Today's Veterinary Business

OCT 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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Page 17 of 67

16 Today's Veterinary Business Business Business THE VETALYTIX REPORT It's the Economy, Stupid Economic data from the first half of the year showed that 2018 contin- ues to move in the right direction, although more muted growth was observed than in past years. Accord- ing to Veterinary Hospital Managers Association data, practice revenue through July was up 3.7 percent compared with the same period in 2017. Although positive, the growth was less than the 5.1 percent in- crease observed in 2017 as well as the 5.9 and 5.8 percent jumps seen in 2016 and 2015. Other metrics appeared less favorable. Total practice visits were down slightly, 0.3 percent, through July compared with the increases observed in the prior three years. Ad- ditionally, new clients continued to decline, down 11.4 percent in 2018. Insights from the Vetalytix data set revealed similar trends. The Vet- erinary Consumption Index, a pro- prietary leading indicator for clinical throughput, reported overall growth of about 4.5 percent through July. This was consistent with the growth observed in 2017 but significantly less than the double-digit volume increases seen in 2016. However, other Vetalytix metrics seemed to provide more reason for caution. Over the past 12 months, the veterinary channel saw a 1.3 percent contraction in the total dose volumes of canine core vaccines and a 2.6 percent drop in feline core vaccines, suggesting a softening of veterinary wellness volume or even pet owners mi- grating outside of the veterinary channel for these core services. The Varying Customer Base In a normal business model, entre- preneurs identify an unmet need of their target customer base and then build their business offering — a product or service — to meet that need more effectively than any other provider in the market. An en- trepreneur's business is based first and foremost on what the customer desires, whether faster, cheaper or of better quality. In many ways, veterinary medicine has taken the opposite approach over the past decades. As a profession, we have determined our offering, set our availability and held to rigid market pricing. In essence, we have determined our business by what we wish to pro- vide to clients. Should we really be surprised to see clients migrating to service offerings from new compet- itors in the marketplace? This fixation on setting the standard of care can be self-limiting. Obviously, all veterinarians should adhere to a minimum standard of care. However, a 2016 study pub- lished by Idexx Laboratories and the American Animal Hospital Associa- tion identified a needs gap of up to five times revenue per patient in the typical hospital. That means peo- ple aren't providing the best care for their pets and if they did, the care would cost five times as much as what they spend now. While mathematically correct, the analysis is based on the idea of 100 percent compliance with gold-standard care and not necessarily on the diverse needs of clients within your prac- tice. Is it reasonable to expect all clients to want and be able to afford this higher level of care? One should question whether compliance measured against a target of 100 percent of the patient population is a realistic approach in a practice whose clientele varies based on numerous social, eco- nomic and emotional needs. Practi- cally speaking, most practices have More than 300 industry leaders attending the KC Animal Health Corridor's Market Insight Seminar in August witnessed "A View From the Trenches," our presentation about some of the most pressing issues facing today's veterinarians. Here are a few highlights. A view from the trenches By Karen E. Felsted, DVM, CPA, MS, CVPM, CVA, and Travis Meredith, DVM, MBA, DACT Today's business environment is more complex, more dynamic and more competitive than ever before. Drs. Karen Felsted and Travis Meredith had more to say at the Market Insight Seminar. For detailed charts and to read what they think about student debt, corporate consolidation, and the distribution and online channels, visit MORE ONLINE more than one type of client arriv- ing with unique needs, financial situations and value perceptions. In today's competitive market- place, understanding local clinical norms is more valuable. While 100 percent is an aspirational target, it is far more valuable for a practice to intimately understand the clientele mix and meet the varying needs. Telehealth The topic of telehealth has received great attention over the past 24 months, and interest from the pet-owning public does not appear to be abating. The idea of connect- ing directly to a veterinarian without physically visiting the practice is of huge interest to many pet owners. Telehealth is a booming enter- prise outside of veterinary medicine, having gained prominence in many disciplines of human medicine, ranging from general family practice to pediatrics. Talkspace, a leading telehealth therapy and social ser- vices platform, references close to a dozen peer-reviewed telehealth studies in the treatment of psycho- logic and social disorders.

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