Trends at the Most Profitable Veterinary Hospitals
Mr. Terry O’Neil, CPS, CVA presented this one-hour DVM Masterclass Webinar on the trends that he sees from long running research in the most profitable veterinary hospitals. The first series of trends reported is that technology has significantly impacted Vet Med over the last 20 years, and that every indication is that the rate of technology change will accelerate over the next four years.
Mr. O’Neil then spoke to the need to a customer experience mindset and presented several sets of data to show that business in general and veterinary practices in particular that had a focus on customer and employee satisfaction had better profitability, higher profit margins, and better customer and employee retention. Mr. O’Neil noted that a key metric for satisfaction is consistency of service.
Looking forward, Mr. O’Neil expects that there will be about 5 – 6 percent growth year on year for the next few years across Veterinary Medicine. This is a marked reduction in the growth rate seen in prior years. Mr. O’Neil noted that in his view the reduction in growth rate may be a result of the inelasticity of demand as prices for veterinary services have increased. He noted that about 2/3rds of Americans essentially live paycheck to paycheck, and for this group Veterinary bills are moving into a discretionary category.
Mr. O’ Neil reported that on hospitals where there has been a focus on making appointments more affordable for clients. He shared data to show that more affordable appointments can lead to increased profitability. He noted that one driver of increased affordability has been the use AI systems, in diagnosis, and the interpretation of laboratory results. AI systems can also prepare client notes which can remove a huge burden from veterinary staff.
Mr. O’Neil also reported on the average costs of key veterinary service areas (e.g. professional services, pharmacy, laboratory services etc.), discussed markup necessary for these service areas, and the areas where the most successful hospitals were able to better control costs.
This session was recorded, the recording can be accessed here: Trends at the Most Profitable Hospitals.