March Data Review:
What Just Happened?!
All the insanity around COVID-19 officially took hold of the veterinary industry in March. When we first started reporting daily stats for the industry on March 16th, it was the starting point of a federal recommendation advising people to stay home as much as possible in the coming weeks. It was also the starting point of a very long and challenging close to the month of March for the veterinary industry. Three of the four major key performance indicators saw a precipitous drop over the same days in the previous year, beginning around Monday, March 16th.
Change over prior year, by day
Revenue is the product of Transactions and Average Transaction Charge (ATC).
As we can see from the charts, ATC has remained relatively strong and growing over the prior year, while transactions have dramatically slipped. Transactional volume is to blame for the big slow down in revenue in March.
Below is a breakdown of revenue category performance for March 2020 compared to March 2019. The areas that got hit the hardest were boarding (-41%) and grooming (-16%). Only three revenue categories were in the black: pharmacy, dietary food sales, and imaging. Dietary food apparently took on a similar pattern as toilet paper due to clients stocking up on pet food before lockdown, driving up food sales as high as 18%.
Clinics need to be aware of gross margin erosion due to this large increase in dietary food sales which is not a strong gross margin contributor. Bills coming due in April, against likely slow revenue in April is a recipe for margin pressure. For complimentary iVET360 tools to help you track and manage the cost of goods (COGs), please click here.
Transactions can be thought of as volume of visits into the hospital, and that’s obviously where we’ve seen some major negative impacts.
Federal level guidance, state-level shelter-in-place protocols, and determinations of “essential services” have decimated the number of visits to clinics. Basic wellness visits and elective surgeries are being pushed off to later dates. The first chart shows Sundays having the largest variances to the previous year, which is likely the result of clinics closing on Sundays to cut costs, when in 2019 they may have been open.
Lower transaction levels and revenue means you will probably need less staff to support the slower times. Payroll is the biggest cost center in the business so it’s vital that you are adjusting staffing levels to reflect this. Be sure to check out our article on the best ways to reduce staffing costs and don’t hesitate to reach out to us if you need support with our free payroll tracking tool.
Average Transaction Charge is the average amount spent during a visit.
This metric has held pretty strong through a challenging March. With wellness visits down and some elective surgeries getting pushed back, we are seeing a more prominent position from urgent and emergency cases, allowing for ATC to remain strong. We see this demonstrated dramatically on Sundays, where ATC spikes compared to prior years. This is likely due to general practices closing on Sundays while emergency clinics remain open, augmenting ATC on Sunday.
Be sure to keep up with our daily stats on iVET360’s dedicated COVID-19 site to see how you are faring against the rest of the industry. We also invite you to take advantage of three complimentary months of our Pulse reporting platform so you can more easily and accurately monitor your business and navigate this difficult time.