Economic Outlook for Veterinarians
Monday, December 1, 2014
The preliminary information was released today at the AVMA’s Annual Economic Summit held in Chicago and attended by nearly 200 veterinarians, academicians and economists. A final report detailing the findings will be released in January 2015 as the first installment of an ongoing AVMA series of articles exploring veterinary economics.
"The work presented at the 2014 Veterinary Economic Summit represents the first effort of moving beyond the ‘one-time’ workforce study by attempting more sophisticated analysis," said Dr. Michael Dicks, AVMA director of veterinary economics. "Many of the past studies have relied on assumptions where data or economic relationships are missing. This summit replaces some of those assumptions with economic relationships acquired through quantitative analysis that uses data gathered from veterinarians in surveys."
The AVMA conducted four economic surveys in 2014, including an employment survey, a survey of senior veterinary school students, a biennial economic survey and a capacity utilization survey. The Association of American Veterinary Medical Colleges also conducted a survey of veterinary college applicants. These surveys contained information that allowed for the estimation of supply-and-demand characteristics in the markets for veterinary education and veterinarians.
"No other group has studied the veterinary workforce to the extent we have," said AVMA President Dr. Ted Cohn. "No one has ever produced this type of data, and this information is critical to all of us if we are going to have informed, authoritative discussions about the state of the veterinary markets and what we can do collaboratively to improve them."
The surveys will continue annually, and new surveys will be added as the need arises for the information necessary to better estimate supply-and-demand characteristics in the veterinary profession, Dicks said.
The 2013 workforce study revealed excess capacity in the veterinary profession of 12.5 percent, meaning that 12.5 percent of veterinarians’ capacity to provide services was going unused. It did not indicate a 12.5 percent unemployment rate. This year, the AVMA reports that total excess capacity has dropped overall since 2012 and should remain under 10 percent for the foreseeable future. The percent of veterinary practices working at full capacity is up considerably from 35 percent in 2012 to 50 percent in 2014.
News is also positive when it comes to veterinary unemployment, Dicks said.
"Veterinary unemployment is at 3.4 percent, which is lower than the U.S. national rate of 6.1 percent and lower than even historically low unemployment levels," he said. "This and other data show that the veterinary profession is able to absorb and employ veterinary school graduates."
Dicks said that job growth in the veterinary sector will continue upward through 2025, with an accompanying drop in excess capacity.
"We are optimistic about these findings, but we also have to remain realistic," Dicks said. "This is all good news, but there’s some not-so-good news too."
The AVMA and many other veterinary associations remain concerned about the debt-to-income ratio facing veterinary school graduates. Starting salaries for new veterinarians are flat since the last recession, while costs for education continue to increase. The research and surveys also show that the veterinary profession is vulnerable to downward turns in the economy, which became clear during and after the Great Recession of 2007-2009.
"We’ve learned that the veterinary profession and the demand for veterinary services are heavily influenced by the economy, as we took a large hit during the recent recession," Dicks said. "We learned that for every $1,000 drop in personal disposable income, veterinarians see a nearly $1,700 drop in their practice income. Veterinary care spending, particularly for pets, is discretionary spending, and the recent recession provided added evidence of that."
Dicks said that the ongoing collection of data will remain a focal point of the AVMA’s Veterinary Economics Division, and he reiterated that robust data collection by varied veterinary stakeholders is critical to helping paint a clearer picture of the veterinary business sector.
"We emphasized last year when the 2013 workforce study was released that the report and its findings are a starting point and not the end of our efforts to ensure adequate access to veterinary services and the economic viability of the veterinary medical profession," he said. "We continue to subscribe to that philosophy today. We need even more data, and we are asking our colleagues across the veterinary profession to help us gather and analyze information for the benefit of the profession across all disciplines."