Each year the VHMA asks practices about planned or anticipated fee increases for the year. Practices are continuing to grapple with the pandemic and there is a lot of economic, and political uncertainty in the U.S.
When asked, “Are clients in your practice more or less concerned about increases in the cost of veterinary care than they were a year ago?” 68% of the managers who responded indicated that it is about the same.
Client feedback certainly influences practice decisions in changing fees, and this lack of increased concern about cost no doubt has played a role in what practices are planning to do in 2021.
As with past years, the majority of the practices participating in this survey, 64%, said yes to the question: “Have you or will you raise your professional service fees in 2021?”
About 35% of the responding practices are increasing shopped services by 3% or more and another 46% are increasing their shopped services by 4% or more.
Forty percent of hospitals plan to increase fees by 1-3% on non-shopped services. Forty-seven percent said they plan to increase fees by 4-5%.
Sixty-four percent also said they would be increasing fees on both shopped and non-shopped services. More practices in 2021 (compared to 2020) are not increasing their fees at all on both shopped and non-shopped services although this is still a small percentage of the total.
Managers were asked what factors or strategies were considered in deciding how much to increase either the shopped or non-shopped services in the practice. The most commonly mentioned factors or strategies for shopped services are very similar to those mentioned in the last couple of years:
- How long since the last price increase
- What competitors are doing
- Increased demand
- Increased cost of supplies/labor
- Fee survey guides
- Trends in economy
- Appointment fill rates and waiting lists
- Used Profit Solver—only went up slightly on exams and vaccines; did not increase spays/neuters
- Cost of living in local area
- Minimum wage increases
The most commonly mentioned factors or strategies for non-shopped services included all of those used in pricing shopped services as well as:
- Frequency service is utilized by pet owners
- Time it takes to perform the service
- Inflation
Again, these were similar to those mentioned in 2019 and 2020 surveys.
All of the factors listed above are reasonable to include in the price-setting thought process. However, one critically important issue wasn’t mentioned at all and that was client value. Are ongoing fee increases sustainable without an increase in client value?
Setting fees properly is an important task in a veterinary practice and it’s not an easy one. Read the full report to discover some common flaws in fee setting. VHMA Insiders' Insight Report January 2021.
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