Thank you

Reading Carl’s comments was akin to discovering that another person has seen my thoughts. Very surreal, yet encouraging. So it’s hard for me to add to what he’s said, the issues he’s raised, and the challenges he’s issued, but I would like to suggest to Dr. Dicks, since you’ve raised the idea in another venue of accumulating thinking veterinarians in such a way as to pool their brains and come up with solutions to the problems faced by today’s veterinary profession, that Carl Darby be included in such a collection.

We all know where to go to find suggestions for more studies, more politically correct rhetoric, and more of the same. A desire to to find ideas that challenge the current system has not been demonstrated by the movers and shakers, as the real-world experiencers, as opposed to the ivory tower thinkers, have been fragmented, dismissed, shunned and/or ignored. Some voices, though, are beginning to rise to the surface with the use social media.

I’m all for collecting sound data, as Eden and I have forcefully argued in our “Good Intentions, Bad Data, Unintended Consequences” series. However, the time for the AVMA to make bold stands for the sound use of what data we have, incomplete as it may be or have been, has come and gone. As Carl indicated, we are dealing now with the effects of past passive representation and leadership. Following this up with more passive leadership is certainly not the answer. Soliciting the ideas of the Carl Darbys, the Eden Myerses and the Jeffrey Pecks of the world and seeking the answers to the questions that they, as veterinarians existing in the real world of veterinary practice, are asking is highly encouraged by this general practitioner.

I really should proof read what I write
When i was talking about exhibit 4 I meant to say an alarming increase in veterinarians WITH NO JOB OFFERS

Hi Mike,
I`m back!
I would agree that until your study there was no direct evidence of oversupply.However, when you look at the general trend of the studies, the majority of them expressed concern about oversupply.

I agree that AVMA not only can but SHOULD talk about supply.If the data is incomplete then AVMA should be vocal when others try to use previous studies to advance their own agenda. When individuals talk of shortages of large animal veterinarians and underserved markets AVMA needs to be vocal to set the record straight.
That is not being protectionist, but rather preventing others from manipulating data to justify new vet schools or expansion of schools.
I have no problem with AVMA admitting the data is incomplete.I do have a problem when they stay silent when others make statements that manipulate or spin the data to suit their purpose.
However AVMA policy statements are not your balliwick.

As far as unemployment goes your assertion is that unemployment is low
Are you including veterinarians that go directly from vet schools to internships as employed? Are these vets really employed or continuing their education? If we include these vest as employed are we also adding their (often much ) lower salaries.

If you only look at 6 months post graduation employment and you are including vets that are enrolled in internships isnt there a danger that you are way underestimating the unemployment rate?

It would be more accurate to look at employment rates in the second and third years?

If 35% of new graduates are enrolled in internships the 6 month post graduation employment rate will obviously be pretty low.

Exhibit4 in the study shows an alarmingly steep rise in the number of graduating veterinarians. is this not suggestive of a likely rising unemployment rate and oversupply rather than excess capacity?

If your theory that unemployment is low and what we have is a population of vets that are not working to full capacity why is the number of job offers decreasing

The report states;
The large number of offers garnered by some seniors illustrated
that regardless of the state of the economy or the state of the veterinary labor market, some
seniors (presumably top seniors from highly respected schools) hadlittle difficulty finding
employment upon graduation

I dont really think you can draw any conclusion from that statement without knowing how many jobs these vets applied for.IF a vet applies to 100 practices for a job he/she is likely to be more successful gaining employment than a vet that only applies to his/her home town clinic.

This is like a veterinary school claiming that demand for veterinary education is high because there are 20 applicants for each place they offer.
However, if you analyse the data and look at the total number of students applying to vet school vs the total number of places you will find the ratio to be 1.7:1 so there are really only 1.7 students applying per place, not 20.
Why? Because each vet student is applying to multiple schools.

Maybe this is the same situation with some vets.It may well be that a relatively small number of highly motivated students (who have talked to vets in practice and have realized the job market is not very good) that have flooded the available jobs with their resumes and snapped up all the good jobs .

Can you explain how excess capacity would result in an increase in the number of vets with no job offer at graduation?

If we are saying that most vets are employed, they are just not working to full capacity then the job offers should not be changing.

I suspect if you looked at the job market for vets more than 1 year after graduation you may see a much different pattern. Not only does that exclude the interns, but since now all of the vets are just as aware of the job market you are less likely to see a disparity between the number of jobs vets apply for.

If you think this is just theoretical rambling I can tell you as a practice owner that it is not unusual for me to receive many resumes at my hospital from students that are hundreds of miles from where I am more than six months before the student graduates.These are well organized, ambitious veterinarians that are casting their net widely in search of a job.
I also receive resumes from students that graduated and took the summer off and now as the start of loan payments are due are desperately looking for a job in a market where most of the jobs are already gone.

Lets talk about demand again

I think we are seeing perfect storm that has really stymied our efforts to increase demand.

Firstly the arrival of internet pharmacies has resulted in a drop in revenue for most practices.
Vets are not very business savvy and in the past we used markups on pharmaceutical sales to offset the cost of the professional service we provide.

The internet pharmacies identified the soft underbelly of our profession and figured they could set up pharmacies and compete with us. They could work at a much lower markup since their overhead was a fraction of what it costs to run a veterinary hospital.

This has led to 2 problems
1.Loss of income obviously from loss of sales.
2.Lack of trust with pet owners.
Pet owners didnt realize (or did they care) that the higher fees we were charging for pharmaceuticals were subsidizing medical care.They just bought into the perception that vets were overcharging. SInce the nice old lady in the TV ad said you could buy the same medicine cheaper ( and clients tend to believe everything on TV or the Internet) the only loigcal conclusion was that the vet was ripping them off.If he was ripping them off with drug prices what else was he overcharging us for.

Now the wise(!) practice consultants (or mavens) told us to raise our fees for the professional services.We are professionals after all not drug salesmen.Stop whining about loss of pharmacy income and charge what you are worth.

That is fine in theory, BUT in practice you run into problems,namely;

1. Remember 2 from above.Our clients are already a little suspicious,All they see is that the routine office visit went from $40 to $50.If you look at the Brakke study a lot was made of the clients complaining that fees had risen quickly.

2.Without a national standard of care some vets decided to undercut their colleagues by offering cheaper services and in some cases this was achieved by taking short cuts in the level of care offered to the extent that many vets refused to do because they felt it was below an acceptable standard of care.

3.The proliferation of non profit organizations that have started providing basic care and routine surgeries has further added to the perception that vets are overcharging.

It is therefore difficult to raise prices without losing price sensitive clients and when non profits open up “Jiffy lube” style practices that limit their scope of services to routine procedures it becomes impossible to compete with them let alone raise prices.

Again AVMAs lack of understanding of the challenges faced by the profession has led us to the point where we are becoming a commodity.

Once we become a commodity then the ONLY way we can compete is by reducing prices.

On top of this we add the worst recession since the depression followed by a sluggish at best recovery.

So Mike when you should say we should not trivialize the effect of increasing demand can you now see why if we were face to face having this conversation you would now see my face getting redder and redder (obviously I am joking-but you would probably need to buy me another beer to calm me down).

Believe me we get the demand thing.

So if you want to accurately try to model demand you have your hands full

As I already discussed most of us have had to look pretty hard at our finances just to stay in business.
Nothing is getting cheaper.Medical insurance for employees is increasing at an alarming rate, drugs and equipment are getting more expensive.
Student loans are increasing at an unsustainable rate,vets that should be retiring and selling their practice are staying in the workforce to try to recoup their retirement losses due to the recession and we are seeing an unchecked expansion of veterinarians as schools, both domestic and foreign are cashing in on the readily available federal loan money.

This is where we are.You have been hired to save us MIke so please give us more than lower your prices.

I think your job is going to be very difficult.You may even wish that you had never taken this job. I would bet in 12 months time you would trade your job to become a dental flosser at a Crocodile farm.

Convince us that undercutting each other and price wars will not save us

Convince us that we need to regain the publics trust by setting acceptable standards of practice and policing ourselves.

Convince us that we need to stop unfair competition like non profits that perform services without means testing

Convince us that we have to stand up and tell the truth about the future prospects for our students

Convince AVMA to start advocating for us by helping us to restore our good reputation with our clients

Convince AVMA to speak out against anyone that uses our profession for their own self interests at the expense of the profession.

Convince us that AVMA will have the necessary vision and leadership in the future to fulfill its mission as a trade organization that serves its membership with due diligence.

All of a sudden I expect that flossing job is looking pretty good now.

Carl

Carl, this is the type of discussion I had hoped that the veterinary profession would entertain. Many of your statements get to the heart of the matter of excess capacity and I will respond to them one at a time.

From my review of the past veterinary workforce literature I would suggest that the first real sign of trouble came from the Wise and Kushman study. For the eight year period prior to this study the rate of growth in the supply of veterinarians was 3.9% per year and exceeded the growth in demand. Based on these numbers, the Wise and Kushman study forecast a supply-demand imbalance growing in the decade ahead. Following this study there was no increase in the rate of increase of veterinarians for 2 decades, while demand continued to increase. The best data available would suggest that during this 2 decade period demand grew faster than supply. Then in the late 1990s the profession receives conflicting signals from the KMPG study and studies indicating the shortage of rural/food animal veterinarians and public health veterinarians. Most of the studies like the KMPG study talked of an oversupply of veterinarians, but failing to present any evidence of unemployment did not support the claim of an oversupply. To be clear, there was no evidence of veterinarian unemployment because there was simply no data collected, not because it did or did not exist. But this important piece of data was not collected until the current workforce study. But, excess capacity may have already been a problem in some veterinary practices, unfortunately it wasn’t measured and in fact the KMPG study noted that excess capacity in practices (underemployment) was a result of “indivisibility” of labor, but was not actually measured in the study. The focus of the workforce study on excess capacity, a concept that looks at both oversupply and underutilized resources, is the first study to definitively describe the problem or “too many veterinarians”. While unemployment may be low (indicating no supply-demand imbalance), excess capacity in practice (underemployment) exists and indicates that veterinarians are moving into the profession and dividing up in smaller pieces a slower growing demand.

AVMA can talk about supply, provided there is data to talk about. The data on veterinarians entering the workforce is incomplete and the data on veterinarians leaving the workforce is almost nonexistent. We need better data here. We definitely need a better measure for unemployment.
The role of the AVMA economics division is to influence all decisions through the deliverance of unbiased information. As we continue to collect and analyze data the division will provide alternative strategies and the consequences of each on all entities in the profession. The WAG recommendations include a request for research on both the supply and demand sides.

Currently, the workforce model indicates that demand (across the board) would need to increase by 14% to eliminate excess capacity. Unfortunately we currently do not know the income or price elasticity of demand for any veterinary services. But, this is a top priority of the division and hopefully by this time next year we can provide that information (if veterinarians will provide the data needed). In the articles that I am now posting on AVMAs web, I discuss current trends in the output and prices of veterinary services relative to other service industries and other health professions. This is important information to the profession. However, we need to understand the price and income elasticities for various veterinary services as they are likely different. For one service you may be able to increase price and reduce the number of services to increase profit, while for another service lowering price and increasing the number of services may increase profit. Different services will have different price and income elasticities. In general, as the economy improves, disposable incomes will improve and the demand for veterinary services will improve.

The Brakke did not show that price was not a factor in the selection of a veterinarian. The study ranked reasons it did not measure the impact of raising or lowering prices for specific services within a practice. Increasing prices because the study was interpreted to indicate that price was unimportant may have produced adverse consequences. The customer’s level of disposable income and the price of the service are certainly important factors in the customer’s willingness to consume a service. But knowing this falls short of the knowledge necessary to make pricing decisions. To do that, we must know the exact effect of price and income on the demand for each type of veterinary service.
Finally, my comment that veterinarians focus on demand should not be trivialized. Certainly, those responsible for the supply of veterinarians now have the information about the state of the profession. Individual veterinarians can do little about the supply but they can affect demand and their own internal finances. As an economist, in an association of veterinarians, working on the demand side would appear to be the prudent place to begin. And, the success of this effort will depend largely on those veterinarians that I serve.

Mike,
thanks for your reply.I am glad you are listening because in all honesty I think that AVMA does have a listening problem.But that is just my opinion.
I am in the process of dissecting the taskforce report.I would be thrilled to have more discussions about this important topic.I look forward to reading your insights.
I hope that you efforts encourage AVMA members to read the whole report rather than just the summary.
I know you can never have enough data and i think it is vital to collect more data.After all we dont even know for sure how many veterinary hospitals are in USA.

it is clear from you review of the history of research into the supply and demnad issues of our profession that excess capacity was predicted as early as 1978. This was a common theme in many of the reports you reviewed.
In fact the Committee of veterinary medical sciences suggested that limited enrollment should be considered to maintain the balance between supply and demand.

My biggest issue is that AVMA has publicly stated it will not interefere with supply of veterinarians.

AVMA is a trade organization thats primary mission is to promote and protect the veterinary profession.

If COE is truly independent of AVMA there should be no reason why AVMA cant at least talk about supply.

I just mean talk about it.I understand they cannot influence COE, but to stand by silently when there is blatant misrepresentation and spin of the data being used to justify expansion of is unconscionable.

Clearly the is a SUPPLY and DEMAND problem.It cant be fixed by only addressing one side of the equation.

Well it can, but then you would have to let market forces balance the equation.I think that would be very damaging to the professsion as a whole and it seems to me that no-one benefits from schools going out of business,increasing unemployment and decreasing revenue leading to a survival of the fittest or last man standing.

You state that we should focus on demand because that is what we have control over.
However, if you run your workforce model and assume that expansion of vet schools will continue as long as there is federally available money (which I think is a reasonable assumption) then you will find it is IMPOSSIBLE to raise demand enough to make up for the increased supply.
This needs to be modelled and reported.Unless state legislators have more than just the manipulated data provided by organizations looking to make money off educating veterinarians how can they make an accurate assessment about the validity of the data they are fed.

This to me is where AVMA has lost its way.Its aversion to making any comment about the oversupply (excess capacity) of veterinarians has EXACERBATED the oversupply problem

AVMA needs to get out of the accreditation business so it can truly advocate for the profession without any risk of anti-competitive lawsuits.

Lets get back to demand.

You say we have control over demand.I think that is partially true.
So many thing have happened over the past few years to affect demand and the market is currently pretty stagnant.

So if you have a stagnant market and an increase in supply one of two things happens
1.Everyone sees revenues drop
2.Some practices do well at the expense of others.

So in your modesl how much does demand have to increase to make up for the increased supply?
THis should be published.

Pricing and cost of services was mentioned in the report as being possible able to reverse the effects of increased supply, but I did not see any data in the report to back this claim up.
I think it is an optimistic statement at best and I am not sure it holds up to any economic scrutiny.

I think most vets are pretty bad at pricing and cost analysis (even though several reports mentioned the need to imporve the business education of vets).

However, reducing costs to increase demand is fraught with danger unless you really understand the cost of doing business.

After all if you lower your prices so you cant meet your fixed expenses you will just go out of business quicker than if you had higher prices and fewer clients.

It is not a 1:1 ratio between lowered prices and increased volume to recover the loss of revenue from the price drop AND provide extra profit.

If you ask veterinarians how much extra business do you have to have to compensate for a 10% price drop I would bet most of them would say 10%

You know that is not true.You may need a 30% increase in business for a business to maintain its level of profitability after a 10% price cut.

The other important point is that visits have been declining for 10 years and many practices have already cut staff and undertaken as many cost saving measures as possible already.

Now you are asking them to decrease the revenue in the HOPE that it will generate enough increase in business to save their practice.

They are already so close to their break even point that ANY reduction in fees may seal their doom.

The Brakke study did not show that cost was a significant factor in pet owners decision making process.
Has that changed? If so why?
That would be something to study because it will not only affect the accuracy of your model, but it would lend credence to the recommendation that reducing the cost of providing veterinary care will help to increase demand.

I think cost IS a factor today.is this because of the poor economy or is it the perception that 1800-pet meds has aggressively fostered that the vet is overcharging or is it the proliferation of low cost spay/neuter clinics that has recued the value of the service we provide.

This should be studied too.

BUT the most important issue to me is that NOTHING can be left off the table.
A balanced approach is the only way we can improve the health of our profession.I bet you could prove that with your current model.

AVMA cannot ignore the supply issue.The past 35 years of oversupply may now be coming home to roost.

Carl, thanks for the thoughtful response. You have made many very good points. Some of your questions I have answered in a new series I have begun at AVMA called Exploring Veterinary Economics and I will continue to provide insight on the workforce study every two weeks. I want to take the study apart piece by piece so that everyone understands what data we looked at, how we analyzed it and then hopefully the readers will be able to see what we saw and draw similar conclusions. If not, then we have more to discuss.

Rugby, what a great game. One of our all time great football players and coach (Knute Rockne) made an observation that really applies well to both games. As a coach, I play not my eleven best, but my best eleven. Most great coaches know that you play the players that play as a team and a team that will be best positioned to beat the other team. Of course to do this you have to have the big picture of both sides of the ball. As you say, there are four fullbacks and you need to know not just the characteristics of each, but how they interact and work together.
We too need to understand the characteristics of all the players in the markets for veterinary services. WE need to understand the economics of our practices, the demands of our customers, the location and characteristics of those customers and then we have to develop a business plan to give us the best chance for success. Certainly no one likes to hear that we are going to do more research. But the research will be focused on finding solutions. The objective is to increase demand, because this is something that veterinarians have control over. A second objective will be to be more efficient, to work smarter not harder or longer. That is, figure out how to make great profit/wealth with less effort while providing better care. Again, this is something we have personal control over.

The Veterinary Economics Division and the Veterinary Economics Strategy Committee are in the process of developing a research plan in response to the 11 WAG recommendations. This plan will focus on answering questions that will help to identify strategies to move forward. For instance, from the workforce study we found that 53% of the practices surveyed indicated they were not working a full capacity while 38% said they were. What are the differences in the characteristics of these practices?

I will continue to provide information about the workforce study, the effects of possible changes in how we currently do business on excess capacity, and on the developing picture of the veterinary services industry. My apologies up front if it seems we move too slowly. Economists are rather fickle about insuring the biggest bang for the buck. Before my team takes to the field I want to know for certain we have a winning strategy.

Mike,
thank you for engaging in this discussion with Eden.As an englishman I can tell you I know nothing about baseball (apart from there is no crying in baseball apparently) so I will dispense with sport analogies (unless we can make some rugby ones).
I am thrilled that AVMA hired you.I read your review of the past 20 years in JAVMA and it was not only a breath of fresh air, but I would say the FIRST true acknowledgement of what many have been saying for the same 20 years.
I think part of the reason for the armchair quarterbacking comes from the growing degree of frustration with what many of us feel at the lack of ACTION regarding the problems that we wll now agree are facing us.
I dont consider ordering more studies really ACTION and unfortunately I beleive part of the problem was the interpretation of many of the past studies seemed to go out of the way to NOT say what was readily apparent to many especially in private practice.
As a practice owner I found finding an associate 7 years ago very difficult because I am in a small rural town.When I last hired an assoicate I got 6 resumes in less than 24 hours of advertising and over 2 dozen in the next 24 hours.It was apparent to me that there was a significant shift in the job market.

Now I am not very smart and I readily admit that I cant evaluate the workforce study as well as Eden, but given past AVMA reports I think understanding the RFP for this project is an important part of evaluating the report.
A good exapmple of this is the Foreign accreditation study by AVMA.This was commissioned in response to the Texas VMA expressing concerns over the effects of foreign accreditation on the US profession. However if you read the report they categorically state that they CANNOT consider the effects of accreditation on the US profession.SO what was the point of that study.It cant explore any of the negative effects of foreign accreditation so its value is very limited.

The inability of AVMA to consider these factors (citing anti competitive laws-which actually according to my information DO NIOT APPLY) precludes AVMA from its primary mission-To promote and protect the profession.

Getting back to the Workforce report.The finding of the report state a certain excess capacity which may conitinue in the future.I am not clear what factors effect this and how the figure quoted in the report for excess capacity was established.Is this a best case scenario or a worst case scenario and what are the assumptions that were made to come to this figure and what assumptions were made to predict what will happen in the future.

I think there is a real risk that Luddites like myself will make assumptions about this report that are erroneous and with a degree of doubt or “wiggle room” with how the data was analysed this could be used to make erroneous conclusions.

For example if we assume there is 14% excess capacity, but dont clearly understand how that figure was calculated we could say;

1.There are too many vets
2.Supply is outstripping demand for vets
3.Demand is falling
4.The pet owning population is shrinking
5.Clients have decided vet visits arent worth the money

So the report has concluded that there is an excess capacity.You have built a model of the profession.What is the next step?

Does the rfp include using the model you have created for some “what if” predictions. After all isnt the purpose of this exercise to evaluate how the profession is changing and what can we do to adapt to those changes?

So far the only concluison was vets need to find a way to provide care at a lower cost since that will somehow increase dermand. There was no mention of supply of vets.

We can update the model every year to make it more accurate, but if we dont use the model in any way to attempt to predict the future whats the point? so we can document our decline?

Isnt that what economists do.Create models and use them to try to evaluate the future trends using the model?

This reminds me of NAVMEC.I was a participation in the last NAVMEC meeting.The most significant speech in my mind was given by Peter Eyre.He told us there have already been 17 NAVMEc meetings and nothing had changed in veterinary education as a result of those meetings.

Unless we can use the data in a meaningful way just collecting it is unsufficient.AVMAs primary purpose as a trade organisation is to promote and protect the prfoession.NOT to stand by and document its decline.

let me finish with a sports analogy.I hope you get it (it is Rugby)

I am a winger(wide receiver) and I was just passed the ball from the scrum half(quarterback).
I am running towards the goal line (end zone).
I see 5 400 LB full backs (linebackers) in my path.

What do I want my coach to do?
Well a good first step is for him to at least be watching the game
He can tell me “run faster”-Yeah I already figured that out
He can send one of the forwards to help clear my path (run interference)
He can analyse the defense strategy and tell me which way to run

Before you were hired Mike I dont think AVMA was at the game
Now they are watching

The report has basically told the profession to run faster
Well we have been carrying the ball and running as fast as we can the past 20 years.The full back are still bearing down on us

AVMA refuses to consider the supply side of the equation bnecuae of the inherent conflict of interest being an accreditor and advoate for the profession at the same time

So I wont be getting and interference help

The workforce report is AVMAs effort to analyse the defense strategy of the full backs.it is a litle confusing exactly what they are looking at and we are worried they are only looking at 2 of the 4 full backs, but they are at least looking.

Unfortunately for me unless AVMA decides to use the information they have gathered to help me I will end up under 2 tons on full backs.

Carl Darby

“By all and any means bring your data, methods and suggestions to the table so that we can create the best solutions possible.”
In a word- no. That’s your job. I was all set to respond, especially about the NAICS data, when somebody pointed out to me a very basic fact. To abandon the baseball analogy and return to practice, where most readers will more easily connect: the clinic doesn’t prosper when the doctor cleans cages. Look, Mike, you’re skilled and you’ve got a good attitude. We just need you to apply it to the right task- which is generating and disseminating data that enables on the ground decision making by the people actually performing the work. That may be high school and undergrad students evaluating whether, where and when to attend vet school; it may be trainees evaluating what career path to pursue; it may be practitioners evaluating what business models and practices they need to enact; it may be researchers or regulators evaluating where they need to allocate their resources. To step into the doctor role for a minute in this analogy, we are asking you to practice evidence based management, just as we strive to practice evidence based medicine. The level of the evidence you are generating is weak- no matter how much of it you generate or how well. The tech tools and knowhow exist to generate qualitatively stronger and more useful information. Does the political will to do so exist?
It’s starting to. And so another practitioner and I are publishing some thoughts and aggregated extant data- not in the hope of influencing the established culture at the AVMA or other organizations- but of reaching like minded veterinarians, who may then feel empowered to contribute to that political will for fundamental change in the way we do things.

Thanks for providing the opportunity to comment and inform. Let me address your concerns one at a time.
The ACS data base from the US Bureau of Census samples the American population to provide demographic information to assist in modeling demand for pet services as indicated on page 38 of the Workforce Study. Note that the ACS was only used to provide accurate weights to the AVMAs Pet survey to insure that this survey represented the distribution of demographic characteristics of the American Public. The AVMAs Pet survey is used by Census to provide the general public data on Pet ownership and is cited in their tables. The appendix in the workforce study gives an excellent overview of how this “weighting” is accomplished. As a side note, let me point out an important fact about the AVMAs Pet survey. This is an excellent survey, robust in statistical methods, but misused in the profession. In each year that the survey is taken, the demographics (and hence the results) are weighted to the Census demographics – these are constantly changing. In comparing results of the survey across years there has been no effort to control for the changing demographic patterns and hence the effect of these patterns on numbers of pets and demand for pet services should not be compared without the caveat that there has been no adjustment for changing demographic patterns. This is important only if you are interested in cause and effect.
The AVMAs Biennial Economic Survey is another excellent survey tool. This survey is not a “subjective, survey of a small, admittedly badly skewed and likely non random sample”. This survey certainly passes all test of statistical rigor. If my saying this isn’t good enough, perhaps we should seek another objective opinion from one of our universities. But like all survey tools, the results are only as good as the responses – garbage in, garbage out. If veterinarians don’t take the time to respond with accurate information, the results will not accurately reflect the profession. Again, this survey suffers from misuse just as the Pet Survey since the demographics of the profession are changing. For instance, because women veterinarians make less than their male counterparts, and the percentage of women veterinarians is increasing, there will be a natural tendency for average incomes, for all types of veterinarians to decline over time.
That being said, why did IHS use the AVMA’s BES and membership data rather than the 2012 ECONOMIC CENSUS: Veterinary and Pet Care Services survey data? Because, we cannot get individual observations from Census, only aggregated data in compliance with federal disclosure rules. Please see appendix A of the report to understand the statistical reliability of the BES data.

Now lets talk about the NAICS data. First, good thought. I have already obtained permission to obtain the IMPLAN modeling system and data from the IMPLAN group at the University of Minnesota. This is the input/output (sector by sector and industry by industry) modeling system developed using Federal and state data with county level NAICS data. However, remember that the NAICS Census data all comes from surveys (see http://bhs.econ.census.gov/2012forms/PS54121.pdf for the Veterinary and Pet Care services industry survey). You may want to compare this to the AVMA BES survey. With the Census survey, the IMPLAN folks use linear interpolations to determine the number of veterinarians in each county. Our data base of members and nonmembers has over 100,000 veterinarians and we actually know where they are. So between the IMPLAN model and the AVMA data we can actually get to a pretty good measure (not estimate) of the number and location, type and size of practice. Our Pet survey data is the source of the Census data and USDA is the source of their animal data except for equine. We will have to look to the equine industry for that data. Suffice it to say that we do know how to put supply together and are in the process of doing it but it will take more than the 10 months we gave IHS to do the report that everyone pushed so hard to get. This is why we said the Workforce study was a good start. We have a lot of work to do.

Finally, I personally am perplexed by the constant assertion that AVMA has not acted on past studies. There are many programs and efforts that AVMA and others in the industry have done in response to the past reports as I have summarized in a recent JAVMA article (see April 15 issue). But most important, at least to me, is that they have established the VESC, the Veterinary Economic Division and hired me to run it. They have put substantial resources at my disposal with only the broadest of objectives.

The take away message for everyone in the profession is that AVMA has begun a new thrust in economics and as the director my goal is to secure the best data, develop the most robust models, and deliver the best strategies for increasing the profitability of veterinary practice, the opportunities for veterinarians and the long run economic health of the veterinary services industry. I am willing to include everyone that wants to move forward with these tasks.

Mike,
Let you respond? I’m delighted you’re willing to respond, that’s a base hit of a sort your team has only recently started nailing.

And thanks for the invitation to have a seat at the table. When offered this very input back in early 2012 DeHaven dismissed the idea of even letting anyone see the RFP for the study. But my value is not in being a team member. Rather I can be most useful to you as the independent observer, a commentator- like Howard Cosell or Bob Costas- who can and will provide feedback you aren’t gonna get from your owners, coaching staff and players.

I guess you are right to focus on the strikes and fouls instead of all the home runs I pointed out. A good coach knows he can’t win the game in the first inning, but he can sure lose it.

So the foul of subjective data? The working group called that one too. This technical error is rampant in this game. You can do better. And IHS did do better by using objective datasets in several instances- they used ACS and Census data, they use ag census data in their livestock model.

Which is why I am so frustrated that IHS then fouled with the use of AVMA’s Biennial Economic Survey- a proprietary, subjective survey of a small, admittedly badly skewed and likely non random sample- when it could have used veterinary specific data from the US Economic Census. Along the same line, why did IHS use the AVMA membership database instead of the state licensure databases? Your owners will defend the use of their proprietary data but I called this a strike because we know this approach doesn’t work. We’ve been using it for decades and look where it’s gotten us.

There may be a good reason IHS did this. Maybe this is exactly what was called for in the specs of the job. Since the RFP wasn’t made public, we don’t know- but we’d sure like to. Care to share? If the owners and managers of the team you coach are placing conditions on you that need to be removed, you all need to talk about that. If a mistake was made, admit it. This team’s fans love to forgive; it makes them feel good and it gives them something they can DO.

Or was it the money thing again? If your owners and managers aren’t throwing enough dough your way to do your job, that can be addressed. I believe the fan nation that is the practicing veterinarian has expressed its support for prioritizing economic data acquisition over, say, a new logo. They can be mobilized. Just say the word, they are still tuned in.

If IHS doesn’t have some very skilled GIS analysts they can apply to this (for a price, of course) I’d be very surprised- and prepared to talk to them about submitting a proposal to head their new GIS division. First project would be to overlay the datasets showing the numbers of established and new veterinary clinics and the number and location of veterinarians licensed in each state with NAICS category 541940 data. If you really wanted to get granular you could scrape the state VMA listings and the allied group directories for locations, hours and personnel. You could even add pet stores, shelters, EPA permitted livestock facilities, public livestock auctions, processing plants- I bet IHS’s data mining team has some pretty sharp scrapers to support their GIS team. No big deal to include the pet demographic and ag census numbers, although we all know animal presence in no way corresponds to expressed demand.

Put that database together. Then, then you can have models of supply, demand and capacity driven by non-biased real world data instead of an economically idealized and statistically controlled model to which we are expected to conform.

Messy and uncertain? Sure. The real world is. But better to have fuzzy comprehensive datasets that can be updated automatically and queried at will by the end user to yield granular patterns for on the fly, on the ground decision making… than an averaged and idealized model of non existent national metrics that make economists and statisticians happy.

“Most importantly the results of the current study suggest that there is a problem”
The results of the current study confirm what real world observers both in and out of the profession have screamed about for so long we are hoarse. It also concurs with multiple previous studies that were not acted on. Most importantly is that your clubhouse culture seems to be changing enough that your team can take effective action. Being new to the game, you may not fully appreciate how different attitudes are now.

Lot of innings yet to play. Keep swinging.

As a baseball coach with more than 26 years experience at all levels I am very familiar with the “couch coaches” who always seem ready to tell you what should have been done after they see how, what you did do, turns out. From that viewpoint, most coaches will tell you to just let it go, but that approach is reserved for the spectator and not a member of the team. So, in the interest of embracing the AVMAs desire to open the dialogue around “where do we go from here” regarding the Workforce study and the WAG report let me respond. To suggest that “Foul: Subjective data. Predictions that are totally unreal as far as how many FTE vets we need in various species areas.” and “… its predictions show a glaring lack of fit with real world knowledge”, implies that the estimates arrived at are not what you think they should be. That further suggests that you have made some similar objective determination of excess capacity in the veterinary services sector. We would be simply delighted to compare the data and methods of your approach and ours. More than the methods, we are particularly interested in the statement, “Strike: Bad source data, specifically the Biennial Economic Survey and the AVMA membership database.” This seems to imply that you do not believe these two sources of data are valid and yet go on to state, ”I am perplexed why objective data- which is publicly available and already collated- wasn’t used.” Again, I am rather new to the profession, as were the team members from IHS, so perhaps you can save us some time by directing us to that publicly available objective data that we seemed to have overlooked.

There is certainly something to your question, “why IHS chose to create a complex model for estimating demand instead of engineering a model based on exhibited supply and demand.’, and “I suspect the answer is the same as it always is: we used those methods and data sets because they were easy and therefore affordable.” The best economic approach is always to start with the individual marginal cost function for every veterinarian and aggregate these into a supply function and then aggregate the consumer preference functions of every pet owner into a demand function. But as you say this approach is costly and would require a great deal more than the 10 months granted to IHS to conduct the study. But, we did use the best available data (in fact collected some primary data of our own) that would help us approximate the supply and demand functions and we are reasonably certain that our estimates are in the ballpark, and that overtime these estimate will improve.
The usefulness of the model is that we now have a basis to which the success of all future policy actions and strategies can be measured and compared. Most importantly the results of the current study suggest that there is a problem and without action it will likely get worse and this is a definitive result that cannot and must not be ignored.
I would hope that the entire profession from student applicants to retiring veterinarians will embrace the need for better data, better analysis and better solutions to continue the long tradition of a profession in constant change to meet the changing demands of society. By all and any means bring your data, methods and suggestions to the table so that we can create the best solutions possible.