Factors Influencing Pricing in Extortionate Veterinary Care – Who disagrees?


Many studies measure determinants of success and survival across different types of private and government-based veterinary services, but none with factors that can influence the changes in prices.

Not for the market concentration, not for the market share of the main firms in the main market, and either including that last variable or not, not for the economy and industry level. We present a new and relevant methodological and economic research problem regarding veterinary services.

Our project demonstrates very preliminary evidence about the size of the economic effects of variables forgetting in the most cited international veterinary papers. In this study, we claim that the determinants of the prices charged for accredited veterinarians are yet unknown.

Only six studies were performed using a subset of six of the 24 values found as relevant in other services and markets.

Significance of Veterinary Care

For many people, pets are closer than relatives, hence unforeseen costs for treating a pet should not stand in the way of recovery. People are ready to devote their time and financial resources, but developing medical technologies require more resources as well. Also, new services are available which didn’t even exist three years ago.

On the positive side, the choice and availability of services has come to serve owners’ interests because terms of recovery shorten and pets maintain the quality of their life. On the negative side, owners of pets tend to spend more money than before, and prices for services are heading for rapid growth.

Veterinary medicine is currently one of the most dynamically developing fields in Latvia, and hence veterinary care is both a relevant and important issue.

Mainly three aspects are significant and should be explored deeper due to the specific character and nature of veterinary care: humanization of pets, growth of the pet population, and wider choice of health care services. All of these aspects significantly influence the pricing aspects of veterinary care.

An Analysis of Veterinary Pricing

The introduction of pet insurance may become a catalyst for expanded services, but its success is also dependent on being accepted by veterinary service providers. These and other fundamental factors are affected by price.

In researching the concept of veterinary pricing, a set of parameters – consisting of a consumer growth model, a supply and demand model, and the theory of value added – were applied. These parameters provided a theoretical foundation for a pricing model that considered price to be a result of the extensiveness, quality, and distribution of veterinary care provided.

The model was designed to accommodate analysis of evolving new technologies in veterinary practice and allowed for the identification of pricing inefficiencies and searches for solutions to those inefficiencies.

The objective of this study was to develop a theoretical model that could be tested to determine what factors influence the price of veterinary care. Veterinarians need information to understand the demand for their services, particularly since overall demand for animal care – be it health, welfare, or sentimental – is inelastic. Costs are rising, and service is being compromised. Although there is now an availability of technology in diagnostics, surgery, and treatment options, many pet owners are still unaware of the extent of the technology that is available.

Market research has shown that pet owners spend, on average, about 1% of their annual income on veterinary services. As a means of comparison, livestock commodities represent 46% of the agriculture industry, yet contribute £60.6 billion to the national economy.

Domestic pets receive approximately 50% of the veterinary attention provided, but the remainder of the 10% contribution by the animal sector to the total economy comes from the care provided to livestock. The total number of veterinarians engaged in the care of all animal species is a pool from which pet owners draw services that are essentially priced by species rather than by medical care delivered.

Veterinary care for pets has seen substantial advancements in knowledge and technology. Pet owners now have a greater range of treatment options, an increased level of service, and a drain on their discretionary spending that is just as heavy as that on their own health care.

Veterinarians are challenged with the business of adapting new technology and treatments to the marketplace while dealing with the price sensitivity of their customers.

Purpose of the Study

Just like services from other professions, veterinary services are credence goods, which leads to a conflict of interest between the professional and the client. Quality discretion leaves clients with no verifiable proof that the service level received matches the cost. Professional revenues depend on client trust in the price-cost relationship. Furthermore, asymmetric information between the professional and the client is likely to widen the gap between the actual and perceived level of quality. Understanding how prices are developed is the first step in understanding this potential conflict within a veterinary hospital.

While a cost-based understanding of these prices through examining the underlying factors is crucial, it is not the only vital aspect of this association. Once a stronger understanding of how prices are set becomes clear, this information can also be useful in determining how these prices can be managed.

The purpose of this study is to identify factors that are associated with the prices of common veterinary procedures. By examining these procedural fees, the resulting analysis can provide an inside look at how veterinary hospitals structure their prices and provide important information for those clients who are consumers of veterinary services.

It also provides insight into the push-pull dynamic of service output provision in a professional service sector. The altruistic benefits that are derived from producing service outputs in a veterinary hospital are potentially offset by the specialized knowledge and professional expertise that the hospital possesses.


Previous research has been unable to disentangle the impact of veterinary practice standards and location from other practice-specific factors. Many studies have focused on whether non-veterinarian owned providers charge less for veterinary services and if restrictions such as veterinary practice acts prevent competition from such providers.

These practices may provide price floors to small animal veterinarians, keeping consumer prices high. To put some perspective on the scope of the frequent symptoms described in veterinary hospital records, there have been multiple diagnostic studies to attribute specific reasons for visits for companion animals with some striking results. As an example, one survey of 35 veterinary clinics covering 1977 to 1979 estimated that over 2% of all visits were ear problems related.

Veterinarians have a highly demanding profession, both in terms of volume of patients seen in a day and the expertise required to treat these patients.

The field of veterinary medicine is “relatively more diverse and broader” than medicine. Students at veterinary colleges are not required to specialize. Upon graduation, they possess knowledge of surgery, dentistry, internal medicine, dermatology, radiology, as well as a moderate amount of experience with all animal species, from small companion animals to large herd animals.

Additionally, the range for factors that may influence service pricing can vary dramatically between veterinarians by practitioner type, even between small animal practitioners.


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