Growth in revenue and patient visits continues to be slower than that seen over most of the months in the previous year. (Note that September 2023 had the same number of workdays as September 2022.) September 2023 growth compared to September 2022 was 1.3% compared to 4.3% in August and 5.9% in July. Patient visit numbers declined 4.6% in September 2023 compared to September 2022; this was a greater decline compared to August (-2.5%) and July (-1.0%.). New client, active client, and lapsing client numbers also continue to decline.
Practices continue to report they are seeing a downward change in client acceptance of pet care recommendations due to the increasing cost of veterinary care and the ongoing uncertain economy. Last month, we talked about how to talk to clients about costs. Better cost conversations can contribute to the value calculation pet owners mentally go through when deciding what level of care to provide, but they don’t solve all money problems for clients.
This is where offering a spectrum of care becomes so important. Most people are probably familiar with what this means—a practice offers a continuum of care to pet owners depending on their needs, desires, and financial capabilities rather than only making it possible or expecting all clients to want a gold standard of care. Obviously, the care offered at the lower end of the continuum is more basic than that at the high end and, consequently, less expensive. There should ALWAYS be a minimum acceptable level of care built into this lower end, upon which the upper levels of the continuum are built.
Offering a spectrum of care matters for several reasons.
First, people want different things. There are very few products or services available to consumers that don’t come in a range of options—jewelry, cars, hotels, human health care, etc. Veterinary medicine shouldn’t be any different because pet owners also differ. It’s all fine to say people shouldn’t own pets if they can’t afford them, but that’s not real life, and “afford” has a lot of meanings. It’s a bad look for veterinary medicine if we’re not actively contributing to a solution that allows pet owners who genuinely can’t afford or otherwise don’t have access to care to get it at some appropriate level.
I was fortunate in the first practice I worked at before, during, and after vet school. It focused on a spectrum of care long before it was a “thing.” The practice was in an area with mixed demographics—some pet owners earned more in a year than I will earn in a lifetime, and others lived on meager fixed incomes. Regardless, the owner of this practice was always able to find a medically appropriate alternative that satisfied the desires and financial capabilities of the pet owner. He was great at this, and I learned a lot.
Veterinary medicine has been through a lot since the pandemic started in early 2020, and some things have clearly changed forever. However, it’s unclear how some of the trends seen during the past few years will continue (or not) into the future. These include the rising pet owner demand for care, the cost of veterinary medicine, and workforce (particularly doctor and credentialed technician) shortages. As noted above, the average revenue growth over the last year has come down from pandemic highs and is very similar to what it was prior to the pandemic. Veterinary visit numbers are also down, and prices are up; i.e., not all revenue improvement is due to organic growth. Offering a broader spectrum of care increases the pipeline of pet owners agreeing to care recommendations. It keeps our profession and individual practices economically strong. We are a profession largely built on consumer discretionary spending and need to offer services/products that appeal to a broad range of pet owners.
There are practices, of course, who continue to have higher levels of growth as well as those who may have more average levels of growth but are struggling to take care of the clients they have due to staff shortages. For those, focusing on a concept that adds to their workload may not seem as important right now. However, demand and growth are usually cyclical, and being prepared for the downside of the curve makes sense.
One of the things veterinarians struggle with these days is an increase in clients who complain about cost and choose to provide little or no care for their pets. Focusing on offering a wider spectrum of care allows practices to help those clients who, for whatever reason, are making leaner choices in how they spend money; it’s a more satisfactory experience for both pet owners and practice team members. The concept of a spectrum of care isn’t entirely new, but definitely, one that deserves a lot of attention and greater implementation in practice.
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Karen E. Felsted, CPA, MS, DVM, CVPM, CVA of PantheraT Veterinary Management Consulting, www.PantheraT.com, provides data review and commentary.
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