The cost of veterinary care has risen faster than inflation for the past two decades. Is your veterinarian’s salary the cause of higher veterinary bills? Probably not, according to a new study.
The American Veterinary Medical Association economics team recently completed a study examining veterinary salaries in the US over the past couple of decades to see if rising veterinary salaries account for the increase in veterinary costs. The team found that while mean income for veterinarians rose until 2006, it is now declining. In fact, when accounting for inflation, veterinary compensation is decreasing. An influx of younger veterinarians, more women in the profession, and a decline in practice ownership may account for the decline in compensation.
As older veterinarians retire, new graduates earning on average less than $80,000 per year take their place. Right now, Generation X professionals are reaching their peak earnings capacity. But they are outnumbered in the veterinary profession by Millennials, who are working at or near entry level salary. The number of new veterinarians entering the market is expected to outpace retirements for the next decade or so. That may continue to keep the average salary low.
More women in veterinary medicine
There are now more women entering the market as veterinarians than men. Unfortunately, women have historically been paid less than their male counterparts, and this trend continues. In 2011, the gap between median male and female veterinary salary was $24,000. The AVMA reported in 2015 that on average, female veterinarians make $2406.97 less than males. Until salaries become more equitable for women in veterinary medicine, income growth may remain slow.
Decrease in practice ownership
Owning a practice has been one way veterinarians earn more money in their careers. However, it takes substantial time to start a practice. For instance, more than 70% of veterinarians who graduated between 1970 and 1979 own a practice. In contrast, only 6% of those who graduated between 2010 and 2015 own a practice. And the trend is for veterinarians to wait longer to buy a practice.
How much is a veterinarian’s salary?
The study found that the mean salary for veterinarians in 2016 was about $112,000. To put that into perspective, remember that new veterinary graduates come out of their 8-year college experience (including undergraduate and veterinary school) with an average of $167,000 in debt (2016). Veterinary medicine is not a quick and easy path to riches.
What is behind rising veterinary care costs?
Harvard Business Review explored the similarities and differences between human and veterinary medicine in 2017. Costs are rising in both of these sectors. Rising healthcare costs for humans are attributed in part to the burden of a heavy regulatory framework and involvement of insurance companies. These factors do not influence veterinary medicine. The authors speculate that introduction of new technologies in both sectors spurs increased costs. Intuitively, increasing sophistication of practice, with introduc tion of expensive new instruments and the expertise to use them, should lead to increased cost for services.
The authors note that in both human and veterinary medicine spending increases towards the end of the patient’s life. They speculate that one reason costs rise more quickly in healthcare than in other sectors is that healthcare decisions involve emotions to a much greater extent than in other areas. This may play into the “heroic” medicine that is increasingly practiced to intervene in desperate situations. It is less likely to be a factor in preventive care and routine treatments for pets, in my opinion. The authors fail to make clear that neither physicians nor veterinarians use the emotional aspect of medical decisions to increase billing, in general. Rather, heroic care is based on a desire of both the doctor and the patient/client to prolong life.
Yes, veterinary care is expensive. Does that mean that veterinarians are taking advantage of their clients through price gouging? Maybe in rare cases. But overall, veterinarians are an altruistic bunch of people who could have made a lot more money in a different profession.