Rising Veterinary Costs Create Challenges for Industry
Financial Snapshot Amid Rising Expenses
The American Pet Products Association expects veterinary care and products to cost $41.4 billion in the United States this year. Spending rose from $35.9 billion in 2022, $38.3 billion in 2023, and $39.8 billion in 2024. These numbers look good, but veterinary practices face tight financial pressure. Costs go up while their income does not keep pace. Every cost link stays close to its next cost link.
Recruitment Challenges and Workforce Issues
Leslie Boudreau runs the AAHA-accredited Animal Hospital of Huntington Beach in California. She sees firsthand the hard work her peers do across the nation. Hiring veterinarians now costs more. Veterinarians find jobs that give them more power; they soon pick a better offer. Boudreau says that the American Veterinary Medical Association notes that there are enough veterinarians. Yet, the vets stay in one place only rarely. New graduates choose government jobs, military posts, or relief work. These trends force private practices to pay more for new, less experienced vets.
Boudreau also sees staff “bouncing.” New veterinarians work for a brief time to build a list of clients. They soon jump to another practice when signing bonuses appear. Colleagues say they cannot fill positions. Many practices even cut hours or close on some days. The staff shortage makes every link short and hard to complete.
Escalating Expenses Beyond Staffing
Other costs start to increase too. Hospitals worry about tariffs. Tariffs shake the price of overseas products and raw materials. Essentials like gauze and syringes cost more. So do many insurance types, such as liability or cybersecurity. Karen E. Felsted, a veterinary consultant in Dallas, Texas, shares Boudreau’s concerns. Felsted sees economic uncertainty, fewer client visits, and fewer available vets as the top problems.
Felsted adds that clients now hesitate to spend. Pet owners tighten their budgets. Veterinary care may seem less needed when money is short.
Adapting to the New Landscape
Veterinary practices now take active steps to meet these issues. Boudreau explains that her hospital joins buying groups. This group buying helps them control the price of needed supplies. The hospital also changes billing practices. It now charges a fee for credit card use. In 2023, the hospital spent about $500,000 on credit card fees. This fee makes clients thoughtful about how they pay.
Felsted suggests several cost-saving ideas. Hospitals should:
• Focus on client service to keep and gain clients.
• Review or create an emergency fund.
• Use stricter spending rules.
• Look into extra credit lines to face tough times.
Navigating Client Relationships
Felsted stresses clear talks with pet owners about rising costs. Pet owners notice price hikes, and large fee jumps can harm trust. Practices need to offer several ways to pay. The goal is to help clients and maintain the clinic’s strength.
Both Boudreau and Felsted agree that fresh ideas solve problems. They now think hard about how to deliver services and control costs. This new approach is vital in today’s tight economic space.
As the veterinary field changes, all industry members must stay alert. They need to adjust quickly to deal with these financial challenges.
Disclaimer: Information in this article is meant to inform and educate the veterinary community. It does not reflect an official position or endorsement by the American Animal Hospital Association (AAHA) or its Board of Directors.
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