Although veterinary practice revenue increased an average of 5.7% between August 2021 and August 2023, the number of client visits fell 2.7% in the same time. That’s an indication that, within the current inflationary climate, pet owners are becoming increasingly sensitive to the rising cost of veterinary services and delaying visits to the veterinarian.
It was one of several emerging trends presented during the Practice Pulse session at the annual AVMA Veterinary Business and Economic Forum, held virtually October 24-25. Additionally, other findings from the forthcoming 2024 AVMA Pet Ownership and Demographics Sourcebook show that the U.S. pet population continues to grow and excess demand for veterinary services appears to be tapering off.
One of the speakers, Abby ShalekBriski, AVMA assistant director of statistical and data analysis, said preliminary data from several sources suggest the total number of pet dogs ranged between 86.2 million to 90.4 million in 2022, up from 76.8 million in 2016. During that six-year period, the percentage of U.S. households with dogs grew from 38% to 45%. Also, the percent of dog-owning households with a single dog increased from 60% to 65%.
As for pet cats, ShalekBriski said the total number of cats in 2022 ranged from 66 million to 69.7 million in 2022, up from 58.4 million in 2016. During that period, the percentage of U.S. households with cats grew from 25% to 31%. Also, the percent of cat-owning households with a single cat increased to 58% from 53% in 2016.
“So from 2016 to 2022, we see a 1.94% compound annual growth rate for the dog population and approximately a 2.05% compound annual growth rate for the cat population,” said ShalekBriski.
Despite yearly increases in the numbers of dogs and cats, ShalekBriski said the data does not indicate a great increase in pet ownership contributing to a perceived shortage of care.
Citing the recently released AVMA survey, ShalekBriski said 76% of pet owners waited less than a week for their pets to be seen by a veterinarian for routine care or an injury. Sixty percent reported seeing a veterinarian within three days. When a pet required emergency care, 78% of pet owners were able to see a veterinarian within a couple of hours.
Veterinary business trends
Following ShalekBriski’s presentation on the market for pets, the focus shifted to the macroeconomy as well as trends relating to veterinary clients, patients, and business operations.
Sheri Gilmartin, vice president of data services for VetSource, described the period between 2020 and 2022 as a rollercoaster, when practice revenue and visits varied dramatically from week to week. But the ride appears to have ended in 2023, Gilmartin said, and businesses are starting to see a return to prepandemic levels. It’s a different story for consumers, however.
“Truthfully, it’s a bit nerve-racking as a consumer in this economy,” Gilmartin said. “On the one hand, we seem to be doing OK. There’s plenty of jobs and stocks are doing well. But then on the other hand, everything feels really expensive. Housing costs and interest rates are increasing, and now there’s talk of a potential recession.”
Clint Neill, PhD, AVMA senior economist and associate director for strategic business research and outreach, echoed those sentiments.
“I wish I had a crystal ball, but the economic indicators suggest that things are still going to be tough,” he said, adding that low consumer confidence is a significant factor in this forecast.
Dr. Neill and Gilmartin discussed several metrics showing how this lack of confidence is evident within veterinary medicine.
Cleveland Research Company conducted a survey gauging price sensitivity among pet owners. When asked to react to the statement, “Higher prices will impact how quickly I take my pet to the veterinarian,” respondents who said they strongly agree rose from 10% in the second quarter of 2022 to 16% in the second quarter of 2023. For the statement, “I plan to go to the veterinarian less over the next 12 months to save money,” respondents who said they strongly agree jumped from 10% to 19% during the same period. And to the statement, “Because of higher prices I will look for cheaper prescription medications,” respondents who said they strongly agree climbed from 9% to 19%.
Another telling metric Dr. Neill and Gilmartin discussed is lapsed visits. This is defined as patients who haven’t been to a veterinary practice in 14 to 18 months. Data show that the number of lapsing patients per practice increased significantly per practice between January 2020 and July 2023.
“We think that pet owners are trying to avoid going to the veterinarian or extending the time between visits,” Gilmartin explained. “What will not change is that people love their pets and want to do as much as they can for their pets, so people won't necessarily stop going to the veterinarian. But we are seeing an increase in the time between visits and the numbers patients in that lapsing period of 14 to 18 months.”
Looking at visits per patient and visit type over a 12-month period, VetSource data show that patients, on average, visit 2.39 time per year. Sick visits are down 0.17%, wellness visits are down 0.45%; and surgery visits are down 3.96%. Additionally, dental visits were down 3.8% per practice over the past 12 months compared to the previous two years.
“To me, this indicates that owners are trying to be extra cautious about what they’re spending by putting off some preventive care,” Gilmartin said.
Dr. Neill and Gilmartin closed their presentation with the following suggestions to help veterinary practices weather the current economic climate:
Reduce expenses where you can, such as working with vendors to lock in prices over the long term to minimize inflationary increases.
Ensure you're maximizing appointment times and making efficient use of the veterinarian’s time.
Offer telemedicine as an option for returning clients and minimize employee turnover and improve productivity by promoting a positive culture within the practice.
“We certainly had our share of challenging times over the past three years,” Gilmartin said, “but this is the best industry to be in and it's really important to remain positive.”