(SCHAUMBURG, Illinois) Oct. 21, 2015 - Salaries are climbing. Employment is strong. The debt-to-income ratio for veterinary school graduates is holding steady. All of this positive economic news was shared at the 2015 American Veterinary Medical Association (AVMA) Economic Summit, painting a picture of improved economic indicators across the veterinary profession.
“The economic state of the veterinary profession is improving,” said Michael Dicks, Ph.D., director of the AVMA Economics Division. “Overall, the veterinary profession is recovering along with the rest of the U.S. economy, but we still have a ways to go.”
Specifically, veterinary starting salaries are up to an average of about $70,000. Unemployment is at about 4 percent, the number of applicants to available jobs has dropped to 1.5:1, and the debt-to-income ratio of graduating veterinary students is hovering right around 2:1.
The economic summit, held Oct. 21 in Chicago, showcased research conducted in 2015 by both the AVMA and more than 20 outside economists, continuing a collaborative effort that is helping the association gather information and data from a variety of sources, including its members.
“The summit updated all of the information we’ve gathered in the past and presented new research from the AVMA and those who are helping us in our continuing efforts to fill the knowledge gaps that exist,” Dicks said. “We are building on the momentum we’ve established, gathering more information that will help guide our research and focus our efforts.”
One area where more information is needed focuses on how consumer income and the price of veterinary care affect consumer demand for veterinary services.
“We need to get a better understanding of what drives and motivates pet owners to seek veterinary care,” Dicks said. “Once we get a better idea as to why and how consumers make decisions related to visiting the veterinarian and selecting veterinary services, the better off we will be in helping improve pet health and addressing some of the economic challenges we face.”
When it comes to practice profitability, Dicks and other summit presenters all agreed that the profession has the opportunity and the ability to increase the demand for veterinary services.
“We can increase clients and patients; we can increase services and products; we can increase visits; and we can increase compliance,” Dicks said. “And one way to do that is for practices across the country, big or small, to collect client data through practice information management systems. This approach can accurately measure clients and patient numbers and services used, it can recapture inactive clients and it can increase new clients with the help of multiple marketing efforts.”
Knowing their current and potential client base can help veterinarians better deal with many of today’s economic, financial and social realities, Dicks said.
“Most people who visit the veterinarian are upper-middle and upper-income people, and that’s a serious concern because that’s only 40 percent of the population,” Dicks said. “Veterinary spending is discretionary spending, and we are in the process of trying to determine where veterinarians fit in the discretionary spending hierarchy. The incomes haven’t recovered adequately enough for the lower two-thirds of the population, and we have to find ways to reach those clients who don’t feel they can afford to take their pets to the veterinarian.”
So what’s next?
“We’re setting priorities as to what areas of research most need our attention,” Dicks said. “For instance, we are beginning to really dig deep into learning why some practices are doing so well and others are struggling. We need to look at what’s happening at these practices to determine why they are so successful. We haven’t been focused on practices; we have been focused on the markets. Now, we are turning our focus to the practices.”
The AVMA Economics Division, the AVMA’s Veterinary Economics Strategy Committee and its research partners will also place more attention on the analysis of consumer demand characteristics, including how to provide affordable veterinary services without reducing standards of care. And a new focus will be placed on helping enhance personal financial education, from the veterinary school applicant to the industry veteran with years of experience.
“The good news is that we are learning more every day and getting better information that allows us to focus our resources to fix the problems and address the challenges,” Dicks said. “We can’t fix things if we don’t know what’s broken.”