Recession's in the air: Veterinary pricing, costs, and you
In the past month, three different publications have called me to get my take on the theoretically impending recession and how that’s affecting my income. It’s kind of a personal subject but I’ve never been known to be shy on the topic of my own finances.
In this case I’m happy to report that I’ve yet to see any changes in how my clients react to the news that their pets need X, Y or Z treatment. It’s business as usual for us here in South Florida—at least when it comes to our prices.
Sadly, however, it bears noting that our hospital’s costs have gone up significantly over the past year. I referenced this issue in my first post on pet health insurance and it’s not one you, as consumers of veterinary services, should ignore.
Healthcare costs are going up across the board. And veterinary costs aren’t unaffected. Over the past 20 years our costs have risen out of proportion to our prices. A vet practice owner can expect to take home a smaller percentage than ever before. And, of course, it trickles down to the associates, too. Let me give you a laundry list of why that’s the case:
1-Fuel prices have been steadily climbing. And after all, we all rely on shipping.
2-Vet products from drug manufacturers are increasingly expensive in light of the high prices pet owners are willing to shoulder for their pets’ care. A lot more corporate R&D goes into that—not to mention marketing! For vets, that means we have to shell out more in advance of your purchases-and risk losing big on inventory when drugs like Slentrol don’t pan out.
3-Wholesale suppliers, viewing the veterinary market as one flush with cash and increasingly willing to pay a premium on basics such as bandaging supplies and syringes, have upped their prices significantly—almost on par with that of the human medical market. (It’s clear to me that someone out there is making a killing on these fundamentals.)
4-Real estate prices have been through the roof over the past decade. Vet hospitals have not been immune to the mortgage crisis, either.
5-More recently? Fear of recession.
Add to that the fact that we’re largely unwilling to raise our prices at the moment—recession anxiety is part of it—and its clear we’re brewing up a storm of future price increases once it no longer becomes tenable for us to hold firm to these as a result of our inexorably rising costs.
And that’s all going to impact YOU in coming months. The more apprehension affects the increasing threat of recession the more prices will climb in anticipation of a serious downturn in our economy.
I’m not saying it’s going to happen; I’m just saying that fear is in the air. And fear is not good for vet prices—or for the economy as a whole.