The private and public benefits of veterinary services

11 Nov 2022

There is ample evidence of significant financial concerns across the veterinary profession impacting the mental health of veterinarians and sustainability of the veterinary profession overall.

In order to find solutions and in the context of these signs of pressure being evident across the veterinary profession, the Australian Veterinary Association (AVA) is exploring these financial concerns, in addition to supporting veterinary mental wellness.

To better understand the contribution of the veterinary profession to animal health, welfare, and public health in Australia, the AVA engaged Marsden Jacob Associates (MJA), advisors in economics, public policy, markets and strategy who produced “The value of veterinarians to Australia: Public and private benefits”.

This report has provided information on the valuable role that the veterinary profession provides to animal health, welfare and public health and further clarification on who is benefitting: where private benefits are received directly by private animal owners and public benefits advantage the broader Australian community.

The report has acknowledged a wide range of public benefits generated by private veterinary services with discussion on the broad situations where market failure could occur.

The value of veterinarians

Veterinary professionals are highly regarded, trusted members of our community and mandatory state veterinary registration provides for the quality and breadth of veterinary services that are required to protect animal health and welfare and public health for which there is significant economic, human health, and social benefits.

Veterinary contribution is crucial to the social license afforded to animal use. The critical thinking and problem-solving skills developed and homed in an animal health context, coupled with their subject matter expertise make veterinarians essential for animal health and welfare. This value also extends beyond animal health given the interconnectedness of animal, human and environmental health.

The private veterinary profession provides some veterinary services for public benefit through being mandated by the government including veterinary registration (such as treatment obligations for pain and suffering). Also, there is often a public dimension or externality for community benefit as a result of the private veterinary service; for example, managing endemic parvovirus through high vaccination compliance.

Unfortunately, decades of public benefits provided by the private sector without adequate support is putting at risk the sustainability of the veterinary profession and, by extension, the public benefit that it provides for the community.

Public benefits and externalities

The report explored several key areas; where the delivery of private veterinary services are:

  1. adequately recouped through private fees.
  2. where services (public benefits) are needed to be provided to the public despite being underfunded, in order to meet the level of care expected by the community and required by the state.
  3. when private services create positive spillovers (externalities) which benefit the community but are unable to recompensed.

Animal welfare standards that are not recouped by fees or discounted

  • All registered veterinarians have treatment obligations to provide essential veterinary services for pain and suffering to achieve legislated animal welfare including disaster situations.
  • Private services are sometimes underpriced when there are issues of affordability to achieve animal welfare of private animals (discounting services for hardship).

Pro bono services to UNOWNED animals

  • All registered veterinarians have treatment obligations to provide essential veterinary services for pain and suffering to achieve legislated animal welfare.
  • Without government funding, the cost of maintaining animal welfare for animals without an owner is borne by veterinary businesses or individual veterinarians.
  • for example.. (ie strays or wildlife)

Private veterinary services that are not recouped by fees or discounted

  • High public compliance is required through no or low-cost services, creating conditions such that the value of the service is often not able to be fully compensated.

For example

  • Control of endemic disease from those private animal owners who vaccinate their animal
  • Control of populations from private animal owners who desex their animal
  • Accessibility of veterinary services to emergencies – The level of veterinary services used by pet owners who regularly visit a veterinarian underpins the geographic spread of veterinary premises. This then improves accessibility of services to pet owners in emergency situations, who do not regularly use veterinary services.

Biosecurity to avoid animal disease and loss of market access

  • Protection of animal and public health through mandatory biosecurity obligations such as passive surveillance, diagnostic and reporting obligations which may not be fully compensated.
  • Avoided cost of disease reduction.

Human health benefits

  • Protection of public health from zoonotic disease.
  • Impacts on human wellness benefits for public health budget.

Research and education to maintain Australian standards

  • Animal Ethics Committees require veterinary involvement, usually uncompensated.
  • Education: the essential requirement of extramural training and supervision of veterinary students relies on private veterinary practices which ordinarily are uncompensated.

Provision of government supported biosecurity services and animal welfare services

  • A small number of veterinarians work in government roles to assist in defined areas of ‘public good’ to advantage the greater Australian community, such as the environment, public health, safety, biosecurity, trade and industries.

Impacting veterinary sustainability

Commonly the provision of these public benefits relies on the good will of veterinarians.
Ultimately this can impact on the sustainability of individual veterinary businesses as it creates extra costs to the business that cannot be fully recouped through fees that can be charged. The additional workload also reduces the capacity of the business to undertake additional billable work as time and resource is taken with these unbillable services. This has consequences for veterinarians, other staff, infrastructure, education and the supports the veterinary profession requires to function. Ultimately, this also impacts the animals and community through reduced animal health and welfare and public health and impact on private invoices.

A key to reversing this trend is to improve financial viability by changing the business model to ensure all veterinary services that deliver public benefits are adequately funded for the delivery of those benefits. Without the ability to recoup the value of veterinary services, the private veterinary profession is vulnerable to market failure.

Next step- measurement

Now that we have completed our initial investigation into the broad contribution of the veterinary profession to Australia and the public benefit that flows from that, we need to measure this in more detail.

The next step is to determine where the veterinary profession’s financial losses are occurring and measure them.

What public benefits do we provide, how often, and how much does this cost the private veterinary profession?

We are currently identifying the gaps in our existing data on the financial value of the contribution that veterinary services provides to the society and economy.

This will allow us to consider how we can continue to care for animals and people whilst aiming to correct the financial stress occurring in the veterinary profession to impact the future health of veterinarians and the veterinary profession’s sustainability.

To help us in this, in 2023 the AVA will be conducting a broad survey of the profession to collect the data we need to more completely quantify the public benefit value provided by veterinary service in Australia. Once we have a better idea of where this contribution is being made and the value is each field, we can develop initiatives to drive a fairer share of the financial benefit into investing in the sustainability of veterinary practice.

Read the full Marsden Jacob Associates report here (Member only access).