Veterinary services prices

Our Key Findings

• Inflation for veterinary and other pet related services has outstripped overall inflation over the past two years. It remained very high at 10.7% in February 2024, even as overall inflation dropped to 3.8%.
• Analysis of prices of annual booster injections (the only service for which data is available) shows that these have increased more steeply over the past two years compared to private health services for humans.
• Annual booster injection prices have also become much more dispersed since the Covid-19 pandemic, ranging from as low as £23 to a high of £107 in February 2024.

Einführung

The veterinary care sector has come under considerable scrutiny in recent months. The CMA’s recently concluded review of the sector raised various concerns that it might not be working in the best interests of pet owners, and as a result the CMA is now proposing to conduct a more extensive market investigation. 

Our own research with pet owners identified a number of potential problems in the market around pricing transparency, unclear corporate ownership of practices, concerns about over-treatment and a lack of shopping around for medications. 

Our research also found that pet owners overwhelmingly view veterinary services as expensive. 73% of pet owners said that vet consultations are expensive or very expensive, whilst 82% said that vet treatments and medications are expensive. There is some evidence that prices have risen rapidly, with The Association of British Insurers reporting that the average cost of a pet insurance claim increased 17.6% between 2015 and 2021 (from £721 to £848), but in general the lack of transparency of prices makes it hard to investigate.

In this article, we use data collected by the ONS to calculate inflation to explore how prices for veterinary services have changed in recent years. We look at rises in veterinary prices compared to overall inflation and prices for private health care services for humans, and we use the ONS price quote dataset to explore how price dispersion (i.e. the difference between prices charged by different practices) is changing over time for annual booster injections.

Prices for veterinary services have risen faster than inflation in recent years, CPIH inflation peaked at 9.6% in October 2022 and has since fallen back to 3.8% in February 2024. Although the overall inflation rate is falling, the inflation rate has remained high for some products and services. For veterinary and other services for pets, inflation peaked at 13.1% in June 2023 and was still 10.7% in February 2024.

 Figure 1: Inflation for veterinary and other services for pets remains very high as overall inflation falls

There are a number of factors that may be contributing to increasing veterinary prices. Demand has increased with increased pet ownership since the Covid-19 pandemic, whilst the number of new veterinary surgeons in the UK has been declining. The sector has also experienced a rapid consolidation in the past decade, with independent vets accounting for 89% of the industry in 2013 compared to only 45% in 2021. The CMA is concerned that high levels of concentration in local markets could be causing weak competition, which might partially explain the sustained high inflation.

If some local markets are less competitive than others it may mean that some firms are able to charge more than others for the same service. In theory, if prices for the same service are becoming more dispersed, this could indicate that some firms have higher margins. To explore this we use the underlying price quote data the ONS collects to measure inflation to explore how prices in this industry have changed over time. This data is released on a monthly basis for a sample of retailers, and so allows analysis of price dispersion over time for a specific product or service.  

Annual Booster Injection prices have risen drastically over the past two years

There are two pet-related services tracked in the ONS price quote dataset: annual booster injections and dog kennel boarding services. We focus our analysis on the annual booster injections as these are performed by vets. Annual booster injections is a preventive measure and the term is a catch-all for yearly vaccination appointments[1]. These injections are a common veterinary service and have been included in the ONS’s inflation basket since February 2003. Monthly price data for this service is available from 2010 for around 150 retailers around the UK. 

Between 2010 to 2020, the median price of annual booster injections rose steadily from £33.06 in January 2010 to £41.78 in January 2020. However, prices have increased rapidly since the pandemic and the latest median price for annual booster injections was £62 in February 2024. This equates to a percentage increase of 48.4% since January 2020. By comparison CPIH increased by 20.44% during the same period. 

The increase in the average price of annual booster injections in recent years is also notably strong when compared to the private health services for humans that are available in the ONS price quotes dataset. The average price of these private healthcare services have also increased in recent years but the trend is more staggered compared to annual booster injections. The percentage increase since January 2020 was 25%, 22.2% and 20% respectively for private dental exams, physiotherapy and chiropractors. 

 Figure 2: The median price for Annual Booster Injections has rapidly increased over the past two years

Prices for Annual Booster Injections have become more dispersed

The above shows the median price across all of the suppliers of annual booster injections, however the prices vary widely across suppliers. In February 2024, the prices in the sample for an annual booster injection ranged from as low as £23 to a high of £107. By comparison, in January 2010 the highest price was only £54.05 and the lowest was £19. 

We aggregate the price observations for each year to understand how the spread has changed over time.  After removing outliers, the spread of annual booster injection prices has increased since the covid-19 pandemic. 

Figure 3: The median price for Annual Booster Injections has rapidly increased over the past two years

The sample of suppliers for services is adjusted over time, but there are 77 stores in the sample for annual booster injections which have monthly observations in both 2010 and 2023. The spread of these stores follows a similar pattern to the overall sample so the change is not just driven by new stores in the sample. 

By comparison, the price range for physiotherapy has also increased over time in the dataset, from £20-75 in January 2010 to £35-£172 in February 2024. This is however not the case for private dental examinations and non-nhs chiropractors where the price range has decreased despite the higher median price. For dental services, the price range was £10-£149 in January 2010 versus £20-119 in February 2024, and for chiropractic services, the price range was £19-175 in January 2010 versus £20-150 in December 2023.

The evidence of large and increasing price dispersion has implications for the value of consumer search. Currently there is little consumer search for veterinary services. Our research with pet owners showed that the vast majority (67%) did not compare prices when choosing their veterinary practice, and a third of them (32%) said they didn’t do so because they did not believe there was a great deal of variation in price. While we are only able to show that price dispersion has increased for annual booster injections, if this finding were to hold for other veterinary services then it would indicate there may be considerable benefits to making prices more transparent and encouraging shopping around.