Why economics are important for large animal veterinarians

On many veterinary faculties, the students receive some teaching in economics. Many times this is provided by an agricultural economist who does not speak the language of the veterinarians very well. Students are taught production economics (the basics of it) and the link between their veterinary profession and the economics is far away. Moreover, economics is not seen as a basic need for veterinarians, especially now more and more veterinarians are moving into companion medicine instead of large animal medicine. The rationale for the economics in the veterinary curriculum was lying in the fact that veterinarians should need a bit about the economics of their customers: the farmers. That is not needed when going for companion animal medicine. Herewith some of my thoughts on the need for large animal veterinarians to learn about economics (this blog is for a large part copied from my blog: animal-health-management.blogspot.com).

There are two reasons why economics are important for large animal veterinarians.

  1. Veterinarians do give advices to farmers on treatments, disease prevention, etc. Veterinarians are aiming at maximum animal health and do believe that their advice is the best for the farmer. And I do believe that farmers should be able to trust the veterinarians for that as well. However, the goal of a farmer is not to maximize animal health (at least in most cases not). Farmers also want to make a living, have constraints in time and money and the advice should take that into account (optimizing vs maximizing). Therefore some knowledge about the costs of their advice, vs the benefits in terms of improved animal health, but also improved income of the farmer is thus important.
  2. Veterinarians need to sell their products. For drugs that is easy: in most countries, vets are the only persons that are allowed to sell drugs. There is a tendency, however, that more and more of the income of farmers have to be earned by selling advices, for instance through veterinary herd health and management programs. In order to sell these “products”, the economic consequences (benefits) of these products need to be known. It has been shown that for Dutch farmers economic reasons are an important (but not only) reason for farmers to participate in a veterinary herd health and management program. For farmers not participating, economics were a very important reason not to participate.

Now, should veterinarians know everything about economics? No of course not. I think vets should be able to reason economically and to be able to critically interpret scientific and applied work from people such as myself so that they can support farmers and market their products.

Henk Hogeveen
Associate professor Animal Health Management


Henk Hogeveen’ s post is a very concise summary about what the animal health economics is about, I agree with his statements. I would just like to add a practical aspect to his points. In Hungary the farms can buy drugs from the distributors, retailers, as well, so smaller and smaller part of the food animal vets’ income stems from selling drugs to the farms. Amongst the large-scale holdings is a common practice now to issue calls for tender for drug procurement which often results in buying the cheapest medicines regardless their efficacy for the given problems. In most cases the person being responsible for compiling this tender has no any veterinary knowledge, just economic, management skills. However, if the drugs brought do not work properly, and the animal health problems are getting worse, thus, causing more economic losses, the vet will be the one who is responsible for this failure. In order to avoid this kind of problem the vets definitely need to be familiar with animal health economics so that they can communicate with, influence or even convince the farm managers, decision-makers about the drug procurement alternative seeming to be economically optimal.

László Ózsvári
Associate professor Animal Health Management

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