Veterinarians have seen the future and it doesn’t look all that good.
A study commissioned by Veterinary Pet Insurance of Brea, Calif., found that many veterinarians are pessimistic about the financial health of both their practice and their personal life.
Veterinarians in many cases are confronted with a triple whammy: onerous student debt, fewer patient visits and paychecks that don’t come close to paying the bills. In fact, the survey of 1,193 veterinarians discovered that one-fourth of practice owners and 30 percent of associates rated their personal financial condition as poor.
The study, conducted with the assistance of Brakke Consulting of Dallas, and also sponsored by Veterinary Economics, was designed only to measure veterinarians’ financial standing, not identify ways to eliminate the red ink.
"It’s not about solutions, it’s about developing a foundation so we can work together to create solutions for the betterment of the industry,” said VPI President Scott Liles.
Practice owners are financially the healthiest, for the most part, according to the study. They take home an average annual income of $109,000—compared to $84,000 for associates—and possess a monetary stake in the clinic. While one-third of practice owners reported their hospital was doing well, the same proportion thought the opposite.
Only one-third of practice owners contemplated a comfortable retirement income upon the practice’s sale.
Twenty-seven percent of all practice owners thought they would have to delay retirement because of current conditions, and about twice as many were working longer hours because the practice needed the revenue.
Selling the practice was a question mark for many owners because they didn’t know who could afford to buy it. Forty-four percent of associates expressed a desire to become an owner, but few thought they would have the financial means to pull it off.
The hesitation in owning a practice was rooted in student debt. Forty-nine percent of associates were paying off school loans, with an average balance of $112,000 that in some cases consumed 40 percent of their monthly income.
Among other findings:
* The average practice owner was 50 years old, compared to 42 for associates.
* 7 percent of practice owners and 34 percent of associates were age 35 or under.
* Household incomes average $187,000 for practice owners and $138,000 for associates.
* Practice owners had nearly $398,000 in personal investments. The average for associates was almost $195,000.
* 22 percent of associates had no idea how the practice was performing financially.
* Half of all practice owners were paying off business loans, with an average debt of $362,240.
The authors called the results evidence of a "profession on the brink of seismic shift.”
"Associate veterinarians need to be provided with a better understanding of personal financial choices,” they recommended, "and practice owner veterinarians need to re-evaluate time-honored ways of doing business.”