SPCA $15 million venture alarms area specialists

San Francisco-As the San Francisco Society for the Prevention of Cruelty to Animals (SPCA) expands with a $15 million specialty referral center set to open late next year, local practitioners fear the nonprofit's tax-exempt status and fundraising perks will choke area small business.

Dr. Dick Schumacher

The uproar has prompted the California Veterinary Medical Association (CVMA) to step in with lawyers exploring the legitimacy of the nonprofit's deal.

Last month, CVMA House of Delegates voted to oppose the SPCA's venture, known as the Roberts Medical Center, on behalf of specialists calling for an economically level playing field, says Executive Director Dr. Dick Schumacher.

"This issue revolves around the tax implication of a nonprofit abusing its mission to develop a for-profit business and prescribing it as a charitable (business)," Schumacher says. "This is not in the SPCA's nonprofit plan as I see it."

Confusion feeds discord

But SPCA officials claim the dissention is a product of misunderstanding.

While the project appears seamless to the public, presiding under the SPCA umbrella, it's internally made up of distinct nonprofit and for-profit parts. The $15 million pays for the shell and basic infrastructure of what's to be a "world-class facility," explains Dr. Jeffrey Proulx, SPCA director of veterinary services and Roberts Medical Center chief of staff. From there, contracted specialists will lease space to run for-profit practices with SPCA's nonprofit general practice at the facility's center. Those on board will spend roughly $3.2 million in private dollars to outfit their offices, he adds.

Under the SPCA Umbrella

Outsourcing specialty departments is new to veterinary medicine, but common in human practice, Proulx says, adding that each arm of the project has its own mission statement, open to change at any time. As for the backlash, he's not surprised.

"Veterinarians are in general apprehensive," Proulx says. "They're worried about the bottom line, their pocket books. We have a commitment to work with general practitioners in the area, not to take business from them, but to complement their businesses."

Alienating specialists

But the animosity stems from more than perceived tax freebies. Those critical of the Roberts Medical Center cite irregularities in the SPCA's aggressive fundraising for the expansion as it simultaneously cuts services for the indigent and homeless. What's more, the group's billboard and radio advertisements are a "slap in the face" to area specialty practices, touting the Roberts Medical Center as San Francisco's only multidisciplinary referral hospital, adversaries claim.

"What they say in those ads is simply not true," says Brad McCall, executive director of Bay Area Veterinary Specialists. "The SPCA is using a Madison Avenue-kind of approach. There's nothing I've seen in their ads concerning the indigent pet population, no leads for unwanted pets.

"This is about their new hospital, what they call 'the cat's meow.' This is big money. I know they didn't have some volunteer think that one up."

Proulx defends the advertisements, pointing out that no area specialty referral hospital runs the disciplines, general practice and critical care center proposed for the Roberts Medical Center. He explains the service cuts as "a little belt tightening."

"Like all nonprofits, we went through staff reductions because of the economy," he says. "We stopped testing for feline leukemia because it's not an effective way to manage cat colonies, and we think we should focus our efforts on spays and neuters.

"We have to prepare for hard times, but we still need to plan for our future. The Roberts Medical Center provides SPCA with new revenue stream that is recurring and not affected by the economy."

Call to arms

It will likely affect Dr. Carlo Vitale's practice, San Francisco Veterinary Specialists, Inc., which is scheduled to move two blocks from the SPCA's new site. The multi-specialty hospital and critical care center currently supplies 90 percent of the city's services.

Vitale, a dermatologist, says he doesn't mind a little competition, but the "huge marketing blitz" coupled with the SPCA's tax-exempt status is simply unfair.

"Clearly the client they're catering to is the wealthy client referred by general practitioners," he says. "We take offense. This is major unfair competition.

"Can you imagine the number of cases that will be lost just to general practitioners? This is borderline illegal. It's got to be."

On the defense

It's not, says Dr. Dwight Gaudet, one of 12 veterinary surgeons with Veterinary Surgical Associates, the largest practice of its kind in the country.

With three locations in the Bay area, Gaudet says his practice is moving into the city, opening shop at the Roberts Medical Center. His colleagues are enthusiastic, he says, asserting that aside from cutting rent checks to SPCA, the center location won't run any differently than other Veterinary Surgical Associates for-profit practices.

"The unknown is pretty scary, and that's understandable," he says, "but I don't think the concerns about unfair competition are warranted. Specialists in San Francisco won't be competing with the SPCA, they'll be competing with the specialists working within the SPCA.

"This is a very common model in human medicine. It in no way puts us in a position to benefit from this nonprofit in some unfair fashion."

Inside Roberts Medical Center

Once a beer warehouse, the 60,000-square-foot facility adjacent to the current SPCA building in downtown San Francisco soon will open its doors as the Roberts Medical Center.

Much of the SPCA hospital, the city's largest full-service clinic since opening in 1939, will go with the move and serve as the heart of what's destined to "change the practice of veterinary medicine," organization officials claim. The hospital, relying on tax breaks, donations, grants, bequests and fees to supplement its $1.1 million annual budget, will continue to provide low-income residents with free services or large discounts. The subsidized charity work makes up a third of the hospital's revenue, which is supplemented by the general public.

Ancillary services within the center include a private pharmacy, national laboratory hub and rehabilitation center. The specialty veterinary hospital will run a 24-hour critical care center as well as practices in internal medicine, surgery, ophthalmology, dermatology, radiology, oncology, neurology, cardiology and physical rehabilitation. The center also will offer a healing garden, park, CT and MRI scanners and space for continuing education.

Critics call the expansion a "giant palace," but Proulx says it's a new model for veterinary care, necessary for growth in the profession.

"What I wish they would see is a way we can collaborate," he says. "I understand there will be apprehension and concern, but it's disheartening. People pointing fingers at us need to have some faith and openly communicate with SPCA."