My previous page segues nicely into the next trend 2015 has seen continue, and that is that pet owners seeking discounted pet medications with more abundant retailers available to fill that demand are winning. Truthfully, this was once a very profitable aspect of veterinary clinics that helped to keep the cost of services very low in contrast to comparable health services offered in human medicine. The cost of doing business (state and local taxes, insurance, equipment purchases, equipment service contracts, wage increases, etc.) ranges from 4%-6% each year, yet there was a time early in my career when the veterinary pharmacy was able to soften the impact of these increases and still offer services that were very affordable.
With the loss of the veterinary pharmacy, there is now little buffer to absorb increases in the cost of doing business. With very high overhead expenses that devour 80 cents of every dollar of revenue brought in (and that is only the most efficiently run veterinary hospitals) that increase yearly at a rate of 4% – 6%, in order to stay in business, stated increases must be passed on the cost of services.
Thus, while clients may be able to enjoy their discounted pet medications purchased online, the trade-off is that they now pay a lot more for surgical procedures and other medical services, which are likely poised to increase 4%-6% each year for the foreseeable future. Seeing the big picture, the veterinarians’ perspective is that it would be better to have it the other way around: to pay a few more dollars for routine preventive medications bought from the brick and mortar veterinary pharmacy, but pay less for life sustaining health services, such as diagnostics, hospitalization and surgery. While veterinarians initially pushed back against this trend, we quickly realized that we were powerless to stop it; with pockets not deep enough to counter the large retailer’s massive marketing campaigns, and a population of pet owners that love finding deals online.
Next: Despite Dire Warnings of From Veterinarians, Americans Are Still Largely Resistant to Pet Insurance (Final Thoughts 2015 Continued)