About half of veterinary practices in the United States are in questionable health, judging from results of a new survey that found a sizable proportion of clinics experiencing declines in patient visits and net revenues.
In the poll, conducted in May as part of the Bayer Veterinary Care Usage Study, 51 percent of respondents reported a net decrease in visits over the past two years, compared with 34 percent reporting a net increase in visits.
On the revenue side, 42 percent reported a net decrease in 2010 compared with 2009. Revenues increased for 47 percent, while 11 percent were unchanged.
Although the figures suggest that a majority of practices are bringing in more money or at least holding their own, John Volk, a Brakke Consulting senior consultant who designed and managed the study, said the overall picture is not encouraging.
“When you see 42 percent of your population expressing decreases in net revenues, I don’t think that’s good news,” Volk said.
The poll of veterinarians was the last phase in a study sponsored by Bayer Animal Health to examine why visits to veterinarians are decreasing even as the pet population grows. In addition to Bayer and Brakke, research partners were the National Commission on Veterinary Economic Issues, Ipsos Forward Research, Kansas State University, Southern Methodist University and Texas Christian University.
The poll was small but targeted: Respondents were 401 clinic owners whose demographics match those of practice-owner members of the American Veterinary Medical Association (AVMA), to which most veterinarians belong.
Findings from the survey were described today during an annual conference of the AVMA in St. Louis.
Dr. Cristiano von Simson, director of veterinary services at Bayer Animal Health, said the study came in response to a variety of reports over the years pointing to a decline in veterinary visits. A chief goal of Bayer’s research was to figure out why pet owners are staying away and identify ways to make it easier for them to bring their pets to the veterinarian, he said.
An earlier phase of the research
involving a poll of and focus group discussions with pet owners found five factors behind declining visits (beyond the national economic slump): The Internet, cost of care, fragmentation of veterinary services, perception that regular medical checkups aren’t necessary and cats’ resistance at being rounded up for a trip to the doctor.
The survey of veterinarians identified four attributes commonly associated with those practices enjoying increased visits:
• Clients see the same veterinarian at every visit
• Wellness exams are regarded as one of a practice’s most valuable services
• Marketing and advertising are a key part of the business strategy
• The practice actively uses social media (such as Facebook)
Attributes common among those experiencing a decline in visits were:
• A belief that advertising undermines the veterinarian’s credibility
• A lack of referral arrangements with other pet-service providers
“There are a lot of other variables in the study,” Volk said. “I’m not saying these are the only things that are important. But these were common among the two groups.”
One survey finding Volk said he found shocking was the level of competition experienced by veterinarians. Asked how many potential competitors were in a given clinic’s “trade area,” the average response was “15.” The potential competitors were identified as other independently owned clinics, corporate-owned clinics, mobile clinics, pet store clinics, specialty-referral clinics and shelter and/or other low-cost, limited-service clinics.
Of those, the number of independently owned clinics far outnumbered the rest: The average respondent counted 9.6 other such clinics in his or her “trade area.”
“That is pretty stiff competition,” Volk said. “It’s not just fragmentation; it is proliferation.”
Among the other potential competitors, specialty-referral clinics were identified by poll respondents as being of minimal concern, while their greatest source of concern was low-cost, limited-service clinics, Volk said.
The poll also found that, on average, 62 percent of available appointments were filled in the first quarter of 2011 — suggesting that more than one-third of veterinary capacity in the country is unused.
Perhaps trying to make up the difference, most clinic owners polled said they had increased their fees by an average of 4 to 5 percent in the past two years. Indeed, 56 percent increased fees in both 2010 and 2011.
And yet, “It’s clear that some of the fee increases ... are driving clients away...” said Dr. Karen Felsted, a veterinarian and accountant who heads the NCVEI, pointing out that 49 percent of veterinarians reported that clients increasingly complain about fees.
“Fee increases are not the only way to improve profits,” she said, offering as alternatives drawing more clients through the door, increasing efficiency and controlling inventory.
In fact, lowering fees in specific instances may be equally or more successful, she suggested.
“We’ve operated on the assumption that ‘discount’ is a bad word, yet ... every successful business uses discounting to drive behavior and practices,” Felsted said, noting that some practitioners offer promotional discounts to draw new clients, lapsed clients and clients who have just adopted a new pet from a shelter, among other strategies.
Other ways to help clients with veterinary expenses, the researchers said, is to offer wellness plans and/or annual health plans billed monthly, and to provide information on third-party financing programs.
The study also identified a communication gap between clients and veterinarians. Although 88 percent of veterinarians told pollsters that they completely or somewhat agreed with the statement “I talk my clients through the exam, explaining what I am doing in detail,” clients don’t feel the same way, Felsted said.
In the earlier survey of pet owners, 56 percent indicated they often left the clinic confused.
“There is a clear disconnect between what veterinarians think they are doing and what pet owners are hearing,” Felsted said.
Further, although veterinarians overwhelmingly expressed a willingness to change their practice operations if they knew it would increase client satisfaction, Felsted said, only 6 percent completely agreed with the statement “We routinely measure client satisfaction through after-service surveys.” (Fourteen percent somewhat agreed with the statement.)
“You simply can’t know unless you ask,” Felsted said.
Volk added that not every suggested change will work for every practice. “Keep trying new things,” he urged. “There’s not just one pet owner out there. Different types of pet owners will respond to different things.”