Animal Dynamics

The January 2009 cover story in Veterinary Economics explored the issue of rising debt of graduating veterinarians. The story highlights Dr Wendy Labrouse who quickly realized after graduating from veterinary school that a new baby and a husband still finishing college left them living paycheck to paycheck without any retirement or savings plan, despite working 60 hour weeks. Her college loan payment was more than her monthly rent. She says, “I didn’t realize the implications of my debt until I was living with it.”

The statistics are staggering! Financial planners recommend not borrowing more for college than your anticipated first year salary. In 2008, the average starting salary for a veterinarian was $61,518. That same year, the average debt of a US veterinary college graduate was $120,000. Ninety percent of veterinary college graduates leave school with debt from their education.

This is not really news, and it’s not confined to the veterinary industry. Veterinary student debt increased 70% from 2000 to 2007, while dental student debt increased 79% in the same period. The US education secretary noted that the increased cost of going to college has outpaced inflation for over two decades.  The bigger challenge for veterinary students, however is the comparatively lower earning potential. (See table)

Improve revenue, increase salaries

The solution that Veterinary Economics proposes, is that practice owners must improve the profitability of their practices in order to pay new graduates a higher salary. This is based on the fact that most small animal practices are still privately owned, and therefore practice owners as a collective group could wield a lot of power in making changes in veterinary business. This route requires the notoriously independent veterinary owner to implement efficiencies in practice. This also ignores the statistical fact that the average small animal practice has 2 doctors. Many are single doctor practices, sometimes with a part-timer to help fill in the hours.

See more patients, work more hours.

This requires more training for staff (professional and lay) and more delegation. Veterinary schools have been called to improve the “business IQ” of the students they graduate, so they are ready to be productive members of a practice from the start. Students also need to face the reality that the more hours they work, the more production they generate; the higher the salary they can command. While many new graduates work 60 hours a week, the average non-owner veterinarian works 45 hours per week. This compares to dentists who average 40 hours per week in one 2002 study. According to the US Bureau of Labor Statistics, more than 1/3 of MD’s work more than 60 hours per week. http://www.bls.gov/oco/ocos074.htm

One solution would be to charge appropriate (higher) fees to cover the true cost of providing veterinary care to the public. However, this route is only a piece of the puzzle. Some segment of the pet-owning population will not happily pay higher fees. Many practitioners are regularly challenged with the “but don’t you love animals?” plea for free or low cost care. Do pediatricians hear this same rhetoric? “If you loved kids, you’d provide free services?”

More veterinarians, decreased salaries

The Veterinary Workforce Expansion Act which passed the US Senate in 2007 seeks to provide funding to increase the number of veterinarians graduating from veterinary college. In April 2010, Purdue University announced the plan to increase veterinary student enrollment by 20% over the next two years. The purpose of the act is to provide more veterinarians to work in the Public Health.  To be clear, there would be NO shortage of veterinarians working in public health if the salaries were sufficient to draw doctors into that field. For example, an emergency veterinary medical officer, when activated for an emergency post would make $25 / hour (equivalent annual salary: $52,000).  A Public Health Veterinarian makes $57,000 to $88,000 per year. Even the upper end of that pay range is barely in the average range for a private practice veterinarian.

In the distant past, many veterinary colleges were created to address the shortage of veterinarians working in the food animal industry. That industry has all but gone away (from the practicing veterinarian standpoint) and the majority of veterinarians today enter small animal practice upon graduation because the financial opportunities and quality of life are better. Three out of 4 veterinarians work in private practice. Of those in private practice, 70% work in predominately or exclusively small animal practice. However, the immediate impact of the Act, if implemented will be simply to increase the number of veterinarians graduating from veterinary college. There can be no mandate for what those students do with their degree once they graduate. This will only drive veterinary salaries down.

Realism, Expectations.

In 2008 almost 40% of veterinary graduates pursued a practice internship (up from 15% twenty years ago). Twenty years ago, the internship was a pre-requisite for advanced training leading to a residency and specialty certification. Today many new graduates simply feel unprepared for the reality of private practice right out of school. This additional year of salary at 50% of the national average also contributes to the student’s total debt load.

What many prospective veterinarians need to do is plan for their careers with a longer outlook. Secondary education costs will continue to rise. Cost of living will continue to rise. Does it really make sense to incur an education debt that you might never be able to pay off? Does it make sense to expect to live a glamorous, professional lifestyle until your debts are paid off? Does it make sense to get married and have kids if you are the primary wage earner, with a mountain of debt?

There are no easy answers, but we need to stop avoiding the questions! Dr Labrouse faced her reality, and drastically changed her lifestyle and made a game plan. Today she is a practice owner and does feel financially secure.