The Shift from Volume to Value

Veterinary Demand Continues to Decline Nationwide as Pricing Supports Revenue Growth

Something we have been seeing for the past few years in vet med is that the demand for services continues to decline year over year, but revenue continues to grow meagerly, barely outpacing inflation. What is causing this? Well, before we get to that, let’s dive deeper into the numbers and forecast.

Overall visits per client are trending down year over year, suggesting that pet owners are becoming more deliberate about the frequency and timing of veterinary care. This softening in utilization is an important indicator for the industry, particularly as hospitals face a consumer environment in which affordability and perceived value are increasingly influencing care decisions, compared to years past in the heyday of Covid and before. While demand for veterinary services remains relatively resilient, lower visit frequency indicates that underlying volume growth is becoming more challenging to sustain.

At the same time, veterinary hospital revenue remains positive year over year, but growth is relatively tepid and appears to be driven primarily by veterinary price increases, which equate to higher revenue per visit. Continued price increases across veterinary services are helping offset the impact of declining visit volumes, effectively allowing hospitals to maintain growth despite decreasing demand. However, this dynamic may become increasingly difficult to sustain if price increases continue to outpace clients' willingness or ability to seek care. From an industry perspective, the combination of lower visits and price-driven revenue growth points to a market that is shifting from volume-led expansion toward price- and mix-driven growth, making client retention, preventive care compliance, and clients' perception of value increasingly critical to long-term performance.

As negative as this may sound, don’t fret yet. I am still very optimistic about the veterinary industry in general, as we are a very unique subset of the health care industry that has a long track record of being resilient when the United States has gone through other historical economic constraints. In my subsequent quarterly newsletters, I will dive deeper into why I think we are seeing these trends and what we can do as practitioners and practice owners to set ourselves apart from the competition.

Dr. Eric Mueller, Vice President of Clinical Operations, Evette

Reference: AVMA Veterinary Industry Tracker

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