Practices busier than ever, except for one time of year

Report gives insight into practice trends, pet owner decision-making
Published on March 01, 2017
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Veterinary practice owners who have noticed a slight decline in patient visits, particularly around the holidays, might be onto something.

An examination of the effects of seasonality on veterinary practices shows that 27.9 percent of revenue in veterinary practices comes from the first quarter, 28.6 percent from the second, 24.9 percent from the third, and only 18.5 percent from the fourth.

“Being able to confidently predict your clinic’s busy and slow seasons will allow you to make business decisions more effectively. For instance, if you or members of your staff want to take an extended amount of time off, or if you are planning a remodeling project for your clinic, it is best to schedule this time within the fourth quarter,” according to the 2016 AVMA Report on the Market for Veterinary Services, made available this February for free download by AVMA members.

Controlling for the effects of seasonality, the Bureau of Labor Statistics reported that overall spending on veterinary services among a sample of U.S. consumers dropped between 2005 and 2014. That means even though the prices of veterinary services steadily increased over this period, the amount spent with veterinary service providers decreased for this sample population. The authors of the AVMA economic report suggest this indicates either a decline in the number of pets or less frequent visits by pets to veterinary service providers.

The 2016 AVMA Report on the Market for Veterinary Services, the fourth and final of the AVMA’s 2016 Economic Reports series, also has information on practices’ capacity relative to demand, including regional and practice-type variations; opportunities associated with pet insurance, with information on preferences of possible policy buyers; and a look at the habits of dog owners in purchasing veterinary services in the Raleigh-Durham, North Carolina, area.  


Operating at full capacity 


Despite the possible decline in visits among the BLS’ sample population, a key finding from the AVMA report is that the percentage of veterinary practices that indicated they were working at full capacity increased between 2012 and 2015. AVMA capacity surveys in 2012, 2014, and 2015 found that the percentage of U.S. practices working at full capacity increased from 35 percent in 2012 to 40 percent in 2014 and 39 percent in 2015.

From 2014-2015, food animal practices in particular saw a large increase in this area, while mixed animal practices saw a drop, and equine and companion animal practices experienced only modest change. 

The current estimate of 7.1 percent excess capacity in 2015 has decreased from 12.5 percent in 2012 and 7.7 percent in 2014. This measure is related to underemployment and refers to unused but available ability for veterinarians to deliver services. The 2012-2014 figures have been adjusted from the originally reported 17.2 and 13.3 percent, respectively, after re-weighting and reanalyzing the data and factoring in an updated AVMA workforce model.  

                ​Money spent quarterly on veterinary services among a sample of about 7,000 households  
                Source: 2016 AVMA Report on the Market for Veterinary Services

The forecast is that just 5.7 percent of available veterinary services in the U.S. will be unused by 2017 and that that figure will remain flat through the remaining forecast period, which ends in 2025. The improved excess capacity estimates are attributable largely to two causes. First, the economy has improved, leading to increased demand by consumers, coupled with a drought in the West that has increased the price of livestock. Second, no new veterinary colleges appear to be on the horizon after Lincoln Memorial University and Midwestern University graduate their first classes next year. After 2018, the study’s authors anticipate, the number of annual veterinary graduates will stabilize at about 4,290.

Pet insurance decision-making

Results from two studies conducted in 2015 and 2016 also appeared in the economic report. One of them, a joint study by the AVMA and Mississippi State University, sought information about the willingness of pet owners to purchase pet health insurance and preferences among various potentially available policy options. For example, pet owners who considered their pet to be part of the family and those who expected a pet to require medical care were found to be more likely to purchase pet health insurance. While the study found no evidence to suggest that income affects the decision to buy insurance, owners who responded that an unanticipated, $1,000 veterinary bill would present financial difficulty were more likely to buy insurance.

Further: “Insurance buyers, the study suggests, are sensitive to product pricing: As the price increases, the likelihood that a consumer will purchase pet health insurance drops. As a policy’s reimbursement percentage increases, however, a consumer is more likely to buy pet health insurance. And, inclusion of unlimited benefits and a wellness plan will increase the probability that a consumer will purchase a pet health care plan.”

When respondents were asked what they looked for when purchasing pet insurance, 51 percent said that they were looking at the insurance premium. 

Competition from multiple sources

In addition, a small-scale pilot study looked at choices made by dog owners in the Raleigh-Durham, North Carolina, area when obtaining pet care products and services. The National Center for Food and Agricultural Policy, with funding and direction from the AVMA, conducted the research, in part, to evaluate potential differences among local and national markets. Findings showed that some health issues, such as flea and tick problems, diarrhea or vomiting, and even injuries were addressed at home, while others—including intestinal worms; ear, eye, or dental problems; and skin or fur maladies—were more likely to be addressed during a routine checkup than with a separate visit to a veterinary clinic or hospital. A veterinary clinic or hospital did emerge as the choice for routine checkups among most respondents who indicated that they had taken their dog somewhere for this type of examination in the preceding 12 months.


Even though the prices of veterinary services have been steadily increasing over this period (BLS, 2014), the amount spent at veterinary service providers is declining for the constant sample (population) size.

Also within Raleigh-Durham, the pilot study discovered that veterinarians faced competition from animal shelters and public clinics for spaying and neutering dogs. “A consumer decision, it could be speculated, influenced by the fact that sterilization is provided free of charge by humane societies and public clinic providers,” according to the report. Even though a pet is spayed or neutered only once, the price charged for the package of veterinary procedures, medications, and services it entails could determine whether a dog owner opts for sterilization. The same was not found to be true regarding euthanasia. The study concluded that, for the area surveyed, veterinary clinics or hospitals, exclusively, “maintain the market for euthanizing dogs.”

Lastly, the study’s results showed that veterinarians serving the community surveyed also faced some competition in retail sales from big-box pet stores. Data on purchasing patterns for product types and providers of such showed that pet-focused retail stores led in special food and dental products, and online sources, along with grocery stores and other retail outlets, led in vitamin supplement purchases. Veterinary clinics and hospitals, though, maintained an advantage in flea and tick product purchases among the survey community.

More items of note

Other notable findings reported in the 2016 AVMA Report on the Market for Veterinary Services are as follows:

  • The mean size of a clinic in the sample, according to the 2015 AVMA Capacity Survey, was 3,478 square feet, and it had just over three examination rooms and served 70 patients per veterinarian per week.
  • The 2015 avian influenza outbreak, the total cost of which is estimated at a minimum of $1 billion, led to a massive increase in the demand for veterinary services.

2017 economic report

Also, in March, the AVMA released the 2017 AVMA Report on Veterinary Markets, a summary of the 2016 AVMA Economic Summit, as the first of four economic reports for this year. All economic reports are available here for free download by AVMA members or for purchase by others as a series.