Equine Practice Profitability in Challenging Times

Welcome to Practice Life, a podcast devoted to the important non-clinical issues affecting the daily practice of equine veterinary medicine.

Practice Life is brought to you by the American Association of Equine Practitioners. I'm Travis Boston, a practice owner and a veterinarian, and a longtime AAP member, and your co-host. And I'm Jessica Dunbar, practice owner and veterinarian, and a longtime AAP member and your co-host. Berringer Ingelheim knows that transforming the future of equine medicine is essential to sustaining healthy equine practices.

Through The Stable Life, our veterinary wellness initiative, we dedicate professional resources and real-world support to empower veterinarians and their teams to thrive both personally and professionally. Talk to your Berringer Ingelheim representative for information on upcoming webinars, round table discussions and presentations to help find the balance to live and work your best.

Hello and welcome to another episode of the AEP's The Practice Life podcast with myself, Travis Boston, who is hosting this with my co-host, Jessica Dunbar. How are you? I'm doing great, Travis. Nice to join you for this discussion today. Before we get started today with the meat of our podcast, we do want it. As always, take this opportunity to say thank you to our sponsor,

Boehringer Engelheim, for sponsoring this podcast. We appreciate them giving back and allowing us this outlet to provide perspective on the equine veterinary world.

This one is near and dear to my heart. We are going to talk about practice profitability and also somewhat about the economic climates of the past few years and going forward into the unknown future. And we wanted to get lots of different perspectives on this. Jessica and I are both partners at Group Practices, and we would love to give you our perspective, But we wanted to hear from the different segments of the AAP population, and a lot of those are not group practice.

So we have two guests today, Dr. Amy Daly and Dr. Julia Peterson. And I'm going to have you start, Amy, if you could tell us a little bit about yourself, where you're from, went to school. Thanks for having us. I went to Colorado State University. I'm from Colorado. Went out to California for my undergrad, came back to CSU, did the MBA-DVM combined program there at CSU.

After that, went to Australia, practiced down there for three years, and then moved back to the western slope of Colorado, where I've been practicing group practice, and then most recently went out on my own solo practice. I've been practicing solo for just over four years now in Western Colorado. You're in some beautiful country there. So now let's go to Dr. Julia Peterson. Tell us about yourself. Hello. Thank you for allowing us to join you guys today.

So a little history on me would be I did vet school also, ironically. CSU, I did undergrad at Texas A&M and then spent a little time writing courses. I went to Europe, kind of came back, competed, rode professionally, that kind of thing, for a short period of time, then realized I loved taking care of them far more than I did riding them. So I ended up going to vet school at CSU, did also the combined MBA-DVM program.

After that, I did internship, a smaller sports medicine practice in Virginia, then from there went to a bigger group practice in New Jersey and Florida, spent some time there. Then realized I needed to come to the West Coast to be closer to family. So now I've been at a much smaller, technically now corporate-owned practice where we're strictly ambulatory. We do mostly sports medicine. So now I'm in a three associate plus an intern practice and have been here for

about four years now. So it's been an interesting journey. So glad to have your perspective. And then Travis, just so we can all be kind of in the loop here, can you just remind us a little bit about your practice? Absolutely. So I am in a group practice. We have four veterinarians, two associates, and two co-owners. We are primarily ambulatory, but we do have a haul-in facility, which is something that I definitely want to get into later.

Changes the game a little bit where profitability is concerned for good and for bad. I would just like to thank both our guests for keeping Jessica's dream of having every podcast having as many Colorado connections as possible alive for yet another podcast. But let's be honest, you came up with Julia here and I did come up with Amy. And just for any listeners out there, we'd love to have guests from all over the country. So just reach out to Travis and I.

Absolutely. We are running out of Colorado. That's at a fantastic rate. It's possible. To get a little bit more into our business, we are an LLC electing as an S-Corp for tax purposes. I am also a partner in the holding company that owns the land and the business that oversees the tenants in the building. it's been a lot of learning. And I think one of the points that I want to make very early in this podcast is that most vets are terrible, terrible business people.

And I think that we are almost taught to be bad business people because it's almost makes you feel guilty and like a bad person that you want your business to thrive and survive when our mission is to help as many animals as we can. But I'd also remind everybody that unless your business survives and to some extent thrives, you're not going to be there to help the animals.

We are trying to provide a lot of different perspectives, group practice, regular vets, and MBA, corporate practice, because all of those things are things that are going to. Be represented going forward. Corporate practice is definitely on the rise, particularly in small animal. But as we see from Julie, it's trickling into equine as well.

And it is here to stay. It's not going away. And if we don't choose to make the money and get better at being better at the business of practice, somebody will certainly do it for us and take the money away from us, the people that are here to help the horse, but also turn a profit and have a decent living doing it.

All right. So let's talk about post-COVID economic climate and each of your personal experiences with this big boom we had in most segments of equine veterinary business world, as well as small animal. So let's go back to Amy. And you said you've been solo for about four years. So this is a COVID move, right? How were things for you transitioning to solo practice right during COVID? Yeah, it's kind of right during or like the spring after it first hit.

So that boom, it was busy. I just, yeah, hit the ground running. And it was like, I bet you did. Suddenly, you know, I thought I was going to be slowing down and doing a bit more part-time and suddenly it was just like full more than full-time probably and more than I thought it was going to be even the next year was even more than that you know it kind of grew and grew and I thought oh my gosh I'm can I keep up I have to stop taking new clients like this is.

I definitely felt that, I think, during that immediate post-COVID. It's kind of hard because for me, it was a whole new practice. So it's not like I was going along and had the years before to compare necessarily. But there was not a problem, certainly, finding enough work to keep me busy. Good. Well, I'm sure it was probably hard to find balance in that period of time.

Same for the practice I'm part of. It was quite busy. Let's shift over to Julia and tell us about your time with your practice immediately post-COVID in that boom. Mine was also kind of similar, but I was right in the end of my internship, kind of beginning of a potential job search and fellowship or weird transition phase. So I had just gotten back from Florida when officially all the COVID shutdowns happened. So we basically just

kept going. I mean, for us, we just wore masks and we just kept going. And then I think the hardest part at that time was to try to find another job because everybody was truly in this panic stage of we didn't know what was happening. So nobody was hiring. Everybody that was hiring immediately just like froze all their assets and panicked and bought toilet paper. And that was about it.

So it took me a minute to like figure out so I ended up actually staying at my internship for longer and did like a partial fellowship until I switched practices once we figured that out because I'm very sport horse performance horse based even at that time we just did almost solely sport horses so we worked around the brief period where there were no horse shows once people got over that and figured out we can still ride and still compete then it was

this huge influx of everybody moving out of the city, into the country, thinking horses was a great opportunity of how to spend their time and their money. And then the horse shows went from panic shutdown for just a couple of months to like this huge explosion of everyone just kept going. Honestly, since the end of 2020, everything just has blossomed since then. And even since I've moved to California, that definitely I can echo that.

I moved to California in 2021. and originally traffic wasn't bad and we could still get to places and we were busy even at the time where my mentor who's now since retired who started the current practice where I am now we just watched it blossom, We have doubled in staff. We have doubled in caseload. It's been crazy. That's wonderful. Would you feel comfortable, Julia, sharing which corporation you're part of? I'm a part of one of the 26, I believe, MBA practices. Okay, cool.

That exists currently. Julia, do you have a feel for how the larger group of MBA practices are doing as well in that immediate post-COVID phase? Are they all kind of having that similar feel that you had described for your own practice? Hard to speak to all of them, of course, because there's some smaller, some larger, some very large, essentially group practices. But I think for the most part, yes, most of them have done really well.

I think the ones with a much larger facility, so essentially a much larger overhead, have definitely struggled a little bit more, just even from a staffing perspective, just because everyone went different directions and people were making huge life choices. I feel like COVID brought, you know, just how it was a little bit for AB. I think the huge choices were being made at that time. That definitely affected some of the bigger practices.

But I think for the most part, all of them have done quite well post-COVID, which has been kind of fun to watch. Yeah, cool. Travis, do you have any other comments on just from your own practice? What I would like to communicate most of all is that when there's a business boom, it allows us to do things we wouldn't normally. You know, before COVID, we were just sort of a little more haphazard. After COVID, there's been such a demand that we were able to create better boundaries for ourselves.

We were able to be more selective about the clients and the cases that we take on versus the ones that were like, wow, that doesn't sound like a great idea. We struggled to hire. I would agree with that, both from a vet and a staffing perspective. But at the same time, we did very well. We were highly profitable because we could just raise prices as much as we wanted. And nobody really complained or pushed back.

One of the things we're going to get into in a little bit is the changes that happen when that's not the situation. But if anybody has anything else to add about what they were able to do and how they were able to shape the practice they were at during the boom and the positive or negative things that came from it, I'd like to give everybody an opportunity to talk to that. Amy, do you have anything to add on that? I can be selective, which is nice. That's good.

And Julia, what about you? Do you have anything to add? I think I would just echo what Travis said. I do think it finally gave us the opportunity to raise the prices and being more selective and essentially being able to actually, from a more business standpoint, force clients to pay their bills and with a little bit less guilt, I guess, would be the right word.

Because Small Animal, if you compare us to Small Animal, their prices are just astronomical even to this day where some of the inventory, some of the products, services, things that they sell and just the expectations that Small Animal has compared to us, it finally gave us the opportunity not even to be the same but at least remotely increase the prices where we're not doing things for free anymore and force people to maybe acknowledge us as true professionals and maybe appreciate our

skill set and our time a little bit more. I don't think we're anywhere near there yet. We're at least trending in the right direction. And I think that follows with everything from paying our veterinarians more, paying our staff better. To actually being able to raise some of our prices for services, etc. I do think that started that trend a little bit, which is kind of great to see, finally.

I think so, too. Absolutely. And that's really why we're here today, because if your practices are anything like my practice and also what I've heard sort of through the grapevine from some vets that are solo and some vets that are associated with organizations like BMG, is that a few months ago, that trend started for the first time since COVID, the post-COVID era, to reverse itself. Some degree of declining gross revenue and a little bit of.

Decrease in the willingness of some owners to pay for things that formerly had just been sort of rubber stamped. Have you guys seen yet in your practices any change in the economic climate, the boom that we've had for so long? Is that slowing, stopping, coming to an end? Where are you guys? I think so a little bit. I guess I have kind of that feeling, And I don't know if it's just part of it is the overall economic in terms of revenues. We're just in this year and to compare is kind of hard.

I feel like I got really busy earlier than I normally do. And I think that's just our weather in Colorado. But I do have a feeling that it's slowing a bit. I'm mostly ambulatory. I do have a haul in that I can have people. I don't own it, but people can haul in. but I'm mostly ambulatory. And so I refer to our local referral and other referral hospitals.

I feel that even in the past several months, there have been people opting not to refer for financial reasons and saying, do what you can here, and that's going to be it. There's always been a bit of that where I am in a rural community. I have a very broad and varied case load and clients from those near Aspen, where the budget is nearly limitless to those who just 50 miles away, it's an entirely different economic situation.

So there's always a bit of that, but I have the feeling that that's, and maybe that's again, shadowed by what I know in the rest of the economic world to be happening. And I'm just projecting that. Julia, how about you? Are you seeing anything similar? I agree. I do think I'm seeing a little bit similar. It was a little bit last fall things started to slow just a little bit.

In California, we don't have a true low dead season because we are climate-wise very fortunate. it. I will say for us, November, December holiday season is always a little slower. And I felt like it was a little bit slower in general this past year. I think for us, the biggest hit was actually February this year. And I think that was not to be political, but I do think it was politically. Correlated, especially in my very weird demographic that I have.

I have a very fortunate area. I'm in Valley. So my average client is a little above what most people probably have, which is both a blessing and a curse. But not to say that people that have, plenty of money are willing to spend it always on their horses. Some yes, some no. I found everybody hesitating, like truly beginning of the year with the election. Again, I have no intention to get political here, but I do think that affected things.

I definitely found people asking for estimates, which typically I have to provide very few. They're more like, you know, do what you need to do for these horses. And again, my caseload is very focused on sport horses and show horses, less backyard horses. So normally I have a very fortunate, limitless budget. And I found even those people hesitating. So especially in February, we had the lowest revenue that we've had in the four years I've been here just for that particular month.

And then it has rebounded a little bit. People figured out what tariffs meant and whether that was going to affect them or not. But it's been weird. It kind of, we slowed in the fall and then had this weird, everyone froze in February and slowly rebounding again, but we'll see how this year goes. Yeah, and I'll speak for our practice as well, but we've definitely seen it

get a little flatter in the last kind of six to 12 months. So I think that's mirroring everybody else's experience as well, at least this group on this recording today. That seems to be everyone's experience, and that's why we're trying to draw different perspectives here. There is a huge dichotomy in the horse world, I think I really would agree between sort of the upper echelons where money is kind of play money and then the regular people that own horses.

When you look at the equine industry in general. We, for many years, have believed that every horse deserves a vet, every horse owner deserves the opportunity to become a client, and that is not the case in small animal. There's a lot more resources for lower-income people. I read a study at one point that almost 80% of small animals do not see a vet on a regular annual basis.

I don't know if we have similar data for horses, but we're obviously going to come into a period of time where there's going to be some separation and there's going to be more of a strain on the lower end, but the higher end people don't like to lose money either. They are good at holding on to what they have. This is going to be a continuing trend. There have been some positives that are coming out of this. We were hiring for a veterinarian for almost two years.

Not only did we wind up hiring two recently, but I got seven good resumes and And I was reached out to twice after our hiring search was over by people that had seen our ad that had since been taken down. Well, that's not great news for our new graduates. It's great news for practices that are looking for a veterinarian, looking to expand, maybe looking to slow down a little bit from the hubbub. So there are going to be a lot of things that change in both a negative and a positive way.

Have you guys seen any positive changes from the slowdown other than your mental health and relaxation? Can I just chime in here? One change is we're kind of forced into increasing our efficiencies, just be as efficient as we can. And then your comment on the labor market. I think it's better, like you just mentioned, Travis. But can I comment on support staff as well? We've been able to find people to hire, but it's a little more challenging due to all the inflation.

We have to pay a little more, which makes sense. I agree totally with you, Jessica. I think we've definitely, from a veterinarian standpoint, we struggled very much. This was before I took over my managing veterinary position. Like originally, so this was about four years ago, we couldn't find anybody. There was not a veterinarian to find. And really, in the last couple of years, we've actually had some pretty good applicants, which is exciting to see.

And now we're in a very happy place with three doctors and potentially gross to four. And we have a good pool of wonderful interns. Our current one is going to go off to do a residency after this. So I think that shifted drastically. I think we're still struggling from a support staff. And that might just be slightly my demographic of it's very expensive to live where I live.

And so we are very much forced to pay, which is fine because honestly, we have great people and they earn it and they very much deserve it. But we have to pay very well, especially in the generation that we're shifting to, which they want the four-day work weeks. They want good pay, but they also want that work-life balance. They don't want to continue to work 60 hours a week. They don't want that. So we're trying to figure out how to hire for that.

And that's been a little bit of a struggle. But the people we get have been very, very good. So it's been interesting. I'm going to call that a positive change for all of us.

The shift from the 60-hour workweek. Working on it. Sure. Any input, Amy, from you? This time of year, it's like an 80-hour workweek. I did recently hire, bring on a full-time support staff, and I was talking to a vet who was maybe going to come on. It's good to hear there are vets out there to hire because I know there weren't. And the numbers you hear coming out of school for new grads, pretty bleak for equine and large animal practitioners.

And I did bring on full-time support and that's been helpful from a work life. She actually worked with me a couple days a week for a few years. So I'm very fortunate there and she would work 70 hours a week if I wanted to or to happily. I'm happy for you, Amy. This is not the norm. I totally understand, but hopefully it'll be better, better balanced. So let's talk about the challenges and opportunities that this flattening out post-COVID can create for equine practice. So let's go to Julia.

What challenges or opportunities are you seeing with this flattening out? To kind of a little bit go back to what you're saying about efficiencies, Jessica, I think that very much forces us to do that in kind of a couple ways. And I think ultimately it's a positive thing. I think for us and, Being also corporate-owned, we're now a little bit forced to do that as well because I'm forced to think about the business side of things, which is fine and I enjoy it and I have an MBA because of it.

It forces us to think about things that all of us hate, like AR. Like inventory, like staffing, all of those things that are very expensive but very important. We have very much shifted our inventory a little bit to be more closely run, especially with as things continue to shift with that younger generation of everything's online and everyone buys everything from Amazon and Tui and FarmBet that we don't stock what we used to stock from that perspective.

And corporate's kind of a little bit forced that upon us, but I don't actually think that's a bad thing. So I think that's going to be a huge positive of being a little bit more careful of what our cogs are essentially, what all of the costs and staffing. It's okay to pay your people more. It's okay to pay them overtime, which is kind of a thing that none of us wanted to do. And at least I've always been told, don't have your techs have overtime.

If we are working seasonally those long hours, it's well worth it. Keep your staff happy, keep them motivated, keep them paid, keep them having whatever they need to keep them happy. Is that four-day work week? Is that a particular schedule? That, for my own personal growth, from a managing DVM perspective, a huge shift of trying to figure out what this generation wants.

And that goes to veterinarians, I think, as much managing those efficiencies and trying to make that to be a positive change for us as a practice and for probably all of us, has been a struggle, but a growth. I would like to say that an educational experience as we're getting better at it. I think it's a good struggle. And then, Amy, do you have anything to add? I mean, I echo that.

I think keeping our costs low and figuring out, right, how to make more of less, if there's less coming in, how do we. Be more efficient and talking about staffing and all of that.

There are some AI tools coming out that are really powerful now, as far as maybe helping make us more efficient with our time, medical records, maybe being able to streamline some of the processes that we have to do every day. Like for me, getting my billing done and my paperwork, because I spend all the time doing the doctor things. And then I also have to get invoicing ready so that my person can send them and all those things.

So how can we use some of these new tools that again, like most of us, bets are not great with technology. We have our systems and that works, but I think there are some really, really crazy, powerful things coming that are already available if we learn how to use them to make us more efficient with our time and hopefully cut out some of those costs and allow us to put the money that's coming in to keep good staff and keep ourselves. Satisfied and making money.

I'm really glad you brought up the technology piece. I have definitely some co-workers, perhaps they're younger than me, that are really enjoying some of those applications for help with medical records and so forth. So more to come on that. Travis, have anything to add here? We need to start to look at some of the struggles we've had with paying associates. And we've been, for years, we've been like, you know, hey, we need to catch up to a small animal. And we do.

We absolutely do. That's a drama I've been beating for a long time. But I think I'm interested to see how an economic slowdown will affect associate compensation in small animal and how that trickles down to equine because corporations are made to make a profit. And if they're not making a profit, they will change how they operate and how they employ people.

Most recently, we saw the closure of a chain of emergency or urgent care clinics owned by Mars and all those vets, all that staff out of work. Does this mean that there are more vets available to equine? Do you stay in equine because the jump isn't as big? That's an interesting thing for me to look at going forward. Do we have more people stick around and doing something they love because the

economic gap is not as wide? not just because we're pushing the floor up in equine, but because the ceiling's coming down in small animals. And then the other part of that is one of the things we've seen over the past five years is the rise of the relief practitioner. Relief practitioners have been charging, according to some of the groups I'm in, absolutely outrageous rates in the small animal world. And we have very limited experience with relief practitioners in the equine

world, but they do exist. How are these folks going to be affected moving forward? Are we going to continue to utilize them in a harsher economic climate? I'm really interested to see what happens with that. And I think potentially you might see a transition from some of those people doing more relief to becoming associates because the relief market is not as good. The other thing that I want to sort of get back to is what Amy said, and that's where we have efficiency in the haul.

And I think that is really the future of equine medicine. I've been saying that for a while. We need to put the onus back on the owner that they need to, if they want urgent care or if they want care for less money, they need to be able to bring the horse to us. The travel time is a killer economically. It will not get any better. We will not build faster cars or aero horse ambulances that we buy in the near future. We're going to need the owners to come to us.

And the economic change may make practitioners a little more desperate to go out and do stuff, but it may also make people more cognizant of the fact that going out and doing stuff isn't actually making more profit. You need to bring owners to you to do that. And I'm excited to see if that happens or not. I know that's definitely one of your soapboxes, and I think it's an important one to consider.

We've sort of touched on some of this, but I'd like to just go around the virtual room here and everybody, what one tip? If you could talk to either a newer grad or a newer practice owner or somebody that's encountering a different economic climate for the first time, What one thing would you say practically, you need to be doing this to weather a recession or an economic storm or a little bump in the road or whatever's happening right now? What one thing, what one nugget can they take away?

That's a very big question, Travis. Mostly to answer that, I think what I would tell a younger practitioner would be just be patient. Everything will, honestly, it really will work out. I think the patience and the tenacity of the industry and the field that we're in, everything, whether it's financially or with a difficult client or as a staff member, things do always work out.

We're quick to, I don't know, quick to second guess ourselves, quick to worry about whether things are going to work out financially. Know that there will be waves, there will be highs and lows. I'm sure Amy has experienced them as well, shifting to solo. And just to be okay with that, not to second guess, not panic. And that it will work out and things do get better as you get more experience. You'll still question yourself. I do all the time. It gets to be a little bit more tolerable.

Patience. I think that's a struggle I personally have. I don't know if anyone else does, but I certainly do in every capacity. This is really good advice. Thank you for saying it to Julia. Absolutely. And it can be applied to veterinary or financial. It's tough to not panic and flail around doing a million different things when the first thing isn't working, whether it's, again, economic or veterinary. Amy, what's your nugget of wisdom?

Take care of the people who are coming to you and who are your base, foundational people. Do the best medicine you can for them. If you have a good solid base and then you do what Julia says and you have patience, that grows. People appreciate that. I mean, at the end of the day, we're still in a service industry. We're taking care of people and their pets or their performance animals or whatever they are.

And if you just take care of those people in the hard times, then that will come back to you when things change and it gets good again. Can I just echo what you just said, Amy? Because when I was thinking about this question earlier, I wrote down and starred one thing. And you said, take care of these clients. And I wrote, deliver good service from good communication to good medicine, deliver good service. And I feel like everything else kind of falls into place.

Travis, what's your practice tip? Mine would sort of be something I said earlier, and that is that what we can't do, and this maybe goes back to what Julia said, what we can't do is to try to revert. We can't go back to undercutting free exams, giving away pharmacy revenue in order to acquire different positives in the practice. We've got to realize that a dollar in and a dollar out doesn't make a profitable business.

We've got to stay the course a little bit and not just try to become the lowest common denominator, try to get every dollar out there that then maybe we don't get to keep any of. We've got to continue to act in everyone's best interest, the animal, the client, but also ourselves. That's how we keep taking care of our patients. Thank you, everybody, for being here today.

And it's great to talk about what each of us are going through with this flattening time frame in the past months or, you know, six to 12 months. But I guess for me, my takeaway is be patient, provide good medicine. That's been a good theme of today. And we'll see where the economic world goes. I don't know if this is going to be a recession we're in for several years. I don't know if this is going to all turn around tomorrow. I agree with Julie.

A lot of it seems very politically motivated right now, whether that's something that's here to stay or whether that's something that's just a little bump in the road and we'll be going gangbusters in three to six months. I don't know. So, but hopefully everyone out there has gotten some good advice from everyone in here and we'll try to do the best we can to keep on keeping on. Yep. And thank you, as always, for Behringer Ingelheim's support for this podcast. We appreciate you.

And one last thank you to Amy and Julia. Thank you both for being here and providing your perspectives. The AAP is made up of a lot of different parts and options and how economics and veterinary world works is all very different for all the different little corners that we have. So thank you very much for being here. For more resources to help you in daily practice, please visit the AAP's website at aaep.org.

Berringer Ingelheim knows that transforming the future of equine medicine is essential to sustaining healthy equine practices. Through The Stable Life, our veterinary wellness initiative, we dedicate professional resources and real-world support to empower veterinarians and their teams to thrive both personally and professionally.

Talk to your Berringer Ingelheim representative for information on upcoming webinars, roundtable discussions, and presentations to help find the balance to live and work.