Rising Veterinary Costs Present Challenges for Animal Hospitals Amid Economic Uncertainty
By Maureen Blaney Flietner, Apr 28, 2025
The American Pet Products Association expects more spending on veterinary care. They predict $41.4 billion in the United States this year. Spending has grown each year. It was $35.9 billion in 2022 and $39.8 billion in 2024. Yet hospitals now face rising costs that threaten their work.
Recruitment Struggles Create Financial Dilemmas
Leslie Boudreau runs operations at an AAHA-accredited hospital in Huntington Beach, California. She also leads the Veterinary Hospital Managers Association. She notes that hiring skilled veterinarians has become hard. DVMs now hold strong control over the market. Many choose government, military, or industry jobs. This shift deepens shortages in private practices.
Boudreau adds that hiring costs have jumped in six months. New graduates need close mentoring. This slow start burdens hospitals with extra costs. Many veterinarians change jobs often, even after building strong client lists. They chase signing bonuses. This frequent movement creates instability for practices.
Rising Operational Costs and Supply Chain Issues
Boudreau also sees supply costs soar. Tariffs now raise the price of essential materials. Hospitals pay more for items like gauze and syringes. Insurance costs are rising, too. Hospitals find themselves needing extra liability coverage, including for cyber risks. A small pool of insurers makes matters worse.
Karen E. Felsted, a consultant in Dallas, sees practices struggle with fewer visits and tighter budgets. She explains that when consumers worry about money, they often see veterinary care as non-essential.
Strategic Responses to Financial Pressures
Faced with these costs, Boudreau has chosen clear strategies. Her hospital joined a buying group to boost purchasing power. They now select alternative products, such as generics, to cut expenses. They limit the medications sold directly. Instead, they guide clients to online stores. Although online sales earn less, they help lower costs.
Credit card fees have also surged. In 2023, fees passed half a million dollars. In response, Boudreau added a convenience fee for credit card use starting May 1. Some clients complained, but she believes many hospitals will follow as costs keep rising.
Felsted recommends a cautious approach. She advises practices to improve client service to protect revenue. Hospitals should review emergency funds, cut unnecessary spending, and discuss credit options with banks.
Importance of Open Communication with Clients
Both Boudreau and Felsted stress the need for clear talks with clients about rising costs. They worry that extra fees may harm long-term trust with pet owners. They encourage offering payment plans and discussing care options openly. Honest communication helps keep trust strong.
Boudreau sums up the challenge well. She says the veterinary field must adopt smart, flexible strategies. Rising costs and shrinking profits now press on everyone. Creative solutions and open dialogue are all that can keep practices strong.
These challenges echo larger trends in the economy. Smart plans and clear service are key in hard times. As the veterinary field adapts, careful financial choices and honest client talks will help sustain both care and growth.
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