Good news, bad news for equine practice owners
The market for equine veterinary services has changed fundamentally since the Great Recession.
“There are fewer clients and horses, but we’re doing more with them. There’s still some good opportunities I think that are still out there,” said equine veterinary market research specialist and practice management consultant Dr. Edward L. Blach.
He and Dr. Andrew R. Clark, also an equine practice management consultant, conducted the Merck–Henry Schein National Equine Economic Study, co-sponsored by the American Association of Equine Practitioners. The study covers 2007-2012 and had about 500 respondents; results were released Dec. 6, 2015, during the AAEP Annual Convention.
Compared with 2007, there were decreases in equine veterinary practice revenues and in the numbers of invoices or transactions, active patients, and active clients in 2008, 2009, and 2010; however, there was a rebound or increase in these parameters in 2011 and 2012, according to the survey.
Only 35 percent of practice owners tracked laboratory revenues and imaging revenues, and fewer than half of practices monitored payroll expenses. But perhaps most alarming was that only 31 percent of practices reported locking up their pharmacies.
Prior to the recession, there was enough equine practice work without having to try hard, Dr. Blach said, but now there’s more competition for the work available.
“One of the notable findings is that, even with the significant downturn, we saw little adjustment in staffing levels, which speaks to the dedication of owners to their staff. On the other side, payroll and labor expenses are the No. 1 expense in a practice, so if you’re having challenges, you may need to make adjustments in hours or head count,” he said.
Staffing wasn’t the only area where the study found that equine practice owners could improve their management skills.
Dr. Clark said he was unsettled to find that most practices, when asked about 16 communications tools and 17 management tools, were not using any of them.
For example, only 30 percent of practices used some form of reminder for appointments, and just 16 percent of practices had a formal budget, while 31 percent had a mission statement.
Further, while 60 percent of equine practices used email to communicate with clients, “Most of them don’t have anywhere close to a full list of email addresses,” Dr. Clark said. Also, 73 percent of practices texted with their clients, but Dr. Clark said that can present a problem because texting leaves no trackable record of what was discussed.
Only 35 percent of practice owners tracked laboratory revenues and imaging revenues, and fewer than half of practices monitored payroll expenses.
But perhaps most alarming was that only 31 percent of practices reported locking up their pharmacies.
“So, 69 percent think their best plan is to have hundreds of thousands of dollars or at least tens of thousands of dollars worth of drugs and supplies unsecured and go home for the night,” Dr. Clark said. Plus, inventory is a practice’s second highest cost.
“It’s sad because these are such basic tools,” he said, adding that this also is an opportunity where practices can easily change their methods and see an improvement in their business.
Specifically, Drs. Clark and Blach outlined five areas where education needs to occur to improve the likelihood of practice success:
- Build and retain a practice team.
- Optimize inventory-supplier relationships.
- Enhance communication, from sending reminders to being accessible to embracing different methods of client communication.
- Get financials in order, track metrics such as labor and inventory costs to identify trends, and make adjustments accordingly.
- Develop a customer focus, with an emphasis not only on veterinary service delivery but also on client service.
Survey results and free business advice are available at a website owned and managed by Drs. Blach and Clark. Those who are interested can establish an account, which allows them to receive notification of new releases as they occur, in addition to news of future studies.
Related JAVMA content:
Study: Equine practices on the rebound (Feb. 15, 2014)