Veterinary Clinic Markups

DVM Magazine, which surveys veterinarians every three years, published results of its latest survey in the June 2006 issue. Findings included the following:

The average spending for a customer at veterinary clinics is $106/ visit. This is called the average client transaction (ACT).
Clinics with 4 or more veterinarians have higher ACTs ($120) than clinics with fewer veterinarians.
Over 30% of a clinic’s gross revenue is from annual exams and vaccinations. This is the largest source of veterinary revenue. Other sources of revenue include surgery, diagnostic tests, pharmaceuticals, pet food sales, heartworm and flea medications.
Taken together, pharmaceuticals, pet food sales, heartworm and flea medications are about 30% of gross revenue.
Over 60% of veterinarians say web sales are their greatest competition.
The largest markup is on vaccines.
Clinic markups on therapeutic pet foods are increasing.
Competition has cause clinics to lower their markup on pharmaceuticals, flea products, and heartworm meds.
The largest clinic expense—after salaries—is pharmaceuticals and supplies.
Most veterinarians say rising costs are a pressing concern.

Markup of Prices in 2003 and in 2006
Vaccines 244% 143%

Pharmaceuticals 122 116
Heartworm meds 98 81
Flea products 94 78
Therapeutic food 38 48
Premium food 34 46
Pet supplies 87 75

The June issue of DVM Magazine described legislation that one state, Pennsylvania, is attempting to pass:

It will be illegal for a veterinarian not to prescreen pets receiving drugs manufactured by pharmaceutical companies that recommend prescreening.
It will be illegal for a veterinarian not to include an adverse drug reaction sheet before administering or prescribing drugs that have adverse drug reactions.

What the first bill means is that veterinarians are being encouraged by law not to skip exams and blood tests that help predict whether pets will be good candidates for drugs that are potentially dangerous. Pharmaceutical companies don’t want their drugs blamed for causing side effects when the drugs are given to pets who should not be receiving them. The bill also strengthens veterinarians’ recommendation that pets should undergo exams and blood tests before receiving certain medications. Some pet owners will feel their vet is requesting unnecessary tests. If you don’t trust your veterinarian, find another. If you trust your veterinarians, follow their advice.

The second bill means pet owners must be informed of potential negative effects of drugs. This bill was prompted by the death of a pet from Rimadyl. Rimadyl and other nonsteroidal anti-inflammatories can cause bleeding ulcers, kidney and liver disease. In this case, the family had no warning that these negative effects were possible, and their dog died. Has your veterinarian been discussing possible negative ramifications of drugs with you? If not, do you want to wait until there is a law passed demanding this disclosure, or do you want to find a veterinarian who discusses drug-induced side effects? The more you know, the better you can help your pet.

If this legislation is passed in Pennsylvania, other states may write similar bills.