Posted Feb. 25, 2015
The prices that pet owners paid for canine veterinary services decreased slightly from 2009-2013, according to an analysis released Jan. 18 during the North American Veterinary Community Conference in Orlando, Florida.
The parent company of Veterinary Pet Insurance, Nationwide, partnered with Purdue University’s Krannert School of Management to produce the Nationwide-Purdue Veterinary Price Index. The index draws on data from more than 5.3 million VPI claims.
The analysis found that prices for canine veterinary services decreased about 1 percent between 2009 and 2013, after adjusting for seasonality. The consumer price index increased about 8 percent in the same time frame, with the federal government estimating that prices of veterinary services increased by 15 percent.
|| Source: Nationwide-Purdue analysis
The government bases its estimate of the prices for veterinary services on telephone interviews with hundreds of hospitals regarding the listed prices for common services, said Kevin J. Mumford, PhD, an associate professor of economics at Purdue and a lead author of the new analysis. He said the Nationwide-Purdue index reflects what hospitals actually charge for all services, including discounting.
Policyholders with VPI pay their veterinarian for services, then submit invoices to VPI for reimbursement of covered services. Purdue economists analyzed all the prices on the invoices for 2009-2013, weighting the index by services purchased in 2013.
Dog owners in the data set spent 25 percent of their money on wellness care and 75 percent on other medical care. Physical examinations were the most common type of wellness care, while treatment for otitis externa topped the list for medical care. Prices for wellness care increased 8 percent from 2009-2013, but prices for medical care decreased 2 percent.
|| Source: Nationwide-Purdue analysis
“People who have pet insurance may use veterinarians’ services in ways that are different than the average pet owner,” Dr. Mumford noted. “The insurance itself may provide incentives to seek certain kinds of treatments or even seek any treatment.”
According to the American Animal Hospital Association, the average transaction charge at small animal practices increased from $125 in 2009 to $137 in 2013, up 10 percent. If prices for services are decreasing for all clients, Dr. Mumford said, clients could be paying for more services at each visit—including at practices that are having fewer visits.
Dr. Carol McConnell, VPI chief veterinary officer, said she was initially surprised by the finding that veterinary prices were basically flat. When Nationwide and Purdue released the analysis at the NAVC Conference, veterinary leaders and consultants in attendance debated all kinds of hypotheses to explain the results.
Maybe clients were so spooked by costs after the recession, attendees hypothesized, that the clients pushed back more in the examination room, such as by resisting diagnostics and asking “Can you just give me the medication?” Maybe hospitals are forgetting to charge for every line item in a service. Maybe empathetic veterinarians are not charging their full list-price fees.
Dr. McConnell said the perception by clients that prices are rising may be based on wellness care. She said clients think, “Well, I paid this much money when I went in for my annual exam last year, and I paid that much money when I went in for my annual exam this year, and the number is higher.” What clients don’t know is that veterinarians are actually charging less for medical care, she said.
The charge for a physical examination increased 10 percent from 2009-2013. The charge for treating an ear infection increased, too, but just by 3 percent.
Nationwide and Purdue plan quarterly releases to track trends in pricing.
Details about the Nationwide-Purdue Veterinary Price Index are here