly, it’s much easier to run a small veterinary hospital than to update a list of hundreds of medical standards, but I try to do it as well as I can.
Petabyte Technology Partners with AAHA
So well were things going over at Petabyte Technologies, that on 21 July 2022, the American Animal Hospital Association and Petabyte Technologies announced that they had teamed up to bring the veterinary community an updated version of AAHA Benchmarking.
AAHA Benchmarking is a big deal. How do we know what to charge for a dental surgery or a bottle of carprofen? How much should the placement of a catheter cost? What about a nail trim? AAHA would collect the data from their hospitals and synthesize it into guidebooks. Looking to set prices? The AAHA fee reference guides were a place to start.
More than that, these benchmarks would provide a perspective on the overall health of the profession and the industry. It was a way to coalesce the data of a fragmented industry into a clearer “big picture.” Useful stuff.
But now, with Petabyte’s tech, AAHA wouldn’t begging hospital owners and practice managers to update and adhere to the AAHA/VMG Chart of Accounts. They could just collect the data from as many hospitals’ PIMS as they could integrate, create much better guides, and collect much better information on the profession as a whole.
That standardization has a lot of potential to do good in the practice of medicine. It was a valuable thing for Petabyte to build and an important thing for AAHA to pursue.
Chewy Acquires Petabyte
In December 2022, Chewy acquired Petabyte for $43.4M. And there were serious concerns about the use of the data provided by practice owners to the AAHA/Petabyte partnership.
Impropriety’s been denied by folks at Chewy, of course, although many remain skeptical. On a webinar call this week, a Chewy representative stated that Chewy hospitals would be participating in Benchmarking+, and that Chewy would not be using the data for anything else. It felt contradictory.
At the risk of sounding credulous and naive, I happen to believe what I’ve been told: that Chewy isn’t using questionably obtained client or practice data in some nefarious or unethical way. I believe them that they’re not using it for much at all. But I’m also one of the guys who believed the Chewy representatives when they told me that they were interested in repairing their relationship with veterinarians, so maybe I’m a little bit credulous and naive.
The Petabyte/AAHA partnership is still available, though now through Chewy, Inc. If you sign up and participate - that is if you hand over your hospital data for their compilation - they’ll give you access to Benchmarking+. This request seems fairer when it’s made by a small tech company partnered with a professional organization than when it’s made by a company like Chewy, Inc.
AAHA was allowed a gracious exit from the contract that Chewy, Inc. inherited with the Petabyte acquisition, but Benchmarking is now owned by Chewy. Following a strong (and wholly predictable) backlash from its members, AAHA bowed out, though the money had been spent and “Benchmarking” no longer belongs to veterinarians.
This is just the latest in a long history of moves that elicit cynical reactions from veterinarians, and I think that’s part of the problem. The other part of the problem is how little Chewy, Inc. has done about it.
Chewy Vet Care
Back to the matter of Chewy, Inc building veterinary hospitals. I use the plural because hospitals have been announced in Florida and in Colorado, and one may suppose that the plan isn’t to stop at two. In digging around for enough information to develop an opinion about this, I had a phone call with a member of “leadership” at Chewy, Inc. She’s an accomplished professional with the education and the experience to be taken seriously. She told me about the history of Rhapsody and Petabyte Analytics and AAHA. She told me about all the initiatives Chewy has taken to improve its image and standing with veterinarians. She told me that she was calling to listen to my concerns.
She even sent me a painted picture of my dog along with a thank you note.4
Notably, on a call ostensibly to hear my concerns, I didn’t do the lion’s share of the talking.
She mentioned that Chewy’s pilot hospital will be placed in Plantation, Florida. A place that would not be entirely available real estate but for efforts to drain huge tracts of the Everglades - 2.9 million acres. Chewy’s headquarters and pilot hospital sit on habitable terra firma as the result of a massive, morally questionable, and ecologically disastrous effort to change the landscape permanently.5
Snowclones probably melt in South Florida, but I’ll try one anyway: Metaphor, thy name is Chewy.
We talked about some of the things that had happened between Chewy and the veterinary profession—the harassment and conflict-inciting tactics, the broken promises, and a variety of other actions. She pointed out that her employer had spent millions on a Veterinary Outreach Team and several significant initiatives to better the profession.
But one line in particular made an impression on me. While I wouldn’t typically share details of a private conversation, this oft-repeated phrase has stuck with me as emblematic of the attitude of the corporation for which said professional works.
She said that she was “not here to persuade me.” I’ve left the speaker anonymous and will keep it that way, but that phrase has lingered. It took me a long time to figure out why.
“Not here to persuade you.”
Another quote attributed to Horace is, “In an effort to be concise, I find myself obscure.”
Nice to know it happens to the best of us.
Chewy, Inc. is a company with a history of malicious and disruptive business practices designed to serve the company’s interests at the expense of its “partners.” Now, trusting in the short memories of our digital times and the work of good publicists, they continue to encroach upon the industry of veterinary medicine.
Has the company done positive things? Inarguably. Its actions and business practices are not uniformly evil or unethical.
However, Chewy’s guilt cannot be absolved, its transgressions forgiven, and its wrongs righted solely by investment in public relations campaigns and advertising. Its reputation within veterinary medicine can only be improved by actually doing good, operating ethically, and, I believe, atoning for previous misconduct. Justice cannot be achieved through persuasion alone.
We can blame my approximately Catholic upbringing for being hung up on atonement, I suppose, but building trust is not a matter of convincing with words.6 Trust is built over time through consistent, reliable, decent action. A person or company cannot be considered ethical if its ethics are inconsistent.
In over a decade of being in this field, consistent, reliable, decent action from Chewy towards me and other members of my profession has been absent. While I have met individuals who work at the company who are kind and friendly, bright and accomplished, and I believe them to be decent people who have done good in addition to doing well, the corporation’s behavior has not been consistent with the behavior of those people.
Perhaps the gap between persuasive words and persuasive action is what the accomplished professional from Chewy’s leadership sought to point out to me. I hope it wasn’t to throw up her hands at the fact that she was just being polite in calling me, under the assumption that once I’m made to feel “heard,” I’ll punch myself out, get bored, and move on.7
However, despite my overall negative opinion of Chewy, Inc., I don’t believe that they did anything wrong in their acquisition of Petabyte Technologies. They acquired a useful software company. That’s a completely normal and ethical course of action.
An Informed Opinion
After a lot more research and work, I’ve come to what I feel is an adequately informed opinion: I do not believe that Chewy is using patient data from AAHA Benchmarking to guide its decision to enter the veterinary services market or to provide itself with an unfair advantage over other hospitals.
They simply don’t need to.
First, the obvious: I started a veterinary hospital in the last few years and I didn’t need a mountain of data to convince me to do it or to convince a bank to give me a loan for it. Bond Vet raised $245M without such data. Modern Animal raised $89M. Small Door raised $63.5M. Heart and Paw had big news this past month as well.
It’s no crime to start opening veterinary hospitals, and I don’t believe that Chewy is doing so because of super secret client/patient data provided by veterinarians. Opening hospitals is a good idea, and folks from the uber-wealthy to the relative paupers8 seem to think so.
Second, veterinarians and pet owners have already turned over massive amounts of client and patient data through Chewy’s PracticeHub. Chewy launched a new online portal in September 2021, and its marketing centered on being a trusted place to do business, emphasizing a desire to repair its relationship with veterinarians.9
The PracticeHub has way more data than the AAHA Benchmarking could’ve collected, and there’s no need or focus at Chewy, Inc. to act like the PracticeHub users aren’t Chewy, Inc. customers.
While I don’t believe Chewy needed to do something ethically questionable with Benchmarking data in order to open veterinary hospitals, I do believe that Chewy opening veterinary hospitals is ethically questionable. And I believe it for one simple reason: they promised to be partners, and partners are not competitors. The implicit promise of partnership is mutual benefit, shared profits and losses. That promise is broken when one partner opts unilaterally to amend the partnership in order to infringe on the other’s opportunities.
Chewy Vet Care represents a broken promise to veterinarians, supposedly their partners. It is a move that announces clearly that Chewy, Inc. does not respect the work and territory of the veterinary industry.
Just like past centuries’ Floridians who would drain millions of acres of Everglades in one decade only to see the Arbor Day Foundation name them the nation’s first Tree City in another, Chewy, Inc. seems to pursue tactics that will negatively impact the veterinary profession while also announcing that they’re taking credit for making things better.
As I proofread this article, I notice an unintentional theme: the frequent and troubling gap between what is said to veterinarians and what is done to veterinarians. Anecdotes and news reports of promises broken, partnerships abandoned, and commitments unfulfilled abound in our profession. I wonder and worry about what “disruptive tactics” Chewy, Inc. will take in its new venture into veterinary care. I do not have faith in their promises of partnership, their aspirations of trustworthiness, or the ethical behavior of the corporation. With their latest venture, I expect to experience the nastiest and most vicious disruption that the accomplished professionals at Chewy, Inc. can dream up.
I hope they don’t, though. I hope they try to make everything better.
In the meantime, saying isn’t doing, and when words and actions don’t align, we are right to be wary and to distrust.
Author’s Note:
I’ve included a lengthy footnote as to my opinion on the actions of AAHA leadership in the process. While I don’t believe in everything that AAHA recommends in their Traditional Standards of Accreditation, I do believe in the leadership motivations that drove the decision to partner with Petabyte.10
An astute and erudite reader pointed out my failure to use correct Latin grammar in quoting the poet. I have amended the text from “in media res” to “in medias res.” The nuns ought to have rapped my knuckles harder. Mea culpa.
Reddit is far from the most reliable source on the internet, so take it with a grain of salt, but I’ve worked at hospitals where this and other similarly disruptive activity occurred.
You may verify this by inquiring any number of frustrated authority figures in my life whose instructions were met with, “Okay, but why?”
I sent the picture back with a thank you note of my own. While the gesture was a nice one, I wasn’t comfortable accepting the gift.
Plantation is a city in Broward County, Florida, that was once more or less uninhabitable. That is until the governor of Florida, William Sherman Jennings, decided to drain the Everglades. After draining 2.9 million acres of wetlands at the turn of the century, the city was designated the first “Tree City” by the Arbor Day Foundation in 1980.
“Will” is not just a name. It’s a noun and a verb.
Yours truly, for example.
Yes, I fell for that one too.
AAHA Moments
I don’t believe AAHA did anything too terribly wrong in partnering with Petabyte Technologies. I don’t think they misappropriated member funds. I don’t think any AAHA leaders behaved irresponsibly, foolishly, or recklessly.
Trying to make things better occasionally results in failing to do so. That is a fact of life. Failure is the mark of a life well-lived and an organization well-led. Everything will not work all the time.
One of the attorneys hired by AAHA to do the deal with Petabyte Technologies probably should’ve accounted for what would happen if Petabyte was acquired by a corporation with a bad or unpopular reputation. That’s really the extent of my criticism: find better legal counsel.
But we all must live and learn. Their mistake was neither of the bank-breaking nor catastrophic variety. I hope it will make the AAHA leadership a bit more canny in their next venture.
I hope it will not make them less bold.
Leadership is the art and act of making people better, and I do believe that is exactly the spirit in which AAHA’s leaders acted. Benchmarking is important and valuable to the profession. I hope they will continue to pursue this and other big ideas with similar enthusiasm, optimism, and perspicacity.
In the fact of corporate interests that would see the death of the profession as we know it, we need courage and boldness of leadership more than ever.