When we first saw the most recent data analysis of veterinary pricing by the economists at the Krannert School of Management at Purdue University, our eyes opened wide. It’s quite possible that yours will, too. Because for the first time since 2009, veterinary prices are finally showing some signs of recovering from the long downward trend documented by the first two releases of our Nationwide | Purdue Veterinary Price Index.
Tonight was the introduction of the third version of the Nationwide | Purdue Veterinary Price index, unveiled by Dean Logan Jordan of the Krannert School to a room full of key players in the veterinary community and veterinary trade media at the North American Veterinary Community conference.
As has become the norm, the numbers caused a stir and discussion.
How much was the increase? Overall, our data shows that in first six months of 2015, pricing for common canine treatments was up 5.1 percent (annualized) over the previous study period of 2009-2014. In the same comparison, medical pricing was up 5.6 percent (vs. -5.2 percent 2009-2014) and well-care was up 3.8 percent (vs. 9.3 percent 2009-2014). These numbers represent the first chan ge in direction for veterinary pricing since we launched the study in 2014, looking at data from 2009 on.
It’s likely true that almost everyone in the veterinary community will be happy to see these signs of recovery. After all, the recession slammed veterinary practices, and recovery has been slow in coming. But looking at the entire scope of the study from 2009 through midyear 2015, it’s important to note that even with pricing increases in 2015, the overall picture for 2009-2015 was flat in terms of pricing. In other words, we’re pretty much back where we started.
Will the trend continue?
Where will prices go next? All eyes should be on the lookout for the next refresh of the Nationwide | Purdue Veterinary Price Index, when we should have an indication of where the prices are trending over the long term. Is this the short-term price correction so many have anticipated? Or it is the first sign of a longer trend in pricing increases?
Because we’re always cognizant of the impact our reports may have on veterinary practices and their dealings with clients, we want to point out also that even with the uptick, our study (based on millions of actually claims) shows pricing trends far below the federal government’s report (based on hundred of phone calls). Over 2009-2015, the U.S. Commerce Dept. releases show veterinary pricing increased at a staggering 24 percent, well above their figure for inflation across all consumer goods and services. As with previous reports, we show well-care roughly tracking the inflationary trends for all consumer goods and services, and medical care trendlines considerably below both.
Download the Executive Summary by clicking on the cover image above, or by going to the Studies and Research Section. And we’ll have more when I’m back from NAVC.