Profitability of rural practice

Abstract

There is a crisis in rural veterinary medicine as rural practitio­ners face challenges in different business environments. Rural veterinary practices are complex organizational systems with economic and demographic challenges directly associated with various causal conditions which affect practice profitability and efficiency. Supported by a grant from the U.S. Department of Agriculture, data was collected from 16 mixed rural veteri­nary practices in the southeastern United States over 4 years. A 3-year financial analysis found profits and owners’ compen­sation of 20.3% of gross revenues, cost of goods sold (COGS) of 37.8% of gross revenues, practice and doctor averages cli­ent transactions of $102 and $117, respectively. Population and income averages within 40 miles of the practice were 452,939 people with household incomes of $67,780. Compared to the averaged Well-Managed Practice Benchmarks 2019, American Animal Hospital Association 2019, and American Veterinary Medical Association 2017 data, potential causal conditions chal­lenges for rural practices limiting profitability are COGS, clini­cal revenue production, and clinical work efficiency.