Good evening, good evening, welcome to tonight’s FB live – Why Are Vets So Expensive and What Can You Do About It.
We’re going to have two parts to this webinar:
- Why are vets so expensive and
- What can you do about it?
The first part is why are vets expensive?
The answer here depends on your point of view.
Let me give you a little bit of my background.
I sold my practice at Greenhills (it was a very large practice that I’d built up between 1977 and 2004. I sold it in 2004 and I was lucky enough to spend between 2004 and 2017-18 traveling the world, working with vet practices, presenting, coaching, speaking, consulting, etc.
I got an extremely good view of the veterinary economy all over the world. And I’d like to share some of those figures with you because they’re quite eye-opening.
The first thing;
The average new graduate vet out of all the professions that come out of university comes in at about number 16 on the wage scale.
The average vet starts on about 45,000 to 47,000 Australian dollars a year, after five years of university.
They are typically 21, 22, and 23 years of age at that stage. By this time a carpenter or a plumber or an electrician has been working for a long period and has been able to put a significant amount of money into the bank!.
Number two;
The average vet by the time they retire at 65 or thereabouts – 75% to 80% will retire on less than the median wage.
A vet who starts at $45-$47,000 by the time they’ve been out seven, eight, maybe 10 years might be up to $70 to $80,000 and when they’re in full production, in their prime at about 10 years after graduating, they will typically be paid $100,000 or $125,000 a year.
Maybe not what you thought the average vet was getting…
A lot of people tell me that I’ve got a Ferrari sitting in the backyard and a boat on the dock in Sydney somewhere.
Those things are not real, they’re myths, they’re not really reality.
Number three – practice profit
The average practice profit is a lot less than you might imagine as well.
The average practice profit in Australia at the moment is seven to eight percent.
Let’s do the maths; if a practice turns over a million dollars, then the practice profit is seven or eight percent. A well-run practice might generate maybe nine percent and some exceptions practices can get up to 12%.
7% – 8% profit – that’s 70-80-90,000 dollars.
Let’s look at other businesses; perhaps a shoe store or a dentist or even a McDonald’s franchise.
If you owned a business and you are only getting seven or eight percent profit, then you might not be very happy with that.
Depending on how you look at a practice it may appear to be expensive but the money’s not going into the pocket of the vet or the pocket of the nurses and receptionists or anyone else who works in the practice.
Nurses and receptionists aren’t paid very well either, nor are groomers, kennel staff, or practice managers.
The average nurse/receptionist on a full-time basis will earn about $21 to $23 an hour as full-time pay. That’s less than someone gets for sitting behind the BP counter and punching in your credit card details when you fill up with petrol.
It’s certainly a lot less than someone gets at Woolies, Coles, Aldi, or working in hospitality.
Let’s be honest; it’s a lot less than is paid in most industries.
There are a lot of misconceptions about the profitability of veterinary practices and the amount of money that the nurses and receptionists get and the veterinarians get for the hard hours and times that they put in.
What makes the situation even worse is that we are emotionally blackmailed on a VERY regular basis by clients saying things like; “If you really loved pets you’d be doing it for free”.
But the average nurse takes home about $40-$45,000 (before taxes) a year and that’s with their regular overtime.
As I said earlier, a new graduate vet makes 45-47,000, and someone who has worked for eight, seven, or eight years maybe $80,000.
Truck drivers, carpenters but everyone earns more than that.
Vet med is a very, very, very, very poorly paid profession.
- In Germany, the average practice owner earns 80,000 Euros and the average practice owner is a female veterinarian and she’s supported (financially) by her husband.
- In Spain, the conditions and pay are even worse. A few short years ago, many new graduate veterinarians were earning less than $30,000 per year.
This is worldwide.
And unfortunately because of the poor conditions in veterinary practice at the moment many, many, many vets are leaving the industry.
On average 25 to 30% of our teams leave the industry every year. That’s vets, nurses, and receptionists because of the lack of pay and the poor conditions in veterinary practice…
…. and also because many, many clients are over-demanding and rude.
Many clients want so much from us – and if it was just a few clients that might be okay/manageable. However, work conditions are becoming worse with overbearing, over-demanding, and thoughtless clients.
As A Profession…
…we have the highest suicide rate of any profession. That’s six times the average of the public.
So it’s terrible work conditions really – the public just doesn’t see it.
Let’s now look more deeply into the costs of running a Veterinary practice – it costs a lot of money to run a practice.
As I said a minute ago – the average practice profit is 7% to 9% and that’s because of the huge costs involved in running a practice PROPERLY;
- the cost of the drugs are so huge
- the cost of the equipment is so huge
- and labour costs are also high
In just the last 12 months at HVH, we have put in over a quarter of a million dollars of equipment to keep the practice up to the standards that you as a client deserve, expect and need.
Let’s now look at the other side of the coin.
Yes, there are practices that are very cheap.
I can point you at many practices that will do procedures for a quarter or a half of what their neighboring practices do things for.
You might get and I was talking to a client the other day and they were getting a dog vaccinated for $55 whereas in Bowral, on average, you would pay $90 to $95 or a hundred dollars for a five-in-one vaccine dog vaccination and annual health check.
- And charging just that $55 means no profit to the practice at all, it’s barely break-even.
Therefore, those practices can’t afford to put in good equipment, they can’t afford the money to send staff to conferences, seminars, etc – to keep up with their study/learning. And there are many other things they can’t afford to do or get done.
In those practices, you would be treated like a sardine, as a number.
- You’d walk in the door and your eight o’clock appointment would happen at nine o’clock or 9:30.
- You wouldn’t get vaccination reminders.
As I was saying, there are veterinary practices that are very inexpensive. And typically if a practice is making a bare minimum amount of money, like a 7% – 9% profit then to keep those price3s so low, something has to suffer.
Typically the two areas that suffer in this situation are;
- client service
- patient care
I’d hate to say that any patient ever doesn’t receive the care that they should or the treatment they should but unfortunately, it sometimes happens.
- For example, practices might not be able to upgrade the equipment necessary to monitor patients when they’re in hospital, to the degree that they could be monitored.
- They won’t have the facilities to do the in-house testing laboratory that needs to be done and therefore patient care is delayed unnecessarily
- Or there might not be enough or the appropriate medication or drugs in stock and therefore patient care doesn’t occur as appropriately as it could.
In many cases, clients like you never know that that’s happened but unfortunately, it does.
I’ve been privileged enough to travel the world for 13-14 years and work with practices on literally every continent and I’ve worked with practices in Europe, the UK, South Africa, The United States, Canada, New Zealand, Australia. I’ve seen what can happen and it’s unfortunate but that’s a fact.
I just want to ensure that people who think that veterinary practices are expensive, are comparing apples with apples and oranges with oranges.
And the other thing is that practices which do have all those appropriate things in place, to monitor animals, to start treatment immediately, to run the blood tests, to take the really good quality x-rays, to do the ultrasounds and whatnot….
… they may need to charge more but the patients receive a better standard of care and there are people who want those standards of care and then there are other people who don’t want or who can’t afford those standards of care.
That’s not good, it’s not bad, and it just is what it is.
Realistically, when many veterinary nurses and receptionists are barely living a hand to mouth existence and many veterinarians are not making a very good income and suffering from severe emotional stress, thoughts self-harm, and not being fairly compensated, these practices can’t cut their prices even further to be, ‘cheaper’ than they already are.
Now to the issue of online medications and online drugs and yes, in a lot of cases you can buy medication cheaper from online stores and whatnot.
- BUT the unfortunate fact is that many of those online stores are at the moment selling drugs for less than they can buy them for. And the reason is they’re trying to corner the market and they will keep the prices low for a year or two or three. They’re multinational conglomerates and they have huge buying power, they can cope with losing money for a few years, and then as soon as the competitors are out of the market, they’ll start raising the prices up.
- Currently (in Australia) there are court cases in place against a number of online stores for their anti-competitive strategies. It will be interesting to see what ensues from them.
- The other thing about online medication purchases is whether in fact you’re buying a true product with the ingredients in it that you are paying for.
There was a study performed in the UK that about four or five years ago now. This study looked into both human and veterinary healthcare with respect to, if you buy a product online and that product arrived at your door or at your post office box, was that product you actually ordered and was that product actually efficacious.
To put it simply – did you actually buy the real thing or did you buy a dud.
Did it work? Did it have the active ingredient and all that sort of thing?
The study showed that 40%, 4 out of 10, 40% of the medications that arrived might have had the correct name and expiry date and everything else like that and be in the ‘real’ box, but in fact, the product in the box, in the packet was not the active ingredient, was not the right active and was in fact an ineffective. A drug that didn’t work.
- In other words – 40% of the time what you purchased was a SCAM.
Veterinary medication from the Vet
When we receive products from our wholesalers, they’re packaged in ice, they’re not sent over the weekend (because they’ll become warmed which will render them ineffective), all those sorts of things happen.
When you get medications from us, we know that the quality is guaranteed, when things get sent through the post and come from some sort of online store then there are TWO big issues as well as a number of smaller issues.
The two big ones are;
- it not maybe being the right product – it may be a scam, a dummy product
- storage (at the online store warehouse) and poor/inappropriate storage, handling, and postage will have ensured that that product has been rendered ineffective by the time it arrives at your door.
As you can see, there are a number of serious issues there with respect to why buying stuff online may not always be a better solution.
I can go into more detail into this on some other webinar and I’m only too happy to explain the ins and outs cost of running a veterinary practice and whatnot and why most vets and their teams aren’t ‘rolling in money’.
But I want to move on to the second part of the training or the webinar tonight which is What Can You Do About It?
