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State of the Profession
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AVMA workforce study nixes notion of veterinary shortage
4/24/2013
Report calls on practitioners to increase public's demand for services
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New York Times article rocks veterinary profession
3/18/2013
Crises aired on national stage generate mixed reactions
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Final destination for Ross veterinary students — Buffalo?
3/7/2013
Abandoned medical facility could become veterinary teaching hospital
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Influx of veterinary colleges on horizon
1/26/2013
New programs give rise to supply and demand questions
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BVA fears new school could create surplus of UK veterinarians
11/15/2012
University of Surrey plans to open veterinary school in 2014
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‘The Incredible Dr. Pol’ asserts innocence despite board discipline
10/8/2012
Star of reality TV show placed on probation
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Veterinary visits up but pet ownership down
8/10/2012
New AVMA survey results offer mixed prospects for profession
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Can MDs and DVMs bridge the cultural divide?
7/24/2012
Physician champions concept of 'zoobiquity'
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Study: No widespread shortage of veterinarians
5/30/2012
Veterinary presence needed in public health, agriculture, food safety
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No simple answers on supply and demand in veterinary profession
5/29/2012
Workforce data outdated, conflicting
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Labor Department job outlook for veterinarians: 'Overall ... good'
3/29/2012
New occupational profile less upbeat on small-animal practice, however
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Private university in Arizona plans new veterinary school
3/8/2012
Midwestern University cites shortage of rural practitioners
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Labor Department maintains rosy outlook for veterinarians
2/1/2012
Jobs projection contradicts view of many practitioners
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Student debt relief option: Instant gain, distant pain
1/4/2012
Pros and cons of Income-Based Repayment
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Independent voice of digital radiology silenced?
10/13/2011
DVMInsight's sale to Idexx viewed by some as contradiction
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Anniversary inspires veterinary history commemoration
8/18/2011
National Library of Medicine exhibition highlights equine medicine
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Out of the frying pan, veterinarians mix economic uptick with uncertainty
7/28/2011
Increased competition likely to blunt recovery for veterinary clinics
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AVMA task force to review merits of foreign accreditation
7/20/2011
Resolution stripped of economic language on advice of AVMA lawyer
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Dream of veterinary career deterred by school expense
7/7/2011
Student couldn’t justify cost of education
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Tight job market squeezes large-animal veterinarians
6/27/2011
Some say shortage of food-supply practitioners is over
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Tough job market compels dogged hunt by new veterinarians
5/19/2011
Fewer grads enjoy luxury of multiple offers
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Federal bill tackles rural veterinary shortages
5/13/2011
Veterinary Services Investment Act to be introduced
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Report: unprecedented change in store for AVMA, profession
4/28/2011
'Continuous improvement' prescribed for nation's largest veterinary association
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New Utah veterinary education program wins approval, funding
3/11/2011
Plan stirs concerns about a potential oversupply of practitioners
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NAVMEC addresses great challenges facing veterinary profession
3/8/2011
Economist's call for change goes beyond NAVMEC recommendations
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Veterinary student debt continues to climb
1/4/2011
Despite years of concern, solutions remain elusive
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Debt problem is everyone’s
1/4/2011
Most student loans financed by taxpayers
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Out of the frying pan, veterinarians mix economic uptick with uncertainty
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July 28, 2011
By: Jim Downing
For The VIN News Service
Corporate practice proliferates  Click here for larger view
"We've rounded the bend," said Jon Dittrich, a practice management consultant in Knoxville, Tenn. "I think we're still going to see improvement this year. But I don't know when we're going to get back to positive."
Dittrich's Bow Wow Jones index, a quarterly survey of 50 practices across the country, shows that year-over-year clinic revenue continued to fall in 2011, as it has since late 2008. But the decline has been slowing: In the first quarter of 2010, revenue was down roughly 8 percent, while in the first quarter of this year it was down 5 percent.
In the years before the downturn, by contrast, veterinary clinics were averaging revenue increases in the range of 6 percent to 7 percent annually, according to Dr. Karen Felsted, director of the National Commission on Veterinary Economic Issues.
Dittrich, Felsted and others said clinic performance is strongly correlated with local economic conditions and varies widely across the country. The May 2011 Gatto McFerson survey of 165 California clinics, for instance, found that average revenue statewide was up slightly — around 1 percent — for the year to date, a small improvement over 2010. The study contains a large number of clinics in urban areas where the economy is relatively strong.
"Practices that are in the Bay Area or LA County, closer to the hub of the city, are doing better," said Tom McFerson, a partner in the practice management firm.
With spending on veterinary care linked closely to the overall health of the economy, it's little wonder that many clinics are still struggling. Nationwide, discretionary consumer spending — which includes nearly all spending other than food, housing and health care expenses — is nearly 7 percent below the 2007 level and shows no signs of significant recovery, according to a recent Federal Reserve study examined by The New York Times. That drop is by far the worst since World War II. In the recession of the early 1980s, by contrast, discretionary spending dropped 2.9 percent.
In areas hit hardest by the housing market crash, like Florida and inland California, the economic collapse has been even more severe.
Dr. Eric Orr, who bought a then-thriving two-doctor practice in Orange City, Fla., in 2007, saw his revenue plummet after the local economy seized.
"By summer 2008, it was in freefall," Orr said. "Probably 25 percent of (pet) owners were just requesting euthanasia. They were declining any kind of diagnostics or treatment."
Corporate-owned veterinary chains have felt the contraction as well. At VCA Antech, which operates the nation's largest collection of stand-alone clinics with roughly 530 locations, same-clinic revenue fell 2.5 percent in 2010 and 3.2 percent in 2009 after growing 0.8 percent in 2008 and 5.2 percent in 2007.
Still, that headwind has not kept VCA and rival Banfield The Pet Hospital from expanding throughout the downturn (see chart, above). VCA grew by 90 practices from 2007 through 2010, according to public filings, and in July announced a roughly $50-million deal to acquire the nine-clinic Brightheart chain based in the New York area.
Privately held Banfield does not disclose financial details. But annual reports for PetSmart Inc., which hosts nearly all Banfield clinics, track the chain's growth. From 2007 through 2010, Banfield opened 84 clinics in PetSmart stores, pushing the total number of clinics past 750.
By comparison, the total number of veterinary clinics nationwide is roughly 26,000, according to the American Animal Hospital Association. Approximately three-quarters of those clinics are staffed by 2.5 veterinarians or fewer, Felsted said.
While falling consumer spending may have pulled veterinary revenue down in 2007 and 2008, Felsted and others said that when spending revives, business at many clinics might not bounce back proportionally. That's mainly because of several long-term changes underway in the profession.
Low-cost online pharmacies for veterinary medications have come of age during the last decade, pulling pharmaceutical sales away from clinics. The number of companion-animal veterinarians and clinics continues to grow, spreading client dollars over a larger number of practitioners. Veterinarians and consultants also cite the growing presence of free and low-cost veterinary service providers, such as tax-subsidized and nonprofit shelters that offer many medical procedures routinely carried out during an animal's first year of life. For private clinics, Felsted said, these providers create stiff competition for new patients.
"When you miss that first year, you lose that opportunity to build that relationship with the client," said Felsted. From a revenue standpoint, she said, "that's almost worse than the fact that you didn't do the first series of vaccinations."
Felsted said she didn't know of any figures on the rate of growth in shelter-based veterinary care but that anecdotal evidence suggests that it is a growing presence.
The impact of the growing presence of large veterinary chains is difficult to quantify, experts said. Dittrich noted that VCA tends to set its fees higher than private clinics in its vicinity, so direct price competition is not necessarily an issue. One area where the chains excel, Dittrich said, is in getting clients to bring pets in for regular visits, such as wellness care offered via monthly payment plans. While a number of services exist to help smaller practices set up similar programs, Dittrich said, most small clinic owners don't have comparable offerings.
For practice owners navigating the evolving landscape, consultants had straightforward advice: Trim costs where possible and focus on practicing excellent medicine and building lasting client relationships.
Dr. Robert Knapp, who owns a 6.5-veterinarian clinic in Columbus, Ohio, said his client numbers are down 15 percent from 2007, with no sign of a serious rebound. He has stayed afloat and avoided laying off staff by cutting costs in a variety of ways. He whittled the clinic's inventory of supplies and pharmaceuticals, hasn't replaced staff members who have left the practice and has cut back on pay raises.
In a telephone interview, Knapp was optimistic about his practice's long-term viability, even as he recognized that some segments of his business, like pharmaceutical sales, probably aren't coming back.
"We understand that's not going to be a significant source of revenue in the future. That ship has sailed," he said.
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