Medical and wellness care prices spiked in the first half of 2015, reversing six years of flat to negative growth in the U.S. veterinary market, according to a new report from Nationwide pet health insurance.
The analysis, released in January at the North American Veterinary Community conference, showed that even with the annualized 5.1 percent jump, prices rose by only 0.1 percent overall from 2009 to mid-2015. A previous report had found a 1 percent decline through 2013.
The numbers contrast with those of the U.S. Consumer Price Index, which revealed a 15 percent rise in veterinary prices through 2013 and an annualized 2.7 percent increase in the first half of 2015.
Nationwide, based in Brea, Calif., sees its data as a more accurate reflection of the market. Federal canvassers call a relatively small number of veterinary practices to collect price information, the company noted, while Nationwide based its data on more than 6 million insurance claims filed since 2009.
The study looked only at services for dogs, the bulk of Nationwide’s business. The company collaborated with the Purdue University Krannert School of Management to produce the report.
Why prices rose in early 2015 is difficult to ascertain. Company officials thought the previous decline may have been recession-related, but they weren’t sure.
“You can hypothesize,” chief veterinary officer Carol McConnell, DVM, MBA, said of the new findings.
“Is it during the recession that veterinarians were less willing to push ‘Treatment A,’ doing all the tests?” she said. “Or was it veterinarians were feeling sorry for people and discounting? Or was it the consumer less willing to pay?”
The cost of wellness care actually climbed by 12 percent since 2009, Nationwide acknowledged, but overall prices were trimmed by a 3.3 percent decline in the cost of medical services. Medical prices made up ground in early 2015, rising by 5.6 percent compared with 3.8 percent for preventive care, according to Nationwide.
The 6½-year run may have benefited veterinary practices and clients at different points. Hospital revenue appears to be climbing, and dog owners enjoyed years of stagnant prices for the most part.
“For the consumer it’s almost a wash at this point because we just came back to the same plane of zero,” said Gina Spadafori, a Nationwide communications consultant. “The next report, six months from now, should be really significant because it will say if this is the correction everyone was anticipating or if this is going to be a continuing trend.
“If it’s going to be a continuing trend, then you get some pushback from the consumer.”
Nationwide pet insurance’s president, Scott Liles, MBA, lobbied for the study to be conducted, said Kerry O’Hara, Ph.D., the director of research, data and strategy.
“We view ourselves as a partner to the vet industry, and part of that partnership is giving something that everyone can learn from,” O’Hara said.
The next update, which will account for all of 2015, is scheduled for release in August at the American Veterinary Medical Association convention.