Study: Equine practices on the rebound
Select results from a new economic study give a snapshot of the current practice environment for equine veterinarians.
Parts of the Merck–Henry Schein National Equine Economic Study, co-sponsored by the American Association of Equine Practitioners, were released Dec. 9, 2013, during the AAEP Annual Convention. The study covers 2007-2013, taking a look at “what happened from the end of the glory days to the Great Recession to now as we’re coming out of it,” said Dr. Edward L. Blach, one of the study’s two researchers.
By the numbers
The purpose was to conduct an in-depth economic study of the equine veterinary industry, assess current management practices used in equine practice, and make the results available to the entire horse industry. The study was created by combining the results of a survey that had 500 respondents with a data-mining project.
“We’re getting to a place in the industry where companies are less interested in developing products for us if we don’t have data. We need to let them know what’s happening,” said Dr. Andrew R. Clark, the study’s other researcher.
Drs. Blach and Clark found the economy had a negative impact on equine veterinary practices from 2008-2010. They also determined that there was a substantial rebound in gross revenues in 2011 and 2012, “although it doesn’t appear we’re back totally to where we were before collapse,” Dr. Blach said.
Not surprisingly, the survey showed practice owners earn the highest income among various types of equine veterinarians and that veterinary associates desire more income to pay off student loan debt. The mean compensation for owners was $160,206, and for associates, it was $68,289.
Financial security, stress, and debt—in that order—were the biggest concerns for associates, while the biggest concerns for owners were financial security, retirement, and stress, followed by whether they’d be able to sell their practice.
It appears the number of associate veterinarians drops off substantially right before age 40. Dr. Blach said this is in line with what is seen in the overall profession with regard to that position.
He also commented that one piece of data that surprised him was that approximately 69 percent of respondents identify themselves as solo practitioners. “I know in the late ’90s, about 40 percent of practices among AAEP membership were solo. And I know in the last few years, it was 52 percent or so,” he said, not speculating on why the study figure was so different.
Cause for concern
During the researchers’ presentation, attendees talked about what they were seeing at their practices.
One attendee said that, in the past few years, “My gross revenue is a lot lower, but I’m making more money because I switched to services with a higher net return. That turns out to be good because I’m making money more on a per-hour basis than I was before the recession.”
Dr. Clark said when times were good, practitioners made a lot of decisions based on using the “shiny new thing” in their practice, but when times got worse, they began to think more critically.
“We were forced to unwind some of the decisions we made. We made the ultrasound machine last longer than before,” he said. “Management is our only tool that can impact our bottom line. I don’t think your experience is uncommon. We’re not going to go back to the way it was.”
There’s a broad array of clients out there. You can generalize the market, but the key to success for an individual practitioner is understanding your clients and what they want and what’s important to them. That’s the definition of care. We can’t be all things to all people. But survey your general demographics and what they want, and then meet it.
- Dr. Andrew R. Clark, researcher, Merck–Henry Schein National Equine Economic Study
The issue of client needs and communication came up as well.
“Even when things were great, this has always been a fragmented industry,” Dr. Clark said of horse owners, from sport horse owners to those who realistically can’t afford their pleasure horse. “You have to approach them all differently.”
Dr. Scott Spaulding, a member of the AVMA Veterinary Economics Strategy Committee and owner of Badger Veterinary Hospital in Wisconsin, said the profession needs to be careful about dismissing people who don’t seek veterinary care, assuming they won’t pay well. “Some people don’t know to get a pre-purchase examination. Maybe they’re intimidated or just don’t know better,” he said.
Dr. Clark agreed, saying, “There’s a broad array of clients out there. You can generalize the market, but the key to success for an individual practitioner is understanding your clients and what they want and what’s important to them. That’s the definition of care.
“We can’t be all things to all people. But survey your general demographics and what they want, and then meet it.”
He added, “Quit being so worried about external factors you can’t control, and work on what you can.”