We’re in the process now of the second “refresh” of our Nationwide® | Purdue Veterinary Price Index, which we debuted at the NAVC Conference last year and will again present at this event in January. Our mid-year refresh was presented at the AVMA convention, and both the first presentation and our first refresh drew a great deal of interest and discussion.
Dr. Kevin Mumford, an economist at Purdue’s Krannert School of Management, is analyzing the raw claims data now, and then our in-house team will prepare a report reflecting his findings. Intriguingly, Dr. Mumford has told me he is re-running his analysis because what we thought would show in the newest refresh did not turn up when he crunched the data. Stay tuned!
In the meantime, I thought I’d offer a quick recap of the two previous versions of our Nationwide | Purdue Veterinary Price Index, 5 fast takeaways to bring you up to date before our next release:
The Nationwide | Purdue study draws from actual claims data: We approached the Krannert School of Management with the goal of bringing independent academic rigor to our report. Once they were on board and all the confidentiality agreements were in place, we handed them our raw data, representing more than 5 million actual claims. We knew the information from which the U.S. Consumer Price Index’s veterinary segment is derived comes from a few hundred phone calls to veterinary practices. As I’ve said in presentations, what our claims represent is the “out the door price” vs. “the sticker price” of cost data, and coupled with the size of the data set, I think we’ve succeeded in our goal of presenting a price index that more accurately reflects what’s actually happening in veterinary practices. (If you’re interested in a detailed look at the methodology, click to download the PDF.)
Veterinary pricing shows a steady downward trend: Perhaps because we’ve been used to seeing and counting on the CPI to track veterinary costs, our initial Veterinary Price Index drew gasps of disbelief when we first presented it at the NAVC conference, and it has raised a few eyebrows at every presentation since. Some have pointed out that our claims database reflects only insured pets (true), and only a tiny percentage of all pets are insured (also true). But our own, our competitors’ and independent studies all suggest that people who insure their pets are more engaged users of veterinary services. Wouldn’t that suggest their claims invoices as a group would be higher than those received by people whose pets are not insured? It’s an interesting subject for speculation and debate, but we still have those 5 million invoices, and those claims show pricing for medical treatments going in the opposite direction of consumer prices overall, and well-care treatments roughly tracking just below, with well-care pricing including flea/tick and heartworm medications tracking much closer than pricing without. Give how we weighted the claims data (more medical treatment than preventive care), the overall pricing trends for medical treatments and well-pet care was down 2.1 percent over the study period.
Regional differences are noteworthy: It may not come as a surprise that veterinary prices are higher in the West and in the Northeast. That remained the case even in the West, which logged the largest decline in overall (medical treatments combined with well-pet care) pricing over the study period.
Where you practice impacts prices: Again, probably not a shock to many that overall pricing is higher in urban areas than it is in rural ones. But this time it wasn’t the highest-priced neighborhoods that took the biggest drop — it was the suburban ones.
Cats are not getting much care: Even though we’re very much aware that we don’t see cats in our practices the way we should based on their numbers, the gap between overall pricing for dogs vs. cats is just … I don’t know how to put it except to say that it’s sad. Clearly the many ways we’ve been trying to get people to see the need for and value of veterinary care for cats will continue to be desperately needed for the sake of these pets. I wonder if we’ll see this gap close as these programs become widespread and — I hope — more successful.
Now you’re up to date, and ready for the next release of the Nationwide | Purdue Veterinary Price Index. As soon as we release the data at the NAVC Conference, I’ll post it to the “Studies” section of this website and write a blog post hitting the highlights. In the meantime, you can download the complete reports here.