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!.
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?
There are a number of things that you can do to ensure that you minimize veterinary costs.
The TWO Big Pet Killers
Two biggest pet care issues, the two biggest things that are going to kill your dog or your cat in the modern day is;
- dental disease
If you keep your pet at a normal, lean, healthy weight, you;
- decrease cancer risks
- you decrease arthritis risk
- you increase longevity
Number one – Weight
There are a massive number of benefits, to both you and your pet, by simply keeping your pet at the correct weight.
Number two, dental disease.
Dental disease and obesity are the two biggest killers of the modern.
Studies show that 85% of pets over 18 months of age have significant dental disease.
So if you’ve got a dog or a cat and it’s over 18 months of age, then there’s an eight and a half-chance out of 10 that your pet has got significant dental disease.
- Dental disease and obesity are the two biggest killers of modern pets.
When you give your pet a diet that is going to prevent or minimize dental disease, then you are going to maximize potential for longevity.
Don’t believe the stuff you read about dental treats and dental food and dental additives and dental toys and dental whatever……
Most of those things are not worth it and don’t work.
We’ll do training on what really works at some stage in the future. I’m actually this weekend recording a video on dentistry and dental stuff and what really works. Watch out for that video, it’ll be up fairly shortly.
- If you can prevent obesity, minimize dental disease, they’re the two biggest things that you can do to improve your pet’s longevity and minimize veterinary costs.
Number three, good food.
Food essentially is what you pay for you get.
Cheap foods like the foods out of the cheaper supermarkets and I’m saying Aldi, Coles, Woolies as examples.
Now if you buy food at those places, you’ve got a two or three or four hundred dollar weekly household budget and when you pick up the dog food or the cat food bag that you are going to put that bag in your trolley, you’re not looking to spend a hundred dollars on dog food or cat food….
…. You are going to spend 20 or 30 or 40 dollars
I’ll say it again; what you pay for is what you get.
And those foods are cheap, they’re nasty, they’ve got lots of nutritional lack and they’ve got lots of nutritional excesses.
- The lacks mean that your pet’s not getting what it what he or she needs to live optimally
- And the excesses mean that your pet’s liver and kidneys have to work overtime to get rid of all the crap that’s in the food.
Go online, go to a pet type store or a pet store, food store, come to a vet and get good quality food that you may pay 100 or 120 or 130 dollars for a 15-kilo bag and that food will be hugely better, will hugely help your pet live a longer, healthier, happier life.
- THESE are the three big keys to minimizing vet costs: food, nutrition, obesity.
Comprehensive Annual Exam
The other thing to remember is seven to one.
Seven years in your life is equivalent to one year of your pet’s life.
You NEED to bring your pet to see me every 12 months, that’s seven years in your terms, and have that annual health check, comprehensive examination. It may or may not include a vaccination, a vaccination may not be relevant, and it depends on your pet’s individual situation.
Get that annual health check because early detection of disease allows earlier treatment and therefore better patient outcomes.
You know, an $85 consultation fee or a $70 or $90, $100 consultation fee, whatever your vet charges for his/her consultation is a minimal cost, a minimal investment in the long term health of your pet because there are so many diseases and other things that could be picked up earlier and treated earlier.
Modern veterinary medicine is actually phenomenal at ameliorating, minimizing, improving disease once it’s caught.
Now we get to insurance, pet insurance. And is pet insurance worth it or not?
I’m going to give you my broad brush opinion and that is for cats, no.
For most dogs, probably not.
For some dogs, some breeds, yes.
In Australia, we’ve got some 23-24 pet insurance companies. The underwriters for those companies there are only two of. One is Hollander who runs out of South Africa and the other company runs out of Melbourne.
In my previous life, I was lucky enough to be able to see how all this runs behind the scenes.
I was invited into the offices in North Sydney where the Hollander group is based and you’ve got 22 reps sitting at 22 tables all in the same room answering phone calls for Woolies pet insurance, Coles pet insurance, RSPCA pet insurance, LD pet insurance, etc.
Because all these companies are underwritten by the same company, they’ve all got to make the same profit margin. And so all their products all give or take in various different areas to allow that same profit margin at the end of the day.
My answer to you there is, read the policy really really really really carefully.
I’m happy to talk to you about this on an individual basis for your individual pet at any stage that you’d like me to do that. But gee, be careful, it’s a can of worms, it’s a nightmare really.
Your Own ‘Pet Insurance’
You might be best off if you were going to pay seventy dollars a week or seventy dollars a month for your pet insurance, you may be better off taking that money and putting it into a bank account, totally separate from your normal bank account and keeping it just for the pet. That may very well cover all your pet bills. It’s worth thinking about.
And lastly, what I’d like to talk about are things like ‘Value Plans’. Many practices have them.
At HVH we have these pet value plans that we’ve created for pets over seven years of age.
There are two plans, one for seven to ten year old pets and one for ten year old plus pets.
Many practices will have similar plans
These plans are exceedingly inexpensive and they are monthly plans. They allow you to budget for your pet’s health based on a monthly investment of 30-40 dollars, something like that, $50 depending on the plan that you choose.
That plan will cover basically all or nearly all of your pet’s health costs for a 12-month period of time and all the things that need managing;
- dental disease
- hypertension in cats which is quite common
- heart disease
- bladder issues
- kidney disease
- liver disease
- glaucoma, etc
There are so many things in here.
There are so many benefits to these types of plans.
There are so many benefits to plans like that and we certainly have some great, two great plans at HIGHlands Veterinary Hospital.
Many practices have plans that are similar, are monthly, and cover all your general health, pet health care costs for a 12 month period of time.
That’s really all I wanted to go through. We’ve been on here for about 28 minutes, which I think is more than enough.
If we summarize, considering what you get from your veterinarian, I don’t think veterinary expenses are expensive, especially when you look at what people in the industry vets and nurses take home as their wage.
And yes, you can get cheaper veterinary costs, to go to cheaper practices, but unfortunately, it’s typically the pet that misses out.
I know for example that when we de-sex or do surgery on pets, the pet goes home with pain care ‘built in’, we don’t charge any extra for it.
But I know that there are other practices, even in this area that if a pet has surgery, and they then ask you whether you want to pay for pain relief for that pet.
I think this is really inappropriate. How can you – a layperson make that decision? You have not had that 6 years a University that the vet has had.
It would be like my mechanic asking me what part to put where when he’s repairing my car.
I think it should be included and it’s the same with anaesthetic monitoring or intravenous fluids.
If you go into hospital and you’re sick, you’re going to be put on a drip, you’re not going to be asked whether you want to be put on a drip; it’s just going to happen.
In some practices, that’s an ‘optional extra’.
That’s it for tonight.
We’ll be doing a transcript and posting this on Facebook and on our website and make it available through the App.
I hope I’ve answered all the questions that you had about this topic. If you’ve got any others, please post them to Facebook or send them in on the email and I’m only too happy to answer them. And I look forward to catching up with you in a month’s time when we do another Facebook live, good night.