In the past month, three different publications have called me to get my take on the theoretically impending recession and how that’s affecting my income. It’s kind of a personal subject but I’ve never been known to be shy on the topic of my own finances.
In this case I’m happy to report that I’ve yet to see any changes in how my clients react to the news that their pets need X, Y or Z treatment. It’s business as usual for us here in South Florida—at least when it comes to our prices.
Sadly, however, it bears noting that our hospital’s costs have gone up significantly over the past year. I referenced this issue in my first post on pet health insurance and it’s not one you, as consumers of veterinary services, should ignore.
Healthcare costs are going up across the board. And veterinary costs aren’t unaffected. Over the past 20 years our costs have risen out of proportion to our prices. A vet practice owner can expect to take home a smaller percentage than ever before. And, of course, it trickles down to the associates, too. Let me give you a laundry list of why that’s the case:
1-Fuel prices have been steadily climbing. And after all, we all rely on shipping.
2-Vet products from drug manufacturers are increasingly expensive in light of the high prices pet owners are willing to shoulder for their pets’ care. A lot more corporate R&D goes into that—not to mention marketing! For vets, that means we have to shell out more in advance of your purchases-and risk losing big on inventory when drugs like Slentrol don’t pan out.
3-Wholesale suppliers, viewing the veterinary market as one flush with cash and increasingly willing to pay a premium on basics such as bandaging supplies and syringes, have upped their prices significantly—almost on par with that of the human medical market. (It’s clear to me that someone out there is making a killing on these fundamentals.)
4-Real estate prices have been through the roof over the past decade. Vet hospitals have not been immune to the mortgage crisis, either.
5-More recently? Fear of recession.
Add to that the fact that we’re largely unwilling to raise our prices at the moment—recession anxiety is part of it—and its clear we’re brewing up a storm of future price increases once it no longer becomes tenable for us to hold firm to these as a result of our inexorably rising costs.
And that’s all going to impact YOU in coming months. The more apprehension affects the increasing threat of recession the more prices will climb in anticipation of a serious downturn in our economy.
I’m not saying it’s going to happen; I’m just saying that fear is in the air. And fear is not good for vet prices—or for the economy as a whole.
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when i go to dolittler.com, i see 8 copies of this post. the one closest to the flea/tick post has at least 7 copies within the one copy, and no place for comments. time is 8am pdt on 3-10-08.
kabbage March 10th, 2008 09:57:00 AM
Sorry! I was learning to post off my iPhone. Won't happen again!
Dr. Patty Khuly March 10th, 2008 10:15:00 AM
This is interesting. We keep talking about this in our office as well. Nothing has changed in Boston, things are pretty business as usual.
What is NOT the same is the incessant reporting of the POTENTIAL recession, non-stop. The radio stations (NPR mostly) are obsessed and seem to be trying in every way possible to make this a self-fulfilling prophecy. I do not presonally believe we are in a state or recession, but we are definitely in a state of Recession Anxiety (love that term Dr.Patty!). While there are certainly a few big items looming (the cost of War and the "mortgage gambling crisis"), people in general just need to be more aware in the choices they make. However, hunkering down for what is being exaggerated in the media to the Coming Dustbowl does no one any good.
I appreciate the way you broke it down, and made the pieces palatable. This list is precisely they type of thing I have been discussing among friends and family. Some of the bigger concepts (oil greed) are too abstract to swallow, but seeing in smaller bites really brings it home.
Creature of Habit March 10th, 2008 11:46:00 AM
Okay, so my post got eaten. Isn't that sweet. Puts me in a much better mood--not.
Here in the Merrimack Valley of Massachusetts, it looks an awful lot like a recession--not a theory, not impending, and not Recession Anxiety.
As for the "mortgage gambling crisis" and people needing to be "more aware in the choices they make"--my house loan is a fixed rate loan, and it's a decent rate. I have very good credit. A little over four years ago, when I was buying my house, I had no trouble getting a banker to give me a loan.
But he tried very, very hard to sell me a 5/1 ARM, swearing up, down, and sideways that it was the BEST POSSIBLE choice, that I was making a foolish error in insisting on the fixed rate loan...
I didn't believe him, because not only am I a fairly educated person, but my sister and two good friends are lawyers, my uncle's a CPA, my cousin who has since died was a financial planner--I had free access to high-quality professional advice in making the right choice, and, no small point, in making sure that the paperwork I signed really said what it was supposed to say.
Other people, with fewer resources, and not realizing we had left the era when the bank had as big an interest as the borrower in ensuring that the borrower was able to handle the loan, believed the lies the loan officers and mortage brokers told them, or, in too many cases of the more, ahem, _independent-minded_ mortgage brokers, didn't realize until too late that the paperwrok they'd signed didn't say what the broker told them it said.
And no, it's _not_ a reasonable expectation that working class people, even with some college education, should be able to read and understand every word of the voluminous and extremely complex and confusing, legal language in a mortgage contract. That's why you need _your_ _own_ lawyer--even though the bank will promise you you don't.:(
Lis March 10th, 2008 04:17:00 PM
Everyone wants to pile on the Oil Industry because they think gas is expensive and they pay much more attention to inflationary prices in gas than they do on any other good. Fair enough.
Let me say a few words of thanks. Every item of plastic, every advanced fiber, the majority of the surfaces we come into contact with every day from the asphalt on our streets to the containers that hold our food, nearly every medical device that isn't titanium.... are due to petroleum.
I am all for the US military going over to the Middle East and keeping our flag over those oil wells. It's the reason we supported the Mahujadeen against the Soviets, they were trying to plant their flag, it's the reason we don't want China in the Middle East.
OF COURSE this war and all the others in the region are over oil. GOOD! That makes it 10 times more legitimate in my mind than ousting petty dictators and democracy. Those are fantastic causes, but I'm not a bad person for wanting my future to be fed with oil that my country is securing on my behalf.
It's either going to be Russians, Indians, Chinese, or Americans suffering for our global need for oil. It's not greed, it's an addiction to a scarce commodity. The greed comes into play on how much the oil barons (OPEC) want to pump, limiting supply to keep prices high. They have no other industry or accomplishments of note to rely on and one day the wells will run dry.
Oil is almost as precious as air, and if your own government said we can't breathe our air because the caribou might be harmed, you'd see riots. If our own government said that we're going to give up the air that we discovered and drilled in the air rich regions of the Middle East simply because the Russians and the Chinese are closer and the Islamofascists want to bleed us dry in the market for it, you'd hear little complaints of "no war for air."
If you truly want no war for oil, give up plastics, give up your car, airplanes, boats and ALL the benefits we gain from them. Give up television and newspapers, give up computers and the internet. Give up modern medicine and research, give up cosmetics and all of your clothes. Give up fertilizers and all the food that is grown on them and brought to the market and your table on the back of oil.
I say drill our coasts dry, drill ANWAR, claim the north pole, and protect our interests in the Middle East.
Not one of those snatch and grab activities need preclude alternate research in alternative fuels. The more the better. It's just stupid to give up on the existing fuel and become slaves to the bear, the dragon, and the Asian elephant in the room.
Border Wars - Christopher March 10th, 2008 09:05:00 PM
What a timely post for me. Recession? How can the average folk not be feeling the squeeze with home heating, gasoline, rising services, food, real estate taxes (hefy in NH)? Forclosures are way, way up----and I am in Southern NH, very close to the Merrimack Valley and about an hour from Boston. Incomes are not keeping pace, and in my opinion, now is NOT the time for businesses to increase prices, if at all possible.
It may come as a surprise for the public to learn that the USPS Rural carrier segment is paid on a "piece" basis and not under the Fair Labor Standards Act. After completing a mandated "mail piece count" on Friday March 7th, the Northeast as well as other parts of the country have lost "big-time wages". This followed an arbitration award retroactive to '06 (we went without contract or raises for 2 years) and what we were awarded to 2010 has been wiped out and then some. Why? Because advertisers & companies have "cut back" and patrons are not "buying" at the same pace.
To share what this means to my "personal pocketbook"----I now have the "option" to work an additional 26 days, yes you read right, 26---- to maintain my current salary. Some did not fare as well, and are opting to work the additional 26 or 52 days---6 day week, and/or still lose part of their current salary.
So when I read of folks (especially town & state employees) grumbling over paltry percentage raises----it is hard for me to sympathize, at least they haven't 'lost' wages.
To relate this to veterinary care, well, I have always sacrificed where needed to continue to provide quality care (except for Edgefield & Dover VH, NO quality to be had at those clinics!!!)---but I will attempt to be more selective with the "extras", to hopefully be better financially prepared for the "unexpected". I wouldn't be surprised if many pet-owners attempt to "cut back" in this department also.
ps. I have not been receiving threads ----
Barbara A. Albright March 10th, 2008 11:52:00 PM
Lis~ if your post is responding to mine, you are WAY off base. I've noticed you like to pick at my posts, so let me clarify for you: I was speaking directly of FLIPPERS, not "working class people". Nowhere did I say that or imply it. Your response speaks much more to your attitude than to what I posted. Accuse me of not being clear, or even confusing if you want, but don't twist what I wrote and don't misinterpret my meaning based on YOUR issues with such a holier-than-thou attitude.
I have repeatedly said to friends the same thing you posted, when I bought my house, they approved my loan at $150,000 MORE than what I was willing to pay. I have a higher education and even though I have friends that said things like "that's just how it is", I could not understand the process either but had the common sense to say "we can't afford it". Not everyone was that level-headed in the buying frenzy around here. Those folks were not gambling, they were pressured and preyed upon. MY post about "mortgage crisis gambling", my "issue" is with the people that were buying up and flipping real estate for big profits- GAMBLING. They lost on this round! They contributed directly to this crisis and now all their high-priced gambling has back fired, and WE are going to foot the bill with a bail out. Because let's face it- when everyone gets bailed out, the non-attorneyed folks are not going to know how to navigate the system, we are not going to help them. It's the folks that have the money to hire lawyers to navigate it for them that will profit from a bail out.
When I said "While there are certainly big items looming, people need to be more aware of the choices they make" I was speaking to the consumerist tendencies that Americans have relished the last 6 or 10 years (myself included). An attitude that everything is "disposable". We need to look at the things we buy and the choices we make with a little more reflection on whether or not we really 'need' it, not just 'want' it. Once we are truly in a recession, or depression, changing how we purchase and consume will be corrected forcefully. I was merely stating that it's best to start practicing now.
And Chris, call me crazy but when people are having to choose between heat or medicine, and Exxon Mobil is posting the largest single profit in the history of the United States, I'd be happy to pile on the oil industry. I think they are fascinating lot, and I wonder how they sleep at night. Oh wait, I know! They sleep in 60,000 square foot mansions with the thermostat at 72 degrees while people in Maine are freezing to death and young soldiers give their lives. Nice.
I work in Boston and NY and so far we are not feeling a pinch. In fact, NY is going gangbusters. I guess the super wealthy are profiting from these rate drops. Figures. I think rural areas and areas dependant on cars are feeling the hit much more than urban centers, JMHO.
Creature of Habit March 11th, 2008 08:35:00 AM
ugh. money. i just put a $1300 deposit down for the treatment of my dog's acute hemolytic anemia. nothing like asking the front desk staff if they are running it through NOW cuz it might bounce if they don't give me time to get home and transfer money from my savings. today my credit card is my friend. i am just hoping that she pulls through...i can't believe that just last night i had to pick her up and restrain her as she was throwing a tantrum at one of my vets and her husband/my landlord.
Sarah March 12th, 2008 06:54:00 PM
We had a $300 dental visit for my kitty with the gum problems. She lost another tooth to decay - but seems just fine now. What are you supposed to do? Leave a companion in pain? Recession or no, you just can't skimp on some things.
2CatMom March 13th, 2008 11:38:00 AM
Ahhh, Christopher. Refreshing, your lack of hypocrisy.
Dr. Patty Khuly March 17th, 2008 09:13:00 AM
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