2

Companion-Animal Medicine

This chapter describes the workforce changes in the companion-animal sector over the last 30 years, assesses the current need for companion-animal services, projects the demand for companion-animal veterinary services in the next five years, and estimates the supply of companion-animal veterinarians in that time period. Finally, alternative models for meeting the needs for companion-animal veterinary services in the future are proposed.

COMPANION-ANIMAL VETERINARIANS

Of the 90,201 members of the American Veterinary Medical Association (AVMA) employed in the United States in 2010, the employment status is known for 76,803 (85%) (AVMA, 2011a). Of that number, over 70% spend all or part of their time devoted to companion-animal practice, a proportion that has remained relatively steady for the last 14 years, having increased markedly since the 1960s (AVMA, 2010a). Most companion-animal veterinarians spend 100% of their time on companion animals (companion-animal-exclusive). The remaining are categorized by AVMA according to the estimated amount of time they spend on companion animals: 90% (companion-animal-predominant), 49% (mixed animal), and 6% (food-animal-predominant) (AVMA, 2009a).

LIFESTYLE BENEFITS OF COMPANION-ANIMAL MEDICINE

Veterinarians in private practice are typically practice owners or work as associates in practices established by others, including animal health care companies, such as Banfield, which, with a network of 2,000 veterinarians and over 750 pet hospitals, is the largest such firm in the United States. One factor that attracts veterinarians to companion-animal private practice is lifestyle. Although most companion-animal practitioners work full-time, they work the least number of hours per week of all private practitioners (AVMA, 2009a; AVMA, 2011a).



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2 Companion-Animal Medicine This chapter describes the workforce changes in the companion-animal sec- tor over the last 30 years, assesses the current need for companion-animal ser- vices, projects the demand for companion-animal veterinary services in the next five years, and estimates the supply of companion-animal veterinarians in that time period. Finally, alternative models for meeting the needs for companion- animal veterinary services in the future are proposed. COMPANION-ANIMAL VETERINARIANS Of the 90,201 members of the American Veterinary Medical Association (AVMA) employed in the United States in 2010, the employment status is known for 76,803 (85%) (AVMA, 2011a). Of that number, over 70% spend all or part of their time devoted to companion-animal practice, a proportion that has remained relatively steady for the last 14 years, having increased markedly since the 1960s (AVMA, 2010a). Most companion-animal veterinarians spend 100% of their time on companion animals (companion-animal-exclusive). The remain- ing are categorized by AVMA according to the estimated amount of time they spend on companion animals: 90% (companion-animal-predominant), 49% (mixed animal), and 6% (food-animal-predominant) (AVMA, 2009a). LIFESTYLE BENEFITS OF COMPANION-ANIMAL MEDICINE Veterinarians in private practice are typically practice owners or work as as- sociates in practices established by others, including animal health care compa- nies, such as Banfield, which, with a network of 2,000 veterinarians and over 750 pet hospitals, is the largest such firm in the United States. One factor that attracts veterinarians to companion-animal private practice is lifestyle. Although most companion-animal practitioners work full-time, they work the least number of hours per week of all private practitioners (AVMA, 2009a; AVMA, 2011a). 28

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Companion-Animal Medicine 29 Companion-animal-exclusive owners work a mean of 45.9 hours per week (me- dian 45), compared to food-animal-exclusive (mean 52.7 hours, median 51.5 hours) and equine (mean 53.8 hours, median 53.0 hours) practice owners. The comparison for associates is similar, with companion-animal-exclusive associ- ates working a mean and median of 44.2 and 44.0 hours per week, or approxi- mately 8 hours less than food-animal-exclusive associates, and approximately 14 hours less than equine associates (AVMA, 2011a). In addition to working fewer hours in general, the development of emergen- cy clinics in urban and suburban settings has diminished the after-hours obliga- tions for companion-animal practitioners. In many instances companion-animal practice owners in a region cooperate to establish emergency clinics that see clients from all practices after-hours. These factors and others serve as incen- tives to attract a majority of new veterinarians entering the profession to pursue companion-animal private practice. Earnings1 The median and average incomes of companion-animal practice owners re- flect different aspects of the earnings of that workforce. A number of very high earners in the industry pull the average income upwards. The median might be a better indication of the income of most of the mid-level earners. However, the trends in both measures can be useful. In 2007, the median income of a compan- ion-animal-exclusive practice owner was $133,000, which was about the same as practice owners in food-animal or equine private practice. In 2009, the medi- an income of exclusive practice owners increased to $139,000, while that of food-animal-exclusive and equine practice owners was $133,000 and $109,000, respectively. Between 2005 and 2009, the average income for companion- animal-exclusive practice owners increased from $142,501 (2005) to $155,518 (2007) to $171,119 (2009) (AVMA, 2011a). The median income of a companion-animal-exclusive associate in 2007 was $85,000, demonstrating the substantial financial benefit of practice ownership over an associate position. However, salaries are rising for associates as well as owners. Between the years 2005 and 2009, the average income for companion- animal-exclusive associates rose from $79,827 (2005) to $91,592 (2007) to $97,074 (2009) (AVMA, 2009a; AVMA, 2011a). The companion-animal- ex- clusive associates in the 90th percentile of earnings saw their mean income in- crease 22% ($109,000 to $133,000) from 2005 to 2007 (AVMA, 2009a), and to $145,000 in 2009 (AVMA, 2011a). 1 Veterinarian salary data are drawn from AVMA Compensation Surveys, which are based on a randomized, stratified sample of employed U.S. veterinarians (including AVMA members and nonmembers). The response rate of the Surveys is about 25%. If DVMs who are more successful are more likely to respond, the reported rate of earnings may exceed actual averages.

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30 Workforce Needs in Veterinary Medicine Among associates in all areas of private practice, the mean earnings of companion-animal-exclusive associates was the highest in 2007 (AVMA, 2009a; see Figure 2-1). This was also true in 2009 with mean associate incomes reported as follows: companion-animal-exclusive $97,074, companion-animal- predominant $86,982, food-animal-exclusive $87,765, food-animal-predominant $79,790, equine $85,055, and mixed animal $73,000 (AVMA, 2011b). Real income, expressed in 1997 dollars and corrected for retail price inflation for pri- vate practice associates in all sectors, increased from a mean of $64,218 in 2005 to $69,431 in 2007 (an 8% increase over 2 years). The income gap between companion-animal-exclusive associates and asso- ciates for other species also widens with experience. Companion-animal- exclusive associates with 25 years or more experience earn substantially more (median income $115,000) than equally experienced associates in food-animal- predominant (median income $64,000) or equine medicine (median income $91,000) (AVMA, 2009a). Specialization Increases Earnings An increasing number of veterinarians are becoming specialists by pursuing advanced study and board certification in one of 21 areas of expertise. In 1989, 15% of veterinary graduates pursued advanced study in some specialty (not just companion-animal-related). In 2008, the figure increased to 40.0% and jumped to 49.2% in 2010 (AVMA, 2011c). One explanation for this trend is an increase in the demand for specialized services. Pets are living longer and receive more specialized veterinary care, for example, oncology and orthopedic surgery. FIGURE 2-1 1997-2009 Associate mean income by practice sector. SOURCE: AVMA Biennial Compensation Surveys.

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Companion-Animal Medicine 31 Companion-animal practitioners’ earnings are substantially increased with board certification. The mean and median incomes of companion-animal prac- tice owners who were board certified in 2009 were $208,446 and $175,000, re- spectively, versus $168,586 and $139,000 for practice owners who are not board certified (AVMA, 2011a). Another possible reason that a growing number of veterinary graduates who seek the higher incomes that specialists can potentially earn is also related to the need to service their educational debt (Chieffo et al., 2008). Even with taking lost income during specialty training into consideration, the return on investment from specialty board certification, as measured by life- time earnings, compares favorably to that of practice owners and associates (Gordon 2010). Those who pursue advanced study and specialize no doubt do so for professional fulfillment, as well as financial gain. As is discussed in greater detail in the Chapter 10 and elsewhere, graduates from veterinary colleges are facing educational debt burdens due to rising tuition costs that are increasing more rapidly than starting salaries. Women and Companion-Animal Medicine Since the late 1970s, the number of women entering veterinary schools has been growing (while the number of male applicants has been declining). Women now represent about 80% of the students in U.S. veterinary schools (Slater and Slater, 2000). As noted earlier, since 2009, there were more female than male AVMA members, most identifying themselves as companion-animal practitioners; in 2010, women comprised 56% of the companion-animal-exclusive veterinary workforce (AVMA, 2011B). Women in veterinary medicine work fewer hours than men (Brown and Sil- verman, 1999a), but anecdotal evidence suggests that younger veterinarians, men and women, place a higher priority on having time for their personal lives than previous generations (Kennedy, 2004). This plays a significant role in ca- reer decisions, and may continue to do so in the future. However, women are more likely to work part-time, exit the labor market more often, and, although interested in owning their own practices, are less like- ly to pursue that route following graduation (Smith, 2006; Felsted and Volk, 2000). Whether as a practice owner or an associate, women earn less than men (AAHA, 2004). Although the flexibility of a profession in companion-animal veterinary medicine may be considered a worthwhile tradeoff, the earnings dis- crepancy between men and women (discussed in greater detail in Chapter 10) suggests that future earnings increases of companion-animal practitioners may follow a lower pay trajectory as women come to dominate the field. DEMAND FOR COMPANION-ANIMAL VETERINARY SERVICES The primary sources of demand for veterinary services are the growth in the number of pets owned in the United States and the growth in expenditures for

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32 Workforce Needs in Veterinary Medicine veterinary medical services per pet-owning household. While the percentage of American households owning companion animals has stayed relatively constant in recent years (57.9% in 1991 vs. 59.5% in 2006), the growth of the U.S. popu- lation has been paralleled by increases in the pet population, especially dogs and cats, whose numbers have increased sharply since 1996 (Figure 2-2). Average veterinary expenditures per pet-owning household grew even more quickly than the populations of companion animals, particularly those by dog and horse owners, which are nearly twice the average expenditures per cat- owning household (Figure 2-3). Increased expenditures per household, stated in dollars of 2006 purchasing power, reflect in part an increased number of pets per household, some increase in the number of annual visits to veterinarians, and increased expenditures per pet. 90 80 70 60 Cats 50 Millions Dogs 40 30 Birds 20 10 0 1991 1996 2001 2006 Year FIGURE 2-2 Numbers of pets in American households. DATA SOURCE: Calculated from AVMA, 2007a. FIGURE 2-3 Average annual expenditure per pet-owning household. DATA SOURCE: Calculated from AVMA, 2007a.

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Companion-Animal Medicine 33 The economic recession that began in December 2007 (with national unem- ployment at 4.9%) has been long and deep, and unemployment rose to 10.2% in October 2009. It will be some time before surveys of animal owners and veteri- nary practices reveal the effect of the recession on veterinary medicine. Anecdo- tal evidence points to declines in spending by pet owners. The effect may be largest in areas that have the highest unemployment rates, such as California, Nevada, Michigan, Rhode Island, and South Carolina, where unemployment exceeded 12% in October 2009 (BLS, 2009). A recent examination of veterinary practices shows a 3% decrease from 2006 to 2009 in the average amount that clients spend before they stop treatment (Verdon, 2009). There is also a substan- tial decrease in the number of announcements of job openings posted in the AVMA placement service.2 Because a larger share of the veterinary profession focuses on services to companion animals, professional incomes become more sensitive to changes in the aggregate performance of the economy and vulnera- ble to declines during recessions. However, despite the economic downturn that began in 2007, the starting salaries for graduates of the class of 2009 increased by 6.8% and 7.2% in the companion-animal-exclusive and companion-animal-predominant sectors, re- spectively, when compared to the class of 2008 (Shepherd, 2008, 2009). Gradu- ates in 2010 saw a modest increase in starting salaries, with $71,462 (3.3% in- crease) for graduates entering careers in the companion-animal-exclusive sector, and $68,826 (4.0% increase) for the companion-animal-predominant sector (AVMA, 2011c). In 2011, however, starting salaries for students entering the companion-animal-exclusive sector declined to $69,789, while those for the companion-animal-predominant sector edged upwards to $69,654 (Shepherd, 2011). The most compelling evidence of the demand for veterinary manpower is the increase in income. In the long-term, the demand for companion-animal services may be more durable than other veterinary sectors. The extent to which owners of companion animals use pet insurance may influence spending in the future (see Box 2-1). In addition, the largest growth rate in pet ownership is in retired couples, and the aging of the baby boomers will have its effect on the need for companion-animal veterinary services in the coming years (AVMA, 2007a). Predicting Future Needs for Companion-Animal Veterinarians Since the proportion of households in the United States with companion an- imals has been historically constant, then the number of pets (and pet visits to veterinarians) might be reasonably correlated to size of the U.S. population. Thus, it might be possible to calculate the demand for veterinary services in the future using data on the current number of pet visits annually (and an estimate of 2 Count of advertisements of openings for DVMs in the Journal of the American Vet- erinary Medical Association.

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34 Workforce Needs in Veterinary Medicine BOX 2-1 Pet Insurance In Europe, up to 50% of pet owners buy pet health insurance. Pet insur- ance has probably played a central role in supporting the development of specialty practices in the United Kingdom (Petplan, 2008). In the United States, less than 1% of pet owners’ expenditures on pets are for pet insur- ance (Pulliam Weston, 2009). It is uncertain, but expanded sales of pet in- surance might increase total spending for veterinary services for pets. Pet insurance has been available in the United States for several decades, but the market penetration remains slight. Because basic veterinary services are available at modest cost in many cities, sales of veterinary services are sen- sitive to price, particularly for low-income households (Brown and Silverman, 1999a). A 10% increase in price would lead to a 4% decrease in services on the average. Although insurance spreads the price of costlier services among insurance clients through premium payments, the cost of operating an insurance company adds to the total cost. People who want to spend more per pet are more likely to buy insurance than people who intend to spend less, but it is not necessarily the case that a person who is induced to buy insurance would see more dollars flow to veterinarians than they would have spent directly on veterinary service without insurance. the number of veterinarians who cared for those animals during the visits) and information on the current size and projected growth of the U.S. population. In the following section of the report, the committee used information from various sources to develop predictions about future needs for companion-animal veteri- narians. Given the uncertainty at various points in the analysis, including the influence of the economic downturn on demand, the predictions should only be considered as broad estimates. Indeed, the committee would like to see better and more continuous data collection on companion-animal practices and the demand for services. Current Pet Visits and Veterinarians In 2006 there were 188.7 million pet visits (dogs, cats, birds, and exotic pets) to veterinarians who either spent full time treating companion animals (companion-animal-exclusive) or some lower fraction of time (companion- animal-predominant, mixed animal, and food-animal-predominant). Using AVMA membership information on the numbers of veterinarians in each cate- gory and the percentage of time spent treating companion animals, the commit- tee calculated that services for the 188.7 million pet visits were met by the full time equivalent (FTE) of 48,158 veterinarians. Box 2-2 describes the assump- tions the committee made in calculating its estimate of total companion-animal FTEs working in 2006. Table 2-1 illustrates the results of the committee’s calcu- lations.

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Companion-Animal Medicine 35 BOX 2-2 Calculation of Companion-Animal, Full Time Equivalent Veterinarians Veterinarians who work with pets devote 100% (companion-animal- exclusive), 90% (companion-animal-predominant), 49% (mixed animal), and 6% (food-animal-predominant) of their time to companion animals (AVMA, 2009a). The majority of companion-animal specialists in private practice list themselves as companion-animal-exclusive. The percentage of veterinarians working part-time is 6.7% for food- animal-predominant, 7.4% for mixed ani- mal, 14.5% for companion-animal-predominant, and 19.4% for companion- animal-exclusive. Those working part-time work an average of 21-23 hours per week (AVMA, 2009a). Part-time veterinarians were counted as 0.5 full- time equivalent (FTE) for the purposes of this analysis. It was presumed that the 13,083 veterinarians whose employment was listed in the AVMA mem- bership database as unknown would be similar to the 68,385 veterinarians whose career choices are listed, and that the number working part-time also would be similar (AVMA, 2006). The FTE devoted to companion-animal pri- vate practice in 2006 is outlined in Table 2-1. TABLE 2-1 Companion-Animal Full-Time Equivalents in 2006 Number Half-time Total CA Total Veterinarians of DVM FTE FTE FTE FTEs Food-animal-predominant 4,924 165 4,594 4,759 286 Mixed animal 5,192 192 4,808 5,000 2,450 Companion-animal-predominant 6,745 489 5,767 6,256 5,630 Companion-animal-exclusive 44,065 4,274 35,516 39,790 39,790 Total 48,158 NOTE: CA=Companion-animal, DVM=Doctor of Veterinary Medicine, FTE=Full-time equivalent The estimate that 188.7 million pet visits in 2006 were accommodated by 48,158 DVM FTEs can be equivalently stated as 3,918 visits per DVM FTE per year. In the context of a typical work year, 3,918 visits per DVM FTE equates to approximately 83-87 visits per DVM FTE per week (assuming the work year includes 2-3 weeks of vacation, 6-9 holidays, 4-5 days of continuing education, and 5-6 sick days). To investigate if the relationship between the number of veterinarians and the number of pet visits might be confirmed by other data, the committee sought input from current companion-animal practice owners listed in the AVMA

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36 Workforce Needs in Veterinary Medicine membership database.3 Companion-animal practices in rural, urban, and subur- ban communities were included in an exploratory survey that asked practice owners, among other things, to provide the average number of office calls per week for the practice, along with the number of veterinarian FTEs employed. That information was used to calculate the average number of office calls per veterinarian (DVM) per week. Based on the responses of practice owners, the committee found that the av- erage number of office calls per DVM per week was 70. For those practices in which the gross revenue per DVM was above the mean ($462,782) the average number of visits per week per DVM was 87, while those practices with gross revenue per DVM below the mean saw an average of 56 visits per DVM per week. For another point of reference and to determine the expectation of visits per week in a corporate veterinary practice, the committee obtained data from Ban- field. Each DVM FTE at Banfield is expected to service 110 visits per week (J. Payne, Banfield, the Pet Hospital, personal communication, June, 2008). The Banfield practice is comprised primarily of wellness visits, with a lower number of time-consuming procedures (such as surgery) being performed than in non- corporate veterinary practices, so higher numbers of visits per week could be expected. Notwithstanding the limitations of the AVMA membership data and the survey limitations, the committee’s calculation of between 83 and 87 visits per DVM FTE per week falls in the middle of the range of reported figures from the surveyed practice owners and Banfield. Estimating Future Visits and Veterinarians Assuming that pet ownership per household remains relatively constant, as it has in recent years, and the frequency of veterinary visits per pet is consistent, the number of pet visits in 2016 can be projected from growth in the U.S. popu- lation. In 2006, there were 188.7 million pet visits and the U.S. population was 298,362,000, making the number of pet visits per person 0.632. Multiplying that factor by the projected U.S. population in 2016, (328,678,000 people; [U.S. Census Bureau, 2010]), the predicted number of pet visits in 2016 will be 207,742,496. 3 The committee’s Survey of Companion Animal Practice Owners included a sample of 596 owners drawn from the total number of 17, 886 such owners in the AVMA mem- bership database. The survey responses should be treated as suggestive only, as they may be biased in unknown ways because the sampling frame is incomplete—it does not in- clude owners who do not belong to the AVMA or AVMA members who do not indicate their employment category (15%). Moreover, the response rate of 48.2% (287 responses) provides the potential for non-response bias. See Appendix B for details.

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Companion-Animal Medicine 37 The number of veterinarians needed to attend to the approximately 207.7 million pet visits in 2016 will depend on the number of pet visits handled per DVM FTE per week and the number of weeks each DVM FTE works per year. The committee calculated a range of estimates, using a low end figure of 70 pet visits handled per DVM FTE per week (the average of survey responses) and a high of 87 (the average of responses from practices with gross revenue per DVM FTE above the mean). The total number of pets treated will vary depend- ing on the number of weeks worked per year, which the committee estimated would vary from 45 to 47 per FTE. Table 2-2 shows that the predicted range of DVM FTEs needed in 2016 is between 50,805 and 65,950, based on the varia- bles described above. Recent data suggests that the demand for pet services has weakened due to the economy but it is too early to tell if this trend will reverse itself. In the absence of better data on both the demand for pet services and the number of pets attended to by veterinarians in a given year, the predictions in Table 2-2 should only be considered as broad estimates. The weak economy notwithstanding, responses to the committee’s survey of current veterinary practice owners lend support to the committee’s predictions of increased future demand for more veterinarians in the companion-animal sec- tor. When asked how many DVM FTEs they would like to add in 2008, 2010, 2012, 2014, and 2016, the survey response was an average of 1.42, 1.24, 1.14, 1.14, and 1.17 respectively. Banfield, which employed 1,533 DVM FTEs in 730 hospitals in 2008, described plans to expand in 2012 to a total of 3,479 DVM FTEs in 1,100 hospitals, and by 2016, to 5,516 DVM FTEs in 1,450 hospitals. The additional Banfield hospitals will be new hospitals, not purchased from ex- isting practices. FUTURE SUPPLY OF COMPANION ANIMAL VETERINARIANS A key question is whether the estimated number of FTE companion-animal veterinarians needed in 2016—a figure somewhere between 50,805 and 65,950 (based on predicted numbers of pets and pet visits)—will be available. To an- swer that question, it is necessary to estimate 1) how many currently working companion-animal veterinarians will still be working in 2016 and 2) the project- ed number of graduates from U.S. veterinary colleges who will join the compan- ion-animal sector between now and 2016. Using data from a number of sources about retirements, graduation rates, and trends in career preferences, the com- mittee predicts that under projected circumstances, the number of companion- animal veterinarians available will be approximately 51,445, exceeding the low- er demand estimate and falling short of the higher demand estimate. As predict- ing the future is inherently difficult, the committee acknowledges the uncertain- ty of presenting a single estimated figure. The assumptions and calculations that went into developing this estimate are described in the following section.

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38 Workforce Needs in Veterinary Medicine TABLE 2-2 Predicted DVM Full-Time Equivalents Needed in 2016 Based on Committee Estimates Visits per DVM 2016 CA Visits per Week Work Weeks per Year FTE per Year DVM FTE 70 45 3,150 65,950 70 46 3,220 64,516 70 47 3,290 63,144 87 45 3,915 53,063 87 46 4,002 51,910 87 47 4,089 50,805 NOTE: CA=companion-animal, DVM=Doctor of Veterinary Medicine, FTE=full-time equivalent. Estimating the Number of Companion-Animal Veterinarians Working in 2016 To calculate how many veterinarians currently working in companion- animal medicine would still be working in 2016, the committee used 2007 de- mographic and membership information from AVMA, and assumed that the percentage of time spent on companion animals among companion-animal- exclusive, companion-animal-predominant, mixed animal, and food- animal- predominant practitioners to be consistent with current reports, as described ear- lier in this chapter. The committee assumed an average career span of 35 years and also assumed that veterinarians who will be less than 65 years of age in 2016 would be working full-time and part-time in 2016 in the same proportions as reported currently. The committee counted veterinarians who will be 65-70 years of age in 2016 as 0.25 FTE each (under the general assumption that much less of their time, collectively, would be spent in the clinic). Based on these as- sumptions, the total FTE of veterinarians employed currently who will contrib- ute to companion-animal veterinary services in 2016 is 38,329. The results of the committee’s calculations are displayed in Table 2-3. Estimating the Number of New Companion-Animal Veterinarians Predicting the number of veterinary school graduates who will join the companion-animal private practice workforce by 2016 is a little less straightfor- ward. To develop its projection, the committee used various estimates of the total numbers of new DVMs graduating during the years leading up to 2016, and made assumptions about the percentage of those who would choose to enter companion-animal practice, including the proportion of those who would seek advanced degrees in an area of specialization related to companion-animal med- icine. The committee’s analysis focused on information about AAVMC- accredited veterinary schools in the United States, Canada, and outside of North America.

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Companion-Animal Medicine 39 TABLE 2-3 An Estimate of Veterinarians Employed in 2008 Expected to be Working in 2016 Age and Work Category <65 <65 full <65 part <65 total 65-70 65-70 Total CA Veterinarians DVM time time FTE FTE DVM FTE FTE Total FTE FA-predominant 2,819 2,630 94 2,724 717 179 2,903 174 Mixed 3,628 3,360 134 3,494 566 142 3,636 1,782 CA-predominant 4,608 3,940 334 4,274 929 232 4,506 4,055 CA-exclusive 34,448 27,765 3,342 31,107 4,842 1,211 32,318 32,318 Total 38,329 NOTE: CA=companion-animal, DVM=Doctor of Veterinary Medicine, FA=food-animal, FTE=full-time equivalent. The committee used information from AVMA and AAVMC on the num- bers of graduates in recent years and on current and projected enrollments to estimate the overall number of DVMs graduating between the years of 2008- 2013 (AAVMC, 2009, 2010; Shepherd, 2009). The committee assumed increas- es of 3.5% per year for the classes of 2014-2016, based on increases from previ- ous years, and assumed that enrollment of Americans in accredited Canadian schools would remain constant throughout the 2008-2016 period. For accredited veterinary colleges outside of North America, the committee predicted annual increases of 10% in the classes of 2013-2016. Table 2-4 summarizes the committee’s projections for new DVM graduates between 2008-2016. In this time period, a total of 25,566 new graduates are ex- pected: 24,283 from U.S. veterinary colleges, 217 from Canadian veterinary colleges, and 1066 from non-North American veterinary colleges. Proportion of New Graduates Pursuing Companion-Animal Medicine The committee assumed that the percentage of future graduates of U.S. vet- erinary colleges who choose to pursue companion-animal medicine would mir- ror that of the class of 2008, but it made slightly different assumptions about Canadian and non-North American accredited schools. Because of the cost of education incurred by students attending those schools is much greater than for those attending U.S. schools, the committee predicted graduates would choose to enter careers that would generate sufficient income to serve that debt. The proportion of students entering different careers was assumed to be as follows: companion-animal-exclusive (40%), companion-animal-predominant (10%), advanced study of all fields (40%), and other non-companion-animal fields (10%). Table 2-5 presents the committee’s assumptions about the distribution of new DVMs among career paths from the different colleges.

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40 Workforce Needs in Veterinary Medicine TABLE 2-4 Projected Number of Graduates of Accredited Colleges of Veterinary Medicine 2008-2016 Americans in accredited Americans in accredited Class United States CVMs Canadian CVMs non-North American CVMs 2008 2,477 24 45 2009 2,514 24 56 2010 2,583 24 69 2011 2,672 24 89 2012 2,765 25 132 2013 2,674 24 145 2014 2,768 24 160 2015 2,865 24 176 2016 2,965 24 194 Total 24,283 217 1,066 NOTE: CVM=College of Veterinary Medicine. TABLE 2-5 Projected Career Paths for Graduates 2008-2016 Americans in Americans in United States accredited accredited non-North Career Path CVM Canadian CVMs American CVMs Total CA-exclusive 7,649 87 426 8,162 CA-predominant 1,846 22 107 1,974 Mixed-animal 2,258 0 0 2,258 FA-predominant 656 0 0 656 Advanced Training 9,689 87 426 10,202 NOTE: CA=companion-animal, CVM=College of Veterinary Medicine, FA=food-animal. Three additional calculations are needed to estimate the number of new DVMs joining the companion-animal private practice workforce. One involves approximating the percentage graduates seeking advanced training who pursue specialties related to companion-animal medicine. For this, the committee relied on AVMA market research statistics and data made available from the American Colleges of Veterinary Surgeons and Veterinary Internal Medicine on residency- or graduate-study trained board certified specialists in 2007. That information indicated that 36% of board certified specialists in all fields were employed in companion-animal private practice specialties (AVMA, 2007b; ACVS, 2008; T. Anglim, American College of Veterinary Internal Medicine, personal communi- cation, October 9, 2008). If a similar proportion for the projected 10,202 stu- dents seeking advanced training can be assumed, there will be 3,714 more com- panion-animal veterinarians who have pursued advanced training in 2016. It was projected that 400 of those companion-animal veterinarians would enter careers other than private practice (such as academe) based on the demographics of vet-

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Companion-Animal Medicine 41 erinarians currently employed in these sectors. As a result, 3,314 of new gradu- ates who pursued advanced training should be employed in companion-animal private practice in 2016. The second calculation involves applying the rates at which companion- animal practitioners in different types of practice (companion-animal-exclusive, mixed, etc.) work full- and half-time, which is assumed to follow the current trends discussed earlier. Companion-animal specialists in private practice were presumed to follow the same percentage of full-time vs. part-time as companion- animal-exclusive veterinarians; that is, 19.4% working half-time. Finally, the computation of FTE must consider the percentage of time spent on companion animals by graduates in each practice type, which was applied according to current trends. Companion-animal specialists are assumed to de- vote 100% of their efforts towards companion animals. The total additional companion-animal DVM FTEs resulting from new graduates in the classes of 2008-2016, as estimated by the committee, is outlined in Table 2-6. The committee predicts that 13,116 new DVM FTEs will be added to companion-animal workforce by 2016. Estimated Total 2016 Supply versus Demand Based on the committee’s calculations, the projected total supply of com- panion-animal DVM FTEs in 2016 is 51,445, comprised of 38,329 currently working veterinarian FTEs, and 13,116 FTE graduates of accredited schools between 2008 and 2016. As noted earlier, based on differing levels of efficiency of private practices (see Table 2-2), the committee predicted that the number of veterinarians needed to service an estimated 207.8 million pet visits in 2016 might range between 50,805 and 65, 950 DVM FTEs. Comparing the commit- tee’s estimates of supply versus need, it appears that the expected outcome would be either a surplus of 640 or a shortage of 14,505 FTEs. If one assumes that practices will become more efficient in seeing pets (using an average effi- ciency of approximately 80 visits per companion-animal DVM FTE per week with a 46 week work-year), the result is a need for fewer (56,452 FTEs) veteri- narians, but still a shortage of 5,007 FTEs. If the percentage of veterinarians providing companion-animal services working part-time continues at current levels, for all the companion-animal FTEs needed in 2016, approximately 10% more veterinarians will be needed in the workforce, or 5,508 more veterinarians than the anticipated supply. MEETING FUTURE WORKFORCE DEMANDS If the demand for companion-animal veterinary services follows the trajec- tory observed in the past, the committee predicts that the number of veterinari- ans available in 2016 will be insufficient to provide those services, at least

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42 Workforce Needs in Veterinary Medicine TABLE 2-6 Estimated Number of 2016 Companion-Animal Full-Time Equivalents from New Graduates Total new Full time Half time Total CA FTEs Career Path graduates FTEs FTEs FTEs Private Practice CA-exclusive 8,162 6,579 792 7,371 7,371 CA-predominant 1,974 1,688 143 1,831 1,648 Mixed-animal 2,258 2,091 84 2,175 1,066 FA-predominant 656 612 22 634 38 Advanced 3,314 2,671 321 2,993 2,993 Training CA Total 16,364 13,641 1,362 15,004 13,116 NOTE: CA=companion-animal, FA=food-animal, FTE= full-time equivalent. at current levels of efficiency (the number of pet visits per veterinarian). To avoid such a mismatch, the demand for services could be met by 1) more effi- cient use of paraprofessional staff, such as veterinary technicians, so that client needs can be met with fewer DVM FTEs; 2) additional graduates of currently non-accredited schools entering the companion-animal workforce, and 3) more DVMs switching from other veterinary sectors to companion-animal medicine. A fourth way to fill the gap would be for companion-animal veterinarians to work more hours per week; however, current workplace trends do not support that likelihood. Companion-animal practices are striving to become more efficient; that is, to see more patients in the same amount of time, with more responsibility for patient care and client communication being delegated to veterinary paraprofes- sionals. The private practices that responded to the committee’s inquiry con- firmed this. Practices in which the gross revenue generated per DVM was above the mean saw more patients per week per DVM than those below (87 vs. 56). The time for each office visit was 21 minutes for the practices that reported gross revenue per DVM above the mean, versus 26 minutes for those grossing below the mean. Practices with gross revenue per DVM above the mean em- ployed an average of 3.06 veterinary technicians and assistants per DVM versus 1.94 for lower grossing practices. Several studies have demonstrated the rela- tionship between paraprofessionals and the revenue level of private practices: when the number of veterinary technicians and assistants approaches 3 per DVM, gross and net revenue per DVM rise and more veterinary service can be provided (Brown and Silverman, 1999b; J. Payne, Banfield, the Pet Hospital, personal communication, June 2008; Stanley Creighton, National Veterinary Association, personal communication, June, 2008). The committee’s analysis of private practice responses shows that there is a point of diminishing returns. Once the number of veterinary technicians and assistants per DVM exceeds 3, there is little additional gain in gross revenue per DVM (Figure 2-4).

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Companion-Animal Medicine 43 FIGURE 2-4 Impact of veterinary technicians and assistants on DVM practice revenue. The effective and efficient use of veterinary technicians is of paramount importance if the future needs for companion-animal veterinary medical services are to be met. Ideally, veterinary medical care is a service-oriented business, run by a well-trained health care team that is led by a veterinarian. The veterinarian is trained to diagnose, prescribe treatment, perform surgery, and assign progno- ses for cases presented. Proper and appropriate use of veterinary technicians, which utilize their technical expertise, will allow veterinarians to concentrate on the responsibilities that require their knowledge and skill. An alternative for meeting the demand for companion-animal veterinary services is to increase the number of veterinarians devoted to companion-animal private practice. If there is no substantial increase in the number of graduates from accredited veterinary colleges, the demand could be met by employing veterinarians from colleges not accredited by the Council on Education of the AVMA, or by redirecting existing DVMs from other sectors of the profession. Both are occurring already. The number of graduates from non-accredited veter- inary colleges obtaining licensure is increasing annually. During 2006, 371 cer- tificates from AVMA Educational Commission for Foreign Veterinary Gradu- ates (ECFVG) were awarded, 160 of which were to U.S. citizens. As of March 2007, 1,826 candidates were enrolled in the ECFVG program, 336 of whom were U.S. citizens (AVMA, 2007c). The projections in this analysis suggest that this trend will continue as the need for companion-animal veterinary services continues to grow. The U.S. citizens who enroll in these non-accredited institu- tions will pay the full cost of their education, which is not subsidized by public funds as are most U.S. veterinary schools, and their ability to obtain licensure in the United States is frequently delayed by a year or more while they progress through the ECFVG program. Americans ultimately can obtain licensure and contribute to the veterinary workforce after having attended a non-accredited institution, but the time re- quired can be longer and the cost to the students higher than if they had attended

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44 Workforce Needs in Veterinary Medicine accredited colleges of veterinary medicine in the United States. The high cost of education assumed by U.S. students attending veterinary school outside the United States, whether accredited or not, necessitates that they will enter higher- paying practices such as companion-animal-exclusive so their educational debt can be served more readily. The redirection of veterinary manpower from other sectors of the profession where service is sorely needed to the companion-animal sector is also apparently occurring as large animal practitioners are increasingly becoming mixed animal and companion-animal practitioners. Increases in the salaries of companion- animal practitioners would foster that redirection. However, these conditions may be diverting the veterinary workforce away from underserved, yet im- portant sectors such as public health, food safety, rural practice, and biomedical research, among others. Other Factors Affecting Demand in the Future The assumptions that underlie the committee’s predicted need for a larger companion-animal workforce in the future must be considered in light of recent information showing the impact of the economic recession on companion- animal private practice. According to a recently published survey, the number of pet visits per DVM per week declined from 75 in 1997 to 66 in 2009 (Bayer Health Care, 2011). That information suggests that in spite of an increasing number of companion animals, owners are not seeking services at the same level as in the past. It remains to be seen whether this trend will persist when the economy improves. There also is some indication that companion-animal practices are doing better at leveraging paraprofessional personnel. The number of veterinary tech- nicians and assistants per DVM FTE increased from 1.5 in 2003 to 2.4 in 2009 among the survey participants in this study (Bayer Health Care, 2011). In addition, despite the high educational debt load incurred when attending U.S. veterinary schools, and even higher debt incurred when attending non-U.S. schools,, the demand for enrollment is robust (AVMA, 2007c). While the annual applicant pool through the Veterinary Medical College Application Service re- mains steady, it is estimated that annually, at least 340 U.S. citizens are attend- ing veterinary schools at Ross University, St. George’s University, and St. Mat- thews University alone (AAVMC, 2011). Precise data on the number of American students attending accredited and non-accredited veterinary schools outside the United States are not available; but 500-600 per year is a reasonable, yet conservative estimate. The number of Americans leaving the United States to obtain a veterinary education must be considered when analyzing enrollment demand and future workforce supply. While some U.S. colleges of veterinary medicine have increased their ca- pacity in recent years, they are still not meeting the demand. If capacity in U.S. veterinary colleges does not increase substantially, more and more of the com-

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Companion-Animal Medicine 45 panion-animal veterinary workforce will be comprised of veterinarians who graduated from colleges outside the United States, and those redirected from other sectors of the profession. To maintain the quality of and the access to vet- erinary education at a reasonable cost to the student, and to meet the need for veterinary services in all sectors of the profession, the veterinary profession and the U.S. higher education system must consider this reality carefully. The trends discussed in this chapter are further explored in Chapter 10, which examine the dilemma of the companion-animal sector relative to the cost of education. Chapter 11 provides an analysis of these issues in the overall con- text of veterinary profession and offers recommendations for addressing them.