AAHA economic survey results mixed, but ‘encouraging’
Despite a withering economic climate, most veterinarians say they are growing financially, according to a recent American Animal Hospital Association survey.
Of the 550 hospital directors who responded to an AAHA economic impact survey in July, 55.5 percent said their revenues increased in the first six months of 2008, as compared with the first half of last year. More than a quarter (28.4 percent) said revenue decreased, and 16.2 percent indicated that their revenues remained level.
Practices in the black reported an average revenue increase of nearly 10 percent. Average decrease for practices with declining revenues was 9 percent.
Outlook for the next six months was mostly positive. About 40 percent of respondents said they predicted an increase in revenue (estimated average increase 9 percent), while 21 percent foresaw a drop (average prediction about 8 percent).
“I didn’t see any worrisome signs,” said Dr. John Albers, executive director of AAHA.
“I think in general we’re pretty encouraged by the data.”
Many practices said they were dealing with the economic downturn by raising prices, and cutting hours or staff, even if their practice was doing well. Others in more affluent areas did not seem to feel the effects much at all.
‘High level of interest’
Most respondents took time to add comments on their survey forms, which Albers saw as a sign that people are at least watching the economy closely.
“To me, it indicated a high level of interest in the issue,” he said.
Of the nearly 500 practices that left comments, 25 percent said they had, or were planning to, increase prices to help get through the downturn. More than 12 percent said they were cutting staff, and 26 percent said they were increasing marketing. Nearly 10 percent were planning to add services or facilities, and 15 percent said they were not making any changes at all.
Margaret Rucker, DVM, said that her practice in rural southwestern Virginia is adding 3,800 square feet in the next eight months, and they are planning to add one veterinarian and a licensed technician. She said the practice’s revenue is up 14 percent so far this year.
“The average driving time for our clients is almost an hour,” Rucker said. “Our area has been blessed lately with growth due to new manufacturing and two new IT companies, which have moved into our county. Our new client numbers are increasing each month.”
Other practices were not feeling so fortunate. Brent Cook, DVM, of Kingsbrook Animal Hospital in Frederick, Md., reported a 20 percent drop in revenue from January to June.
“We had always been taught that veterinary medicine was safe no matter what the national economy might be doing because people are always going to pay to get things done for their pets – Baloney!” Cook said.
“Perhaps veterinary medicine was economy-proof when the average doctor transaction was $60, but now there is a lot of technology available to allow us to practice better medicine,” Cook continued. “We are much better at care for pets and people, but everything has a cost and the change in the economy seems to have proven that pets are a luxury these days and the cost of their care comes from expendable income, which no one has.”
Cathy Smith, DVM, owner of Oak Park Veterinary Clinic in Grover Beach, Calif., said revenue is down 20 percent compared with last year. She said this year’s gross income is the lowest her practice has had since 1995.
“I am not replacing my doctor on leave, and will operate as a solo practitioner for the first time in 14 years,” Smith said. “Dismal times! Efforts to increase marketing have not had a noticeable impact based on customer feedback.”
Julie Wahl, support staff member at Highland Animal Clinic in Anchorage, Alaska, commented that while her practice is increasing prices slightly, Alaska is not as affected by the economic woes of the rest of the country.
“We are a 36-year-old family practice with third-generation clients using and recommending our practice,” Wahl said. “Our area demographics are on the high end of the economic scale, and our area of Anchorage is still growing, bringing in more potential clients.”
The e-mail survey was sent out in July to AAHA-member directors of both accredited and non-accredited practices.