Economics of animal health and economics of the veterinary practice

Within NEAT work package 4, last month, we had a meeting to discuss requirements for teaching in the field of Economics of animal health. I tell, that was quite an interesting meeting where with a number of key players in this field we tried to determine which topics were needed for the so called “day one” veterinarians (i.e., veterinarians at the moment of graduation). You will certainly hear more about the outcomes, because they form the basis of the development of teaching materials within NEAT.

Let’s be clear: we were talking about the field Economics of Animal Health. We belief that for every veterinarian a basic appreciation of the use of economics in diagnosis, treatment and prevention of animal diseases is necessary.

It was interesting, though, that throughout our discussions, items from the field of Economics of Animal Health were intermingled with items from the field of Economics of the Veterinary Practice. So there comes the idea for this blog and the message is: there is a clear difference between the Economics of Animal Health and Economics for the Veterinary Practice.

The first field is needed to support decisions of animal owners or others responsible for animals: what are the Economic consequences of a disease, what is the value of diagnosis, of treatment or of prevention? This field requires knowledge from both economics as well as animal diseases.

The field of Economics of the Veterinary Practice is aimed at supporting owners of veterinary practices. This field is basically business economics, specifically for veterinary practices. It involves the calculation of cost prices of products and services, it requires knowledge about book keeping and investment analysis.

Some of the elements in both fields overlap. Items such as opportunity costs, depreciation and marginal analyses are used in both fields. Our veterinary students need especially teaching in the field of economics of animal health. However, some knowledge on the reason why the tariff for a consult (expressed in amount of money per hour) is much more than his or her salary comes in handy. Otherwise economics of the veterinary practise is typically an elective course and economics of animal health should be a mandatory part of the veterinary curriculum.

Best regards,

Henk

Comments

Henk raises an interesting point about the disparity of animal health economics and the economics of veterinary practice.  As someone with an interest in business, I offer an alternative view to the bilateral relationship that Henk proposes.  I approach my argument in two parts: first, that animal health economics and the economics of veterinary practice fall under the same umbrella and second, that economics is a small, but essential, part of understanding the veterinary practice as a business.
 
I was comforted to see the statement that “Some of the elements in both fields overlap” although I would differ with the sentence’s opening word: some.  Whether we’re considering an outbreak of avian influenza in a poultry flock or diagnosing a case of canine parvovirus, are the questions not the same?  As Henk puts them: what are the economic consequences of a disease, what is the value of diagnosis, of treatment or of prevention?  Aside from the different emotional attachment to a pet, to me, this is nothing more than a matter of scale: 300 turkeys or one greyhound.  The decisions are the same.
 
In terms of veterinary practice economics, I think that running a veterinary practice (“calculation of cost prices of products and services, it requires knowledge about book keeping and investment analysis”) goes far beyond mere economics.  Even in the single quotation provide in my previous sentence, there are elements of marketing and operations management.  I’m concerned that there is an over-simplification of the softer needs of the veterinary business as it is not an inanimate object, it is a living, breathing, changing entity that is highly responsive to attitudes and decisions of its stakeholders.  To add complexity to the argument, these stakeholders (be they owners, staff, clients, suppliers or government regulators) have increasing demands which this entity must a) be cognisant of and b) be capable of providing a response.  For example, staff may want new facilities such as a new lunch room or gymnasium or perhaps a different roster system, clients may be demanding new communications strategies (e.g. on-line booking, tweets), owners may see the need for new high-cost equipment, government regulators may demand higher animal welfare standards than ever before or higher business tax rates.  There are human resources (including leadership) to consider, the psychology of the vet-patient-client triad, the marketing of the veterinary practice, the financial management of the veterinary practice and, above all, the business strategy of the practice which paves the way for the business’ future direction (need I use the cliché of the cargo ship setting sail into unchartered waters?).  Fair enough, I concede that this is all about the allocation of scarce resources but it is infinitely more complicated than book keeping and investment analysis.
 
With all of this in mind, I agree with Henk that animal health economics must be a mandatory part of any veterinary curriculum, and I would add that  too should key aspects of business management.
 
Best wishes,
Liz

 

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