The veterinary medical industry is said to be recession proof, a reputation earned from minimal damage suffered in past economic downturns. It even has seen notable growth during times other industries struggled to stay afloat.
But in reality, veterinary clients are the same Americans featured in daily news reports—people losing their jobs and cutting family budgets.
If a practice is feeling the pinch, it’s because clients are feeling it, too. Demographics, client base and a practice’s focus tend to be the top factors in a clinic’s ability to withstand the turbulence.
Depending on their location in the U.S., veterinarians report either troubling times or business as usual. Practices that offer grooming, nail trimming or pet supplies are seeing a drop in revenue. Those that focus on vaccinations, spay/neuters or high-cost specialty services have similar issues.
“Specialty and emergency care is being affected more than primary care practices,” says Ted A. Sprinkle Jr., DVM, CEO of New York-based Pet Partners LLC. “I own 20 primary care facilities from Maine to Florida and as far west as Denver. Each practice is being affected differently.
“The veterinary industry hasn’t been as affected as others, but it has been hit harder than initially projected. Practices doing well are staying afloat through good client communication and good management.”
As veterinarians evolve with their client base, they should make sure to educate clients about the importance of some services that might be considered a luxury, but in reality help with compliance.
The fact that many veterinary practices operate on a cash basis, and in general spend conservatively even in good economic times, puts the industry ahead of the curve. Despite the positive forecast, some veterinarians are uneasy about their finances.
“We’re all concerned about patient care and well being,” says Jim Johnson, DVM, medical director of VCA Associates in Pet Care Hospital in Waukesha, Wis. “But we’re also worried about maintaining the employment of our support staff as well as our professionals. If our increase in patient visits increases, we’ll all be healthier.”
Even before the nation’s economic decline, a shift began in client purchases of products such as flea control and heartworm preventives. Clients willing to provide such products for their pets are finding Internet prices that vets can’t compete with.
“Even more than in the past, clients are looking to save money and are going online to make some veterinary product purchases,” says Emily Roberson, DVM, who owns the Animal Hospital of East Davie in Advance, N.C. “Pet supplies have really lost their appeal in the veterinary office. I didn’t sell a single pet toy at Christmas time, and it awakened me to see that I need to eliminate that and focus strictly on medicine and surgical skills to promote my practice.”
As veterinarians evolve with their client base, they should make sure to educate clients about the importance of some services that might be considered a luxury but in reality help with compliance, DVMs say.
“Compliance has always been a serious issue in the industry,” Dr. Sprinkle says. “Many years ago veterinary medicine was based on spaying, neutering and vaccinating pets, but now it is much more than that.
“Practices that still follow that old model are the ones that are having problems. Right now, many clients are seeing those types of services as nice to have instead of need to have, and that’s what’s being cut out.”
Good management and responsible spending have led veterinarians through past financial difficulties. Some say buying a long-wanted piece of equipment may have to wait to ensure a practice’s longevity.
“Everyone is feeling this economy no matter who they are,” Sprinkle says. “To say the profession is recession proof is unwise. Clients are choosing euthanasia or giving pets away to shelters instead of paying for more costly procedures. Euthanasia as a service has gone up during the past 18 months. No one has an extra few thousand dollars laying around to pay for procedures.”
Veterinarians who weathered previous recessions say less client hesitation to treat dental issues and renewed interest in non-emergency care such as grooming will signal an improving economy.
If clients are less free with their money, so are veterinarians.
“Some of my practices have set up donations for clients who cannot afford to pay for the most critical veterinary care for their pets,” Sprinkle says. “Veterinarians are compassionate people, but good business practices make them draw the line at some point in order to protect their business.”
Looking for bargains can help a practice’s bottom line, too.
“Advantage is offering buy six months, get two months free,” Dr. Roberson says. “Clients love to see they are getting a good deal. Many clients have said they are watching what they spend because they are worried about getting laid off.”
Veterinarians have noticed clients doing more self-medicating of pets at home as well as more vaccinations being administered after the due date.
“Many clients are combining visits instead of coming in for the first thing that goes wrong with a pet or when just one vaccine is due,” Roberson says. “In March I saw an increase in revenue greater over the same time last year. I wonder if people are getting tax refunds or if they are lightening up on spending.”