Tuesday, February 19, 2019

You're Just In It For the Money: Costs of Care

     If you work in the veterinary industry, you've undoubtedly heard it. If you don't, you may have even thought it: "With prices this high, you clearly just care about money, not my pet!"
     The truth is, the profit margins in veterinary medicine are surprisingly low. The average veterinarian makes around $90,000 annually (compare this to a physician, $190,000 annually), despite that both leave school hauling an average of $140-$160K in debt. For nurses, medium annual income falls around $30,000 in veterinary medicine and $70,000 in human. These people aren't in it for the money-or they're in the wrong medical field. By and large, the professionals who enter veterinary medicine are highly empathetic, compassionate people wishing to devote their work to the well-being of our animal companions.
     That doesn't change that when you walk out of your vet clinic you've likely dropped a pretty penny for services, so why is that? Most of the money goes towards overhead costs- rent for the building, utility bills for electricity and water, internet and phone services, payments towards expensive medical equipment (surgical tools, an x-ray machine, in-house blood work machines, microscopy tools), property and injury insurances, etc. The amount remaining is the profit that pays the doctor or practice owner- after all other employees receive their paycheck, of course.

     Understanding where the money goes is only one part of the battle. To help put things in perspective, we can compare the respective prices of services offered for animals and humans.

     These price estimates are on the lower range of what is offered, since it depends on region and the individual practice. As should be immediately apparent, its actually significantly more expensive to have the same services provided to your dog performed on yourself. The primary difference? You likely have insurance. This is where the disconnect truly arises. 
     In the world of human healthcare (at least in the USA), the insurance process often goes along these lines: 
                         1) You visit your doctor, pay the co-pay required by your insurance company, and
                         carry on. 
                         2) Your provider sends a claim to your insurance company to evaluate. 
                         3) Your insurance company pays their share to the provider. 
                         4) Your provider bills you the remaining amount owed. 
     In many cases, people simply pay the remaining amount and never inquire to the total price they were charged (not including what insurance picked up) for the visit. If they do, it doesn't necessarily stick so well in the mind- after all, it isn't leaving the pocket. This makes it much easier to forget how expensive healthcare is, until you visit the vet and are faced with all the charges up front. 
     Most services at privately owned veterinary clinics are marked up 1.5-4X their actual cost to the clinic. This varies by area and by service, with some actually being provided at or below cost to encourage owners to be proactive with their care (things like fecal cytology, vaccination, and toe nail trims, to name a few). To contrast, some hospitals in the US have been found to mark up prices 10X the actual cost. The lack of transparency, aided by the insurance proxy, leaves many people ignorant to that reality. Going back to animals, many veterinary hospitals will provide you with a complete estimate up front, detailing exactly what they'd like to do for your pet and how much each individual service will cost you. 
     While all of this may help to show veterinary professionals really aren't out to greedily snatch your money, it doesn't change the fact that $500 for your canine companion's annual visit (or $1,500 for your furry feline's linear foreign body removal) takes a nasty chunk out of your finances. Look out for a future post on the pros and cons of available veterinary insurance plans.

Thank you for reading! 

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