How the Economy is Affecting Veterinary Hospitals

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As we suffer through these tough times, so many pet-related businesses and entities are feeling the economic pressure. One of the first signs that the economy was deteriorating was the increase in drop-offs to the humane societies and animal shelters to the point where they could not house any more pets. To save our pets, some humane societies are moving pets to shelters that have room or to adoption locations that have a higher adoption rate. Humane societies also speak of the decreased yearly donations that are coming in to help operate the facility.

In my own profession, I see veterinarians being released from employment due to the lack of business at a particular veterinary hospital. They are being released along with veterinary nurses, receptionists, etc., who are all people and who depend on the veterinary hospital for their employment and livelihood. Costs of medicines from veterinary distributors are going up, costs of pet foods are going up (due to the cost of shipping and the cost of corn), costs of employee benefits are also going up and in essence the total overhead to operate a veterinary hospital is going up. If you think a veterinary hospital operates like a human hospital, you may think that veterinary hospitals make a small fortune from what they do. Actually, the profit margin for a veterinary hospital is very low, sometimes totaling anywhere from 5-15% of the yearly gross. That is not good, if you compare it with other medical businesses. You can even review the financials of Veterinary Centers of America (trades as WOOF) and see that the principle revenues are from the referral laboratories not necessarily the veterinary hospitals.

The owners of the veterinary hospitals are seeing their profits decrease and may even become more edgy during the struggle to survive. I recently heard of a veterinarian who was terminated because the an online article he authored was paraphrasing a Reader’s Digest article of eight years ago. The article and blog discussed how to save money at the vets, but in the mind of the owner this public information of eight years ago was allegedly taking thousands of dollars of business away from that hospital, so the internet blogging vet was terminated. Now, we all know that that internet is protected by the First Amendment, but this owner did not see the legal ramifications of such a termination. In essence, the veterinary hospital owners, corporate veterinary hospital owners, and other animal health related businesses, including not-for-profit organizations, are feeling the crunch and reacting.

Are you seeing donations going down to your humane society? Are you helping your humane society with fundraising events? Has your favorite veterinarian been released because of the economy? Times are tough for us all, including our fin, feathered, and fur-family.

Dr. Manda is a full-time emergency veterinarian, former veterinary hospital owner, pet food executive, and successful entrepreneur. He consults to the pet food, animal health, and veterinary marketplace both nationally and internationally. At home he has 3 cats who request all of his free time.

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