Are practices seeing a new normal or a return to the old normal?

There seems to be a little bit of both going on right now. Prior to the pandemic, average annual revenue growth in companion animal practices was about 4%-8%, depending on the study, along with small declines in visit numbers. Many practices saw significantly higher growth during the COVID years, but this growth has since reverted to the rates seen previously. According to Vetsource, revenue growth over the last year has been 6.2% with visits declining by 1.8%. Animalytix’s Vetwatch shows a similar trend with revenue growth for the first 10 months of 2023 at 6.3% and declining visits of 1.3%.

Although the growth rates have returned to the old normal, most practices didn’t lose the clients they gained during the pandemic and are thus dealing with a higher base number of pets and pet owners. This is the new normal; practices are still busy and this is exacerbated by the ongoing struggle with staffing issues.

Difficulties in Hiring

This is definitely a “new normal” issue. Prior to the pandemic, it wasn’t always possible for practices to find exactly the people they wanted, when they wanted them and at the salary they wanted to pay, but it was much easier than now. Demand for employees has eased a bit, but is still high.

According to the June 2023 VHMA Monthly Insiders’ Insights survey, 59% of practices were considering hiring DVMs compared to 66% in 2021. The demand for credentialed technicians also dropped a bit (66% to 58%), as for non-credentialed technicians/veterinary assistants (61% to 49%) and front desk/reception staff (50% to 43%.)  The decrease in demand is likely due to the reduced number of visits discussed above, as well as to efforts to improve productivity and efficiency.

Unfortunately, very few VHMA survey respondents think it is any easier to find team members in 2023 as compared to 2022, although, depending on the position, a fair number think it’s not any harder:

More difficult to hire in 2023 compared to 2022 About the same difficulty in hiring in 2023 compared to 2022
DVM 47.4% 46.1%
Credentialed technician 54.0% 38.9%
Non-credentialed technician or VA 42.6% 41.8%
Management position 35.9% 56.3%
Front desk/reception 39.4% 44.1%
Kennel work 27.5% 59.4%
Groomer 22.2% 71.1%

The term “difficulty in hiring” includes several factors, such as the number of candidates interested in the position, as well as the quality of those candidates and their expectations of compensation, benefits, and work hours. This also includes how long it takes to find an appropriate person; according to the VHMA survey, this is especially an issue when looking for DVMs and credentialed technicians. Sixty-one percent (61%) of the respondents said it takes five or more months to find a doctor and 45% said the same for credentialed technicians.

Understanding what veterinarians want in a work environment and in a job offer is critical in attracting and keeping them. This is always important, but absolutely critical during times like these, when it’s a seller’s market (i.e. veterinarians looking for jobs have more clout than employers.) According to new data from the American Veterinary Medical Association (AVMA), the most important factor that new graduates consider when selecting an employment offer continues to be mentoring; about 85% of the survey respondents mentioned this.

Location is next on the list; job candidates know where they want to live and it can be hard to persuade them to go elsewhere. About 75% of the new graduates selected this factor. Other important factors in accepting a job offer include the people in the practice (69%), compensation (62%) and work hours (57%.)  Money and work hours aren’t at the top of the list, but this doesn’t mean they can be ignored, especially if your practice doesn’t offer what is wanted in mentorship, location, and culture.

Efficiency and Productivity

Another “new normal” issue is the increased importance related to improving efficiency and productivity. These have always been important contributors to profitability, but have become even more critical because of the hiring difficulties noted above.

There are many, many changes that practices can make to improve productivity and efficiency; some examples include:

  • Better use of technology:
    • Medical—diagnosis and treatment
    • Medical records
    • Inventory
    • Accounting
    • Management analysis
    • Client communication and education
    • Marketing
    • Administrative—appointment scheduling, client refills, etc.
  • Better use of people (doctors and staff):
    • Improved hiring and training
    • Time management
    • Technician appointments
    • Culture
  • Better processes:
    • Outpatient workflow
    • Inpatient workflow
    • Boarding workflow
    • Inventory

In February of 2023, Idexx released a report titled “Finding the Time: Empowering Veterinary Teams to Get the Most Out of Every Day.” This is an in-depth report regarding the improvement of productivity and efficiency in practices.

Technician appointments were identified as a very important driver of productivity and efficiency and about 90% of the respondents to one of the surveys included in this report stated that they offered technician appointments for at least some visit types. It was clear, however, that there is a very wide range of utilization of technicians in practice and many practices are very limited in what they do.

Data from AVMA/Vetsource indicates that tech appointments make up less than 10% of total appointments in most practices, but the frequency is growing. This analysis showed an increase in the percentage of tech appointments compared to total appointments by about one third from 2020 to early 2023. Of course, frequency is just one important aspect to focus on when improving the usage of tech appointments; another factor is the quality or value of the services performed by technicians in these appointments. According to the Idexx study, practices with the lowest levels of productivity and efficiency offer very few tech appointments at all. Those practices in the mid-range of productivity and efficiency offer more tech appointments, but primarily for “low-value” services such as nail trims and the expression of anal glands. The most efficient and productive practices offer not only even more tech appointments, but they also offer them for “higher-value” services such as vaccines, blood-draws, and the delivery of sub-cutaneous fluids.

While overall revenue and visit growth has reverted to pre-pandemic levels, the factors that drive success in a practice have definitely changed and those are the ones that owners and managers must focus on to see practices thrive in this environment.