DVM Newsmakers Summit: Understanding consumer attitudes

San Diego

-- When it comes to delivery of veterinary medical care, are consumer expectations changing? The answer, according to a DVM Newsmagazine panel discussion, is yes, right along with the growing sophistication of the delivery of medical care.

Greg Kindred

From left, AVMA Marketing Director Jim Flanigan, CVMA Executive Officer Sue Geranen and private practice owner Michael Andrews discuss economics and veterinary medicine at a DVM Newsmagazine panel discussion at CVC West in San Diego.

But the current economic recession is testing veterinary medicine and pet owners in entirely new ways. At the recently concluded CVC West meeting here, DVM Newsmagazine asked a panel of thought leaders to address these questions and more. Excerpts from the discussion follow.

The panelists included: Michael Andrews, DVM, owner of Woodcrest Veterinary Clinic in Riverside, Calif. and former president of the American Animal Hospital Association (AAHA); Jim Flanigan director of marketing for the American Veterinary Medical Association (AVMA); Sue Geranen, executive officer of the California Veterinary Medical Board; and Dr. Richard Timmins immediate past president of the

Greg Kindred

Dr. Richard Timmins, past president of the Association for Veterinary Family Practice, and Dan Verdon, DVM Newsmagazine editor, participate in the discussion.

Association for Veterinary Family Practice.

DVM Newsmagazine

Editor Daniel R. Verdon moderated the panel.

Flanigan: The veterinary profession seems increasingly concerned about the public’s perception of it. In my estimation, the veterinary profession is one of the most beloved professions of any in the United States. Whether it is the history of the profession, whether it is the James Herriot legacy of treating all animals great and small, or whether it is the times that pet owners today are receiving great care from veterinarians. That perception does not seem to have changed at all.

Greg Kindred

Dr. Jim Flanigan

Veterinarians are perceived to be honest, trustworthy. The concerns that the AVMA gets from members about consumer attitudes changing or increasing economic health of the profession don't seem to be born out. We have begun to invest significant amounts of money in studying the perceptions of the public of both pet owners and non-pet owners, because all humans are affected by the work of the veterinary profession. Consistently, we are finding that the direct research of consumer attitudes does not seem to mirror the perceptions of veterinarians about their attitudes. There seems to be a disconnect on a number of levels. It could be about the level of care those consumers are willing to avail themselves of.

Andrews: I think attitudes are changing some. There are many changes going on in our profession. Clients have really increased expectations. I'll take a couple of examples: pain medication is one; access to specialists is another one. I think clients are coming in with a certain level of care that is expected. The other thing that is impacting this discussion today is the current economic situation. My practice is feeling it a little bit. And there is apprehension in the air these days, and that is going to affect attitudes as well. The consumer confidence level has never been lower. Foreclosures; certainly those of you from California understand that is an ongoing problem. The credit crunch is everywhere, and I think that it has to have some impact on our profession. The good news is there are some opportunities available because of it. In the end, this is really about perception of value; it is not about price. We can improve our perception of value if we pay attention to the things that are important. I think if we do those things, we will be in good stead moving forward. Six months ago, the economy wouldn't have likely been as big a part of the discussion as it would be today.

Verdon: Let's talk about the recession. You cannot turn on any news program or open up a newspaper right now without a story about this economy. DVM Newsmagazine has done some polling on this subject, and I know that the American Animal Hospital Association has as well. We definitely get a sense that veterinarians are aware and worried about the current economic climate. AAHA's data didn't necessarily show revenue declines among veterinary practices. The concern might not be translating into the reality of what's happening in practices financially. Let's talk about this recession and its impact on veterinary practices.

Flanigan: Dr. Andrews pointed out that consumer confidence is the lowest it's ever been measured. It might be as much psychological compared to the resources needed to pursue veterinary care. Last month the actual amount of spending by consumers went down, compared to the year before, not by much. But in a time when we expect constant growth in consumer spending, it makes a big difference. In the case for veterinary medicine, veterinarians, at least for the past decade, have seen increases in spending whether it has been an increase in fees or an increase in utilization of services. Depending on the estimates, it's between 5-7 percent each year. Projecting out for the next year, if you were to have no growth in spending that would be perceived as significant by veterinarians.

(A drop in spending) is probably not related to a lack of resources. Remember that 20 percent of pet owners don't pursue veterinary care. On top of that, the people who are experiencing real financial pain, people losing jobs, looking at foreclosures on their homes, behind on payments... those people represent about 3 million foreclosures a year. There are 70 million pet owners in the United States. Earlier this year, a study was released, done by communications agency Fleishman-Hillard, which asked consumers what they would cut back on if they needed to cut back. Pet supplies and veterinary care were near the bottom. A higher percentage of consumers said that they would cut back on their groceries or their entertainment expenses.

That's not to suggest that nobody would cut back on pet spending, because one quarter of the people responding said that they would consider cutting back on veterinary care, but again it represents a small minority.

The danger in this current environment is that veterinarians catch the same kind of negative attitude toward the economy that the general consumer has. It is really psychologically driven. The people who actually might cut back are a small minority. Yes, people are concerned, and you may get more questions or you might perceive more pushback from consumers on the cost of services. It puts the onus back on the veterinarian and the team to do a better job of explaining and communicating the value of the recommendations to overcome that heightened sense of concern about the economy.

Andrews: I have two practices in Calimesa and Riverside, Calif. We are seeing appointments that were routinely scheduled further out, now they can get in the next day. Income has not been hugely impacted. But it is a bit worrying to see that kind of trend. We are filling up, but we are filling up far less frequently.

But I think the issue is one in terms of the public being cautious. This is not your run- of-the-mill recession. In that financial markets across the world have been impacted and governments have gotten involved to solve some of the problems that have been created. There is an election about to happen. People are just waiting. They are not coming in for things that they might have ordinarily called the next day about. They might put off procedures that are not of an emergency nature. NCVEI has a new tool called the Economic Tracker they started. While it has relatively small numbers of participation, if I remember the data correctly, about 25 percent of respondents are using the tool to track monthly income this year to last year. They found about 25 percent of those practices were up a modest amount and the other 75 percent were up to down a little. I think if you did that study one year ago, those numbers would probably be reversed.

There is also an opportunity here too. We should focus on what creates the perception of value. You have to understand that every one of our clients is not the same. And we need to try to work with those people in a way that connects with them. There are also staff-training opportunities. If we are a bit slower, those opportunities are there. Let's reinforce what we are doing right.

Verdon: From a state-board perspective, Sue can you comment on the economy and it's impact. When complaints are filed by consumers, do they often have a monetary component?

Geranen: Economics is always a big issue for consumers. There is a need for advanced care and basic care. We get complaints that do involve the cost of the care. Sometimes it is not the cost per se, but more directed to the estimate. A consumer might say, 'They said it was going to be $200, and it was $800. I don't have it, so do I have any recourse?'

A state licensing board does not have jurisdiction over fees. Often we ask them to go back to the veterinarian to discuss it further. Oftentimes, the veterinarian isn't the one who wants to discuss it with the client, so the client is then asked to talk to a staff person. The consumer gets even more frustrated. It can be kind of a catch-22 because consumers can complain if they think they have been overcharged, or if they haven't been offered enough services or options. Even after they complain, we do a third-party review. We tell them there is no violation.

I have one of these comments here. 'You (the board) stated that (our dog's) care was appropriate, but I feel the appropriate referrals were not made, and I feel that this referral is a critical component of good medical care and this protocol was not made in (our dog's) case.'

This consumer is making that determination even after the complaint has been reviewed by a disinterested, third-party. We have veterinary consultants in our office and a network of veterinarian licensees who review complaints. I know that veterinarians, RVTs and the profession is in a tough spot, because sometimes you don't know which way that consumer is going to go.

Timmins: Have you seen any change in the number of complaints over the last six to eight months?

Geranen: We have not seen a change in the last six or eight months. We have seen a change in the numbers of complaints over the last five or six years. We have been pretty steady for a lot of years, running at about 450 complaints a year. In 2002-2003, there was a spike from 450 to 811 that one year. It has been pretty stable at about 650-660 a year. It sounds like a lot, and it is a lot compared to some states, but for the most part the majority of those complaints are found to not have any merit.

Timmins: We have heard that people value their animals enough and will not decrease their spending on veterinary care or will do so as a last resort. Dr. Andrews

Greg Kindred

Dr. Richard Timmins

pointed out that in his own practice, he started to see a little bit of change in the way clients are scheduling elective procedures. They may be postponing care, but we haven't seen large numbers of complaints. It's one thing we have learned with this economic situation over the last couple of years, is we just don't have the data to really know. The soothsayers all say we will tell you what has happened after it's happened. So, we just don't have the data.

Do any of you work closely with shelters? A number of people are worried about animals left behind. It is a real problem. There are newspaper articles that propose that it's fueling the relinquishment of animals.

Flanigan: People don't spend a lot of money on their pets. In 2006, people perceived they spent about $30 billion on veterinary care for their pets. The estimates are that people spend $70 billion on weddings. The average household spends about $300-$400 a year on veterinary care. People are spending more on cell phones, hair-care products and personal care products. One of the things we need to be aware of is that veterinarians are going to be impacted by the economy as well. Veterinarians buy gasoline for their vehicles. They have to deal with rising insurance rates for their homes because companies don't have the investments to keep rates low on premiums. Veterinarians are impacted by the rising costs of groceries. Veterinarians themselves are being impacted by this economy. That is potentially translating into veterinarians and their teams interacting with consumers to the degree that they may be oversensitive to feedback from consumers about price.

We know there is a large segment of the population that we consider to be price aware, not price sensitive. Those are people who ask about price, but that doesn't mean they are unwilling to pay. I think there are numerous studies that suggest that people that ask about price are no less willing to pay or go through with procedures. But it is the veterinarian's perception of what they are saying that is impacting the communication between the consumer and veterinarian.

Andrews: I am in my early 50s now, and I can think back to previous recessions. This is a different kettle of fish. We didn't have $700 billion to bailout firms that are ready to go under after being in business for 100 years. We didn't see a collapse of the banking industry. The number of foreclosures was nothing like it is now. Some regionality is

Greg Kindred

An audience member joins the panel discussion at CVC West in San Diego.

involved. This is just not a run-of-the-mill recession. There is unease, and I suspect the current election is adding to that. In six months, we may all feel differently. I sense right now this is not a typical recession. If it is more severe, it will impact us more. That doesn't mean they won't spend money with us, but I think we need to make sure they are getting excellent service and value.

Flanigan: When consumers are very sensitive to price, they are going to wait. At the same time, there was a perception of wealth that people had based on the value of their home, and at the same time their 401k was skyrocketing. And it helped buttress his or her ability to go out on a limb financially for a pet that somebody loved. For most Americans, that doesn't really exist right now with the stock market and home values falling. Those values used to underpin many choices people made.

Andrews: I think there is a sense in our communities that things are a bit less active. I can’t speak to the specific issues of euthanasia and so on. Dr. Timmins mentioned the need for data, and I think we haven't seen the data. It's going to take a while for that data to come out to show us what is truly going on. In the Riverside- area some people haven't just lost value in their homes, but they have lost their homes or walked away from them.

Timmins: Because we are caught up with trying to make decisions with perceptions, I think what this underscores is the value of the data you can generate in your own practice. Most of the practice management programs can give that to you. We need to keep watching this, and need to find out what these changes add up to. It is going to be extremely important to see what has been going on in practices, now more than ever. And we have the tools to do it.

Listen to excerpts from the DVM Newsmakers panel discussion below:

Part One

Part Two

Part Three

Part Four

Part Five