Specialty veterinary medicine has blossomed over the past 10 years, mainly because the human-animal bond has become stronger.
However, as veterinary hospitals begin incorporating specialized care into their practices, they are not finding the balance between specialist compensation and allowing the practice to thrive, according to a new study by Veterinary Specialty Practice Alliance.
The group comprises 18 veterinary specialty hospitals and about 10 percent of veterinary specialists in private clinical practice.
“Many hospitals are trying to hire specialists and specialists have many choices,” said Brent Calhoun, DVM, of Michigan Veterinary Specialists in Southfield and Auburn Hills, an alliance member.
“This competition is causing some businesses to offer compensation that cannot be maintained with the demand for services and the willingness of pet owners to pay for such services.”
“You’re seeing practices growing quickly and building large facilities and investing in expensive equipment and then realizing the profitability to support that investment just isn’t there,” said Darryl Shaw, CPA, MBA, treasurer of the alliance and chief executive officer at Florida Veterinary Specialists in Tampa.
Compensation standards already exist in general veterinary practices, but because the specialty field is so new, data hasn’t been available until now.
The alliance’s study found that some practices have compensation ranges from 25 percent to 33 percent of clinic revenue. Shaw said this is not a sustainable rate.
“Ultimately, when it comes time to reinvest in the staff, benefits, equipment and facility, the funds will simply not be there,” he said.
This trend can affect the consumer, making specialty care unaffordable for pet owners, Dr. Calhoun said.
The norm for specialty veterinary compensation should be about 22 percent to 23 percent of the clinic’s revenue, according to VSPA.
“No one is complaining that the compensation in dollar terms is too high or that specialists are being paid too much,” Shaw noted. “It’s looking at the overall percentage from a business perspective on an ongoing sustainable basis.”