Each year the VHMA asks practices about planned or anticipated fee increases for the year. Depending on the question, the number of responses ranged from 176-264. As with past years, the majority of the practices participating in this survey said yes to the question: “Have you or will you raise your professional service fees in 2020?”
Most of the respondents (66%) said they would be increasing fees on both shopped and non-shopped services. More practices in 2020 (compared to 2019) are increasing their fees on both shopped, and non-shopped services and fewer are not increasing fees or only increasing them on non-shopped services.
About 44% of the responding practices are increasing shopped services by 4% or more; this is essentially the same proportion of practices as in 2019. Surprisingly there was a shift towards a lower increase for the rest of the practices; in 2019, about 41% of practices increased shopped service fees by 3% and 15% by amounts less than 3%. In 2020, just 30% increased fees by 3% and 26% by lesser amounts. For most of the practices included in this service, shopped veterinary fees increased more than the rate of inflation for 2019 (1.8%).
About 10% of the responding practices are increasing non-shopped services by greater than 6%; this is essentially the same proportion of practices as in 2019. Surprisingly there was a shift towards a lower increase for the rest of the practices; in 2019, about 54% of practices increased non-shopped service fees by 4-6% and 35% by amounts less than 4%. In 2020, 47% increased these fees by 4-6% and 43% by lesser amounts. Again, it should be noted that most of these practices increased overall non-shopped fees by more than the rate of inflation for 2019 (1.8%).
When asked what factors or strategies are considered in deciding how much to increase prices, the most commonly mentioned factors include:
- The overall cost of doing business and anticipated future cost increases
- Increases in practice costs for a particular product or service
- What other practices are charging
- Time since the last increase
- Location and area standards
- Demographics of local pet owners
- Fee references such as AAHA, WMP
- Gut instinct
- Frequency service is utilized by pet owners
- Client perception of value
For more survey results, read the full report, the VHMA Insiders’ Insight Report February 2020.