State of Industry reveals glimmers of hope, opportunity

Though the veterinary industry is seeing glimmers of economic hope, there is still plenty of opportunity for improvement, according to the American Animal Hospital Association’s (AAHA) State of the Industry Report.

The third annual report, presented at the opening session of the 2012 AAHA Yealy Conference in Denver, Colo., reviewed data from recent years and identified industry trends. The data reflected total patient and revenue trends for the veterinary channel, and looked at U.S. economic trends and their correlation with the veterinary industry.

The data covered over 4,500 practices, 13 million active pet owners and 20 million pets.

Hiring by private businesses may be on the rise, as reported by Trends Today in March. Recent data showed that January increased by 173,000 jobs, while February increased by 216,000, beating the projection of 208.000.

"Private businesses tend to be hiring more, so things might be looking a little bit better," said Michael Cavanaugh, DVM, executive director of AAHA.

Things are also looking up on the consumer side.

"Monthly real discretionary retail sales dollars trends have been improving during 2010 and are positive during every month during 2011," Cavanaugh revealed.

Consumer sentiment has also been improving over recent months, Cavanaugh said.

Though veterinary unique patient visits were down in 2010, data showed a positive increase in 2011. However, there is still great opportunity for improving the number of visits to the veterinarian, Cavanaugh said.

"While the visits are back in the positive realm for dogs and cats, it’s nowhere near where it needs to be to be able to say our nation’s dogs and cats are getting the care they need," Cavanaugh said.

Dog patients comprise just over 72 percent of total practice patients, but accounted for almost 80 percent of practice revenue during 2011. This is just a slight shift when compared to 2010, where dogs were 70 percent of patients.

Cats continue to be underrepresented in veterinary offices.

"Proportionately, there are more dogs coming in compared to cats, which should certainly not surprise anyone in the veterinary world since this trend has been going on for several years," Cavanaugh said.

The average transaction for dogs is flat compared to 2010, which the average transaction charge for cats increased 6 percent in 2011.

"That is a sign that maybe we’re doing more to help those cats who are making it in to see us," Cavanaugh said.

Compared to dogs, a lower percentage of cats purchase flea and tick and heartworm medications. Overall, from the veterinary channel, Cavanaugh showed, compliance is down.

On average, dogs have greater average annual doses compared to cats for key parasiticide products during 2011.

Data also showed that over 75 percent of large practices increased revenue during 2011 compared to about 60 percent of small practices.

While Cavanaugh did not give a specific explanation for this, he suggested that perhaps the economies of scale in a well-run larger practice may allow them to weather difficult economic conditions more readily.

Across the border, data from Canada is reflecting a drop in active clients – the Canadians used their own analogy, saying they are seeing clients "drop like ripe fruit".

"While hope is not a strategy, my hope is that 2012 is a year where the economy improves for all of North America," Cavanaugh said.

Cavanaugh urged veterinarians to support preventive healthcare for their patients, especially for felines.

Getting more dogs and cats in through the doors of veterinary offices for regular, preventive care has been the focus of AAHA and related veterinary associations in recent years.

Recapping recent developments, AAHA President Michael Moyer, DVM, highlighted how AAHA is working to support preventive healthcare and the fight to get more pets in through clinic doors.

Most notably, AAHA was a founding member of the Partnership for Preventive Pet Health, as well as the Pet Nutrition Alliance (PNA).

Composed of more than 20 leading veterinary associations and animal health companies, the Partnership is designed to ensure that pets receive the preventive care they deserve through regular veterinary visits.

Similarly the PNA was created to raise awareness about the importance of proper pet nutrition and the value of nutritional assessments for every pet every time they visit the veterinarian.

Dan Aja, former AAHA president and now director of professional affairs at Hill’s Pet Nutrition, emphasized the importance of quality pet nutrition in ensuring preventive pet health.

"Today, a lot of pets aren’t getting the care that is required, and that is a fact," Aja said. "As members of the veterinary profession, we have a great opportunity to help pets and their owners enjoy longer, healthier lives together."

Aja reiterated the importance of getting pets into clinics for regular preventive care.

"What we need to do is change how we talk to clients and reemphasize preventive care," Aja said.

The AAHA opening session also included Practice of the Year awards that celebrated exceptional AAHA practices.

The Veterinary Emergency and Specialty Center of Richmond, Virginia took home the AAHA-Accredited Referral Practice of the Year Award, while Wellington Veterinary Clinic of Wellington, Colo. received applause as the AAHA-Accredited Practice of the Year Award.