The Current State of the Veterinary Practice Industry
In a world where our furry companions hold a special place in our hearts, understanding the financial landscape of the veterinary industry is crucial for both pet owners and industry professionals alike. In this blog we will touch upon the current financial conditions and trends shaping this growing sector.
Today, the veterinary care industry consists of 32,100 companies that employ 440,900 workers and generates $57 billion annually. A typical single practice employs 14-15 workers and brings in $1.7 million in annual revenue. And the good news for pet owners is that there is no news of this slowing down anytime soon.
According to Interindustry Economic Research Fund, Inc., sales for the US veterinary practice industry are forecast to grow at a 6.16% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy.
A new report by Brakke Consulting found that veterinary practice revenue grew 5.2% year over year in 2022, while visits fell by 3.1%, according to the American Veterinary Medical Association. The revenue growth can be attributed to a wider variety of services and increased prices. The report contains an analysis of monthly surveys and industry sources including the AVMA and the Veterinary Hospital Managers Association. During the COVID-19 era, pet owners were more inclined to spend on their pets, as many consumers were flushed with cash because of government subsidies and did not have a lot of other discretionary expenses coming out of the budget. As life returned to normal with more expenses, veterinary practices have seen weaker revenue growth in 2022 compared with 2021. The amount of business coming in from new patients in 2022 was down about 10% overall. About a third of the practices surveyed for the report indicated they were busier in 2022 than in 2021, with the other practices saying they were as busy or less busy as the previous year. Labor shortages continue to be an issue for many practices. More than half of the practices reported vacancies for one or more veterinarians and 63% had roughly three open positions for veterinary technicians.
Veterinary Industry Trends
Owners may be cutting back, but they’re still spending. Veterinary care accounts for 27% of total pet spending, and the majority of practices are experiencing sales growth, according to the American Pet Products Association (APPA). Total pet industry expenditures continue to grow at a healthy rate of 5-15% annually, reaching $123 million in 2021, per the APPA. Pets have become an integral part of the family and owners are demanding high quality healthcare. Pet ownership remains steady, at more than 60% of US households.
Cutting Edge Technology
As pets live longer, you will see the demand for specialists grow. Older pets require placement of stents and now targeted chemotherapy. Growing acceptance of regenerative medicine has led to increased interest in stem cell therapy to treat osteoarthritis. Pets and their owners will soon see more cutting-edge technology emerge out of clinical trials being implemented today.
Humanization of Pets
Providing pets with a more humanized experience has impacted the way clinics design facilities and services. Designing comfortable waiting areas and offering bereavement counseling can make the experience at the vet more comfortable for the owners and their pets. Some vets are improving kennel areas to justify higher boarding costs, providing pets with five-star hotel like conditions with activities planned throughout their stay.
Veterinary Practice on Wheels
Featuring reduced start-up costs compared to conventional brick-and-mortar practices, mobile veterinary practices have become increasingly attractive to recent graduates and older vets who want to slow-down. These mobile clinics enable veterinarians to tend to animals unable to visit traditional facilities and offer services in unconventional environments. Customized vehicles, outfitted with examination rooms, surgical amenities, and laboratory equipment, empower veterinarians to broaden their scope beyond fixed-location clinics.
Technology advances will help more veterinary practices incorporate telehealth to deliver a better client experience, according to the American Animal Hospital Association. Many veterinarians jumped into telehealth during the pandemic crisis without adequate preparation, which did not catch on too quickly. Still, telehealth can be an essential tool for clinics, according to Jess Trimble, the chief veterinary officer at Anipanion and a contributor to industry telehealth guidelines. She said, “The technology will start to catch up, we’ll have more veterinarians who are comfortable with it, and the platforms will be ready to support all those clinics.” Trimble mentioned new technology available to improve telehealth sessions such as AI facial recognition tools for cats that indicate if they are in pain, and new pet collars that can relay vital signs, including temperature, pulse, and respiration.
It is evident that the future holds immense promise for both pet owners and professionals in the field. The marriage of cutting-edge technology and innovative approaches to treatment has unlocked new possibilities for animal care, paving the way for a more compassionate and effective future. We can look forward to a world where the health and wellbeing of our cherished companions are nurtured by the dedication and expertise of veterinary professionals, ensuring a brighter future for all.
*Source Vertical IQ