After my last post, I had a lot people ask me “so, how long is this going to last?” It’s a great question and I know a lot of people look at economists for forecasting advice. But my response has consistently been: my crystal ball is broken. The fact is that this situation we find ourselves in is rather extreme. I just cannot seem to fathom what the end impacts of COVID-19 will be on our economy, much less how long it will last. If I were to give everyone an answer, it would simply be “it depends,” which is the traditional economist answer. But fear not, I have some data that may help us somewhat answer this question.
About a month or so into the pandemic, the U.S. Census Bureau began doing a weekly survey of small businesses to gauge their opinions about various aspects of the economy and how their particular business is handling the changes (if any). The survey was aptly named the Small Business Pulse Survey. One of the questions they ask is as follows: “In your opinion, how much time do you think will pass before this business returns to its normal level of operations relative to one year ago?” This data has been my gauge on answering the question “how long is this going to last?” At the end of April, the national average answer was the 4-6 months range with slightly more people (31.4%) suggesting that it would be more than 6 months. If we look at the industry classification code that veterinary services fall under (54: Professional, Scientific, and Technical Services), those answers in April were about the same as the national average. However, over time more businesses foresee that this will last longer than 6 months from now (end of August). From the most recent data, those that perceive it will be more than 6 months until business operations return to normal is about 45%. This number has steadily been rising over time.
In Phase 2 of the survey, which just started, they have another option: “This business has returned to its normal level of operations.” While we only have two weeks of data on this option, there is a slight increase and is around 8% of businesses. Perhaps the more important option choice is the one asking if the business has permanently closed. This is about 1% in Phase 2 of the survey. Those that believe their business will never return to normal is about 6.5%. All of this information tells me that the effects of the pandemic are going to last awhile for the veterinary industry. Most businesses (about 50%) in Industry 54 code say that COVID-19 has had a moderate negative effect on business, but this number is dropping over time. In response, there has been an increase in businesses that say that say COVID-19 has had little to no effect. This is a sign that business may be getting back to normal.
Going back to the data VetSuccess provides to the public, I mentioned last week that the number of invoices is down slightly for the year. When I dug into this a little more, this decrease stems mostly from the large decrease in late March through April – when most of the country was under stay-at-home orders. Though, in the last month, invoices are up almost 5% which is a good sign of recovery for the veterinary industry. However, digging into the data even more reveals that this increase in recent weeks is driven by small clinics (those with less than $1.5 million in revenue). Revenue for small clinics is up almost 16% in the last month, with an increase in invoices around 6.3%. For large clinics, revenue is still up about 9.3%, but the number of invoices is about the same as last year. Of course, there is a lot of variation by state. I highly encourage you to check out their interactive tool to see how your state is doing compared to others.
Unfortunately, I cannot get any more specific to veterinarians with the Census Small Business Pulse Survey data. This leads me to be a bit skeptical to speak much on the other questions the ask in the survey. Most people in the survey for this industry code have not seen increases in total number of hours worked by paid employees. From almost every single veterinarian I have talked to, there are a lot more hours being put in by all employees of the clinic. While that is still a bit biased on my personal interactions, I do think that is still an accurate assessment.
What Does all this Mean?
Think about this as a marathon and not a sprint. Are clinics taking care of their employees from a physical, mental, and psychological perspective? I still have large concerns about what this all means for burnout. Finding strategies to help all veterinarians cope with increased workloads is paramount. This must come from management for clinics.
Veterinary business looks to be leveling out and catching up from the big decreases in late March and April. Though it does seem like the increase in revenue is still from more expensive procedures. Also, are the increased invoices for small clinics from the “increased danger” from spending 100% of our time with our pets? Not sure I can decode that conundrum with the data I currently has access to, but something to think about for the future.
Large clinics are taking longer to recover from the initial dip in revenue and invoices. If you are a large clinic, it would be imperative to look at why this is. Wellness visits are way up in the last month for large clinics, but non-wellness visits are down. For small clinics, all types of business are up.
No matter how long this Pandemic will affect veterinary businesses, it is important to learn from this momentous event. What went wrong? Right? What can you do to make your business more resilient in the face of future hardships? These are the questions we should be asking ourselves. I encourage all the inward reflection you can afford (time wise that is!). This Pandemic has undoubtedly changed how the veterinary industry operates and times will continue to be challenging until this all finally comes to an end. But I have no doubt that the passion we all have for the industry will see us with a bright future post-COVID.
As always, thank you to all the new people who have connected with me and chatted with me about future collaborations and topics. This blog is all about communicating science based work that can impact people, businesses, and policy makers. Let’s make the world more informed with good science. Also, a special thank you to VetSuccess for their efforts to keep us all informed with their COVID-19 resources.