How small animal practices are coping - Veterinary Practice
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InFocus

How small animal practices are coping

MALCOLM WRIGHT summarises the findings of the latest Vetbiz survey of companion animal practices

A SURVEY undertaken by Vetbiz Solutions gives an insight into the way the recession is affecting veterinary practice.

This was undertaken between April and May 2009 and involved the views of 67 practices throughout the UK.

An earlier survey taken in November 2008 had asked about changes in turnover in the previous six months. This showed that 24% of practices had noticed a reduction in income with the remaining 76% not appearing to be affected.

The practices were all asked in the latest survey how they expected their turnover to change over the next 12 months. This showed that 15% expected a reduction with 40% expecting turnover to remain static. Effectively, 55% showed a negative response to increasing turnover; of the remaining practices 6% were expecting a marked increase.

With CPI inflation still running at 2%, this would indicate a worsening financial situation in over 50% of the practices surveyed.

An interesting comparable survey3 was undertaken in the USA by NCVEI (National Commission on Veterinary Economic Issues), asking practice owners how they saw their revenue in 2009 compared with 2008. This revealed that 31% expected revenue to increase, 33% thought it would be about the same, 28% expected a little less and 8% a lot less.

Spending

When asked by Vetbiz how the change in turnover would affect staffing levels, the response showed that 22% were expecting to reduce staffing and 14% expecting to increase staff numbers with the majority maintaining constant levels.

Spending was again affected with 25% of practices having reduced CPD. When asked, practices noticed the following effects:

Have you noticed clients taking longer to pay?

Yes 49.25%

No 50.75%

Have you noticed a continued increase in overheads?

Yes–marked increase 25 (37%), slight increase 39 (58%)

No increase 2 (3%)

Fees

Practices were asked how they would respond with fees in the next 12 month.

With CPI inflation expected to run at 2%, 48% of practices said they would be increasing prices either in line with or below the inflation rate – 7% said they would be increasing fees by over 4%; 42% said they would raise fees by 3%; 25% said they would increase them by up to 2%; 22% expected to main them and 3% said they would reduce them.

Turnover per veterinary surgeon

The Fort Dodge Survey1 Q4 2008 – SA turnover=£232,247.

Vision on Line MAI2 Survey-Dec 2008 – SA turnover=£222,526.

The practices questioned were targeting the following projected increases per vet employed per annum: over £275,000, 10%; £250,000- £275,000, 10%; £220,000-£250,000, 10%; £200,000-£220,000, £13%; £180,000-£200,000, 12%; £160,000- £180,000, 21%; and less than £160,000, 22%

As a comparison, in the USA the best managed practices are obtaining turnovers in the region of $750,000 (£450,000) per vet.

Threats

The major threats facing practice growth and development were perceived to be increasing regulations (73%) that are being placed on practices and the reduced spending power of the client base (66%).

Recruitment difficulties also continue to be a problem (33%) as are increasing staff wages (34%). Reduction of freedom in clinical choice was perceived as a threat by 24%.

Conclusion

The survey shows that most practices are being affected by the recession. Whether this is a national picture or whether there are micro economic factors affecting certain areas, where larger job losses have taken place is difficult to determine.

The increasing regulations and recruitment difficulties compound the problems of the economic downturn and practices are facing threats from a variety of sources. Even as we come out of the recession these may continue to be problems as we face a protracted period of Government debt repayment which will affect everyone’s disposable income due to the requirement for increased taxation.

For practices to succeed in these challenging times means improving both the quality and range of the services that they provide. 1. The Fort Dodge Survey Q4 2008 2. Vision on Line MAI Survey-Dec 2008 3. National Commission on Veterinary Economics Issues (USA)

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