Rising Veterinary Medical Costs Present Significant Challenges Amid Industry Growth
By Maureen Blaney Flietner
Published April 28, 2025
In the United States, veterinary care spending is set to rise by $41.4 billion this year. The American Pet Products Association shows growth from $35.9 billion in 2022 to nearly $41.4 billion in 2025. Behind this growth, practices face higher costs and financial strain. Costs increase because hiring, tariffs, and expenses work together against smooth operations.
Hiring Costs on the Rise
A main worry is the higher cost of hiring skilled veterinarians. Leslie Boudreau, BASVT, RVTg, CVPM, SPHR, PHRca, leads at the AAHA-accredited Animal Hospital of Huntington Beach in California. She also serves as vice president and incoming president of the Veterinary Hospital Managers Association (VHMA). Boudreau explains that even though the American Veterinary Medical Association says there are enough veterinarians, many choose government, military, or specialized roles. This leaves private practices with fewer staff members.
Boudreau states, "The cost to hire a veterinarian has risen exponentially in recent months." New graduates need careful mentoring and support, which slows work and drives up costs. Many veterinarians now shift jobs, often lured by signing bonuses. This shift forces practices to trim operating hours or close on certain days when staff are missing.
Financial Strain from Tariffs and Insurance
Rising costs from tariffs and insurance also add strain. International tariffs on imported products create uncertainty and raise the cost for supplies like gauze and syringes. At the same time, insurance rates climb, especially with new cyberattack protection rules.
Karen E. Felsted, CPA, MS, DVM, CVPM, CVA, and owner of PantheraT Veterinary Management Consulting in Texas, agrees. She sees three concerns: economic unpredictability, fewer veterinary visits, and ongoing staff shortages. These issues together put the future of veterinary services at risk.
Adaptation Strategies for Veterinary Practices
Faced with these pressures, Boudreau says her practice now "price shops" to manage expenses. As a small, private hospital, they joined buying groups to negotiate better deals. They also offer more cost-effective alternatives. For example, the hospital now streamlines medication options and sells less profitable items online.
The facility also deals with high credit card processing fees. To handle this, they added a small convenience fee for credit card payments—a move that has received mixed reactions from clients.
Felsted suggests several ideas. Practice leaders should focus on excellent client service to keep and gain customers. They should build or review an emergency fund, reduce spending, pay down debt, and discuss safe financial options with clients.
The Bigger Picture
Despite these challenges, Boudreau remains hopeful. She stresses that veterinary practices must get creative and control what they can. "Veterinary practices have to get creative and look at everything within their control," she says.
Even as the veterinary field grows, balancing quality service with financial stability is hard. With rising costs and changing pet owner views, the industry must adapt quickly to support both veterinarians and pet owners.
Conclusion
The veterinary industry now faces rising hiring costs, tariffs, and shifting economic conditions. As practices work to keep high standards of care, creative solutions and sound financial strategies are key. The future depends on innovations that help practices manage expenses and serve their communities well.
For ongoing updates and insights from the American Animal Hospital Association, visit AAHA's official site.
Disclaimer: The viewpoints expressed in this article do not represent an official stance of the American Animal Hospital Association or its Board of Directors.
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