Jobs, Franchises, and...Dinos?
Glad its the weekend! Not sure about all of you, but this week seemed full of meetings more so than usual. We are blaming it on the long weekend, but we hate when Tuesday’s feel like Mondays. Cheers to hoping this next week is more of a normal, summertime week.
—CN & JB
Company Performance (6/30/22 - 7/7/22)
PetSmart Franchise Model
(Source: GIPHY)
Just like many fast food chains, PetSmart is moving to a franchise model for veterinary services within their stores. This model intends to reduce the need for veterinarians to invest in buildings, equipment, and other overhead costs. And it provides a ready customer base. While this is not the first time a big name has attempted a franchise model, it will be interesting to see how it will work out given the current economic environment.
Prehistoric Animal News
(Source: AP News)
Have you ever wanted to be like the rich old man from (the original) Jurassic Park movie and decorate your house with real dinosaur bones? Well now is your chance! A 76 million year old skeleton of a Gorgosaurus (not a T-rex unfortunately) is going up for auction at Sotheby’s. You will need a rather large space for this carnivorous cousin of the T-rex since it is 10 feet tall and 22 feet long. Just will cost you a mere $5 -$8 million. Who needs a mansion when you could just own the dinosaur skeleton that will probably only fit in one.
Payment Plans Can Help Increase Access to Care
(Source: GIPHY)
In a recently accepted research article, a study looking at 6 years worth of payment plan data found that:
The implications for nonprofits working to address access to care is that by directing donor dollars to cover the 6.9% that is potentially left unpaid in meeting pet families simply facing cash flow challenges, a non-profit clinic could provide 14.5 times the veterinary care versus full subsidies. In for-profit clinics, allocating some of a clinic’s discount budget may similarly yield 14.5 times the care for clients likely to be declined by traditional credit options.
Financial access to care is the most significant barrier to pet healthcare. There is a lot of work to be done in this arena, and finding the best alternatives to help all pet families will increase the economic health of the industry.
Recession foreboding…or not?
(Source: GIPHY)
I have been getting a lot of questions of late about the macroeconomy, whether we are headed toward a recession, and what this all means for veterinary medicine. To start, any one is telling you one way or the other if a recession is coming is just taking a guess. We don’t know what will happen, and my own thoughts change on the subject almost daily.
A recession is defined as 2 consecutive quarters of GDP decline. We did see a very short recession in the beginning of 2020 due to COVID-19. AND we had negative GDP growth in Q1 of 2022. Q2 estimates for 2022 (not official estimates, but best guess based on available data) is that we had GDP growth of 1.9%. So, if a recession is to occur, it would be in the future. I don’t even trust weatherpeople to tell me if it will actually rain today or not, so I don’t put much stock in any predictions about the future economy.
The June jobs report did drop this morning showing an addition of 372,000 jobs. While this is good news and shows a robust labor market, this is only one piece of a very complex economic puzzle that contributes to GDP growth/decline. The labor force participation rate is still far below pre-COVID times. Inflation is still growing at large rates, making all goods more expensive. So, even if more people are working they are likely not buying a significant number of more goods and services. Oil futures are coming down which also indicates an expectation of a slowing down on oil/gas demand. Even more, the FED is considering another 75 bp increase in interest rates this month, which will put more downward pressure on demand and GDP growth. VetSuccess also shows a 4% decline in visits year-over-year - which has been negative for most of the year. Needless to say, there is no telling what will happen.
—CN
Grab Bag
Stat: The worldwide veterinary diagnostic industry is expected to reach $5 Billion in the next 5 years. Talk about seeing a bright future ahead.
Embezzlement: In case you thought it was difficult to run a veterinary clinic, try dealing with a veterinary office manager who decided to embezzle over $200,000. Makes paying deserving staff even harder when money just disappears.
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