Veterinary Medicine - Chapter 1, Description of the Practice of Veterinary Medicine
Publication Date - April, 2005
NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.
- Industry Background History
- Demographics of Veterinarians
- What Veterinarians Do
- Veterinarians by Type of Practice
- Industry Terminology
- Industry Organizations
- Income of Veterinarians
- Exhibit 1-1: Glossary of Veterinary Medicine Terms
Industry Background History
Doctors of Veterinary Medicine are medical professionals whose primary responsibility is protecting the health and welfare of animals and people. The first College of Veterinary Medicine in the United States was established in 1879 at Iowa State University. Before that time animals were treated by veterinarians trained in Europe or by individuals without formal education. Veterinary medicine has progressed very rapidly in the one hundred plus years since then. Veterinarians have been at the forefront in control of diseases such as tuberculosis, brucellosis, hog cholera, and Newcastle disease of chickens.
Today veterinarians in private clinical practice are responsible for the health of approximately 52 million dogs, 55 million cats, 11.7 million birds, and more than 7 million other pet animals. They also care for more than 8 million horses, 115 million cattle, 56 million hogs, and 12 million sheep and lambs that make up our nation’s $80 trillion livestock industry. In 2004, there were 28 colleges of veterinary medicine in the United States graduating approximately 2,200 new veterinarians each year..
Demographics of Veterinarians
As of December 31, 2003, the American Veterinary Medical Association (AVMA) officially had 70,254 members. This represents 86% of US veterinarians.
The membership of the AVMA is further broken down by the following categories:
|1,784||Large Animal exclusively (Horse, Cattle, Sheep, Goats, Swine, etc.)|
|33,658||Small Animal exclusively (Dogs, Cats and other pets)|
|3,519||Mixed Practice Predominately Large Animal (80% Large/20% Small Animal)|
|5,855||Mixed Practice Predominately Small Animal (80% Small/20% Large Animal)|
|827||Bovine Practice exclusive|
|2,529||Equine Practice exclusive|
|48,172||Total AVMA members|
These 48,172 AVMA members, or 69% of the total membership, provide direct service to animals in a practice setting. The remainder are in academia, research, state and federal government employment (including military), and public health and industry. It is estimated that the average veterinary practice in the United States involves two veterinarians. AVMA statistics for 2001 indicate that there are 21,044 private veterinary practices in the United States providing medical care and professional services to animals on behalf of their owners. See JAVMA, Vol. 222, No.12, June 15, 2003.
Veterinarians require a minimum of three years pre-veterinary education followed by a four-year veterinary curriculum resulting in a Doctor of Veterinary Medicine degree. The curriculum is extensive and includes both pre-clinical sciences and clinical sciences involving all known species of animals as well as the public health aspects of animal care and disease.
The minimum of seven years education has escalated in cost dramatically in recent years. In addition, many veterinarians have four or more years of college education prior to acceptance in the highly competitive programs leading to a Doctor of Veterinary Medicine degree. The average educational debt of recent graduates (2003) is approximately $70,000. The mean educational debt for 2003 graduates is over $76,000. It is not uncommon for veterinarians to owe well over $100,000. This debt often requires payment over ten to twenty years. Veterinarians are not required to complete an internship before beginning practice. However, many internship and residency programs exist and an increasing number of new graduates are taking advantage of them. Before graduate veterinarians can engage in private clinical practice, they must acquire a license issued by the state. A license is granted only to veterinarians who pass state-required examinations.
What Veterinarians Do
Veterinarians diagnose and control animal diseases, treat sick and injured animals, prevent the transmission of animal diseases to people, advise owners of proper care of pets and livestock, and ensure a safe food supply for people by maintaining the health of food producing animals.
Veterinarians examine their animal patients, vaccinate them against diseases, treat illnesses, perform radiological and laboratory examinations, act as a pharmacy, perform surgery, and advise the animal owners on ways to keep pets and livestock well nourished and healthy.
Veterinarians may see their patients in a veterinary hospital or they may care for their patients on farms, ranches, feedlots, or other facilities. Both large and small animal practitioners may operate solely from self-contained mobile units, which are designed for providing services at farms or private homes. There are a very limited number of veterinary hospitals that are publicly supported. Veterinarians, in most cases, either own the building and equipment used to provide medical services for their patients, or rent it from a related or non-related entity.
Veterinarians who care for the ”large” food producing animals and horses must maintain large inventories of animal drugs and supplies to provide these services since commercial pharmacies rarely have the required quantity of biologicals and pharmaceuticals for animals. Similarly, veterinarians engaged in small animal practice must maintain the particular drugs, drug dosages and biologicals, which are not available in commercial pharmacies. Mixed animal practitioners maintain drugs for both large and small animals. The need to maintain drug inventories that are necessary for the wide array of animals, which may not be treated with standard human preparations, requires the veterinarian to engage in the commercial sale of animal drugs.
Many veterinary practices derive significant income from nonprofessional services, which include the bathing, grooming and boarding of pets. These activities usually occur on the same premises where veterinary medicine and surgery are performed. Nonprofessional staff employed by the veterinarian typically performs these services. During the holidays and summer vacation season, a significant amount of time will be spent on the nonprofessional activities of boarding animals.
In addition, the sale of pet and other animal feed and non-medical supplies that animal owners frequently request are common sources of income for veterinarians. In contrast to pet shops or feed stores, veterinarians often do not use displays, posters, banners or other obvious forms of advertising on their premises despite significant sales of such products.
Physicians treating humans usually derive all of their income from activities and time devoted to providing professional services. In contrast and because veterinarians maintain unique facilities, they often devote a significant amount of time to and derive significant income from nonprofessional activities such as boarding, grooming, and the sale of drugs and biologicals.
Keep in mind that many veterinarians do not own practices, but are employed by practice-owning veterinarians. Also, there are several corporations which own a national “chain” of animal hospitals and employ a large number of veterinarians. In addition, a number of veterinarians are engaged in “relief” practice where they serve as temporary staff to other veterinarians who are required to be absent (e.g. on vacation).
A significant number of veterinarians are engaged in nontraditional practice. AVMA statistics indicate almost 9,000 veterinarians are engaged in public or corporate practice. This would include those employed by industry, universities, federal and state government and the uniformed services. These individuals usually are not small business owners, unlike those veterinarians who own private practices.
The industry includes all individuals or entities engaged in the practice of veterinary medicine through ownership or management of practices, organizations, facilities, or equipment which provide medical services to animals. Practitioners’ activities may be reported on Form 1040 (wages or Schedule C practice), Form 1065, Form 1120, or Form 1120S.
Owners of facilities and veterinary organizations generally will report as sole proprietors, partnerships or corporate entities. The veterinary medical practice industry includes, but is not limited to:
- Sole Practitioners
- Veterinary Clinics
- Veterinary Hospitals
- Diagnostic Imaging Services
- In-Vitro Fertilization Clinics
- Veterinary Organizations
- Regulatory Agencies
- Educational Institutions
Veterinarians by Type of Practice
The types of animals treated can also differentiate veterinary practices. This section discusses three major categories:
- Large Animal (exclusive and predominant)
- Small Animal
- Mixed Animal
One of the characteristics that distinguishes a large animal veterinary practice or a mixed animal practice from a small animal veterinary practice is the fact that most large animal care is provided at the client’s premises rather than at the site of the veterinary practice. However, not all large animal care is delivered in the field. Many large animal practices have some type of in-house surgery or facility for treating animals on the veterinarian’s premises when necessary. These in-house facilities will vary from the very simple (for example, a couple of stalls) to the state of the art specially constructed surgeries, which have been designed and equipped to accommodate the physiology of the animal being treated.
Large animal veterinary care provided at the client’s premises might alter the nature of the practice and its records in several ways. It is common for the veterinarian to treat from one to several hundred animals during one visit. To expedite service in the field, large animal veterinarians have vehicles that are equipped to transport medications, drugs, supplies, and equipment. They may conduct something as simple as pregnancy tests or vaccinations on several hundred dairy cattle during one visit or as complex as treating a particular disease outbreak on several hundred beef cattle or hogs. The nature of animal agriculture is such that the close quarters in which cattle are maintained in feedlots, or dairy or hog facilities require controlling disease immediately as a matter of preventing financial disaster to the farmer.
When the veterinary care is delivered at the client’s premises, it is common for the veterinarian not to receive payment at the time the services are rendered. A “trip sheet” or “trip ticket” will probably be prepared showing the client’s name, the date the procedure was performed, the drugs dispensed or administered, the number of animals treated for each procedure or administration and the mileage charged. Upon return to his/her office, the veterinarian will give the document to a staff member who will use it to prepare an invoice. The timing of sending invoices will vary from daily to once or twice monthly. As a result, large and mixed-animal practices tend to maintain active and ongoing accounts receivable. The particulars regarding whether or not the veterinarian accepts payment at the time of the service, the frequency of sending invoices, and the existence of an accounts receivable should all be specifically documented during the initial interview.
As in most retail/wholesale business, veterinarians may offer different fee structures to their customers. High-volume clients may be charged less for medications and drugs than the occasional client. If this is the case, the practice will generally utilize an indicator on its client list denoting the status as a low, middle, or high volume client. The key for this coding should be obtained during the initial interview.
Another significant feature of this type of practice is the large inventory of medicines that must be maintained to respond quickly to disease outbreaks or requests for vaccination. Determine what types of inventory records are maintained and how often a physical inventory is taken.
Be aware that many large animal veterinarians often keep cattle, horses, or swine on their own farms. Determine at the initial interview how the veterinarian accounts for personal use items.
Large animal practices are also subject to seasonal fluctuations in the workload due to the differing demands of the animals treated. For instance, a practice devoted mainly to the treatment of cattle tends to be busiest during the spring and again during the last three months of the year. A practice specializing in the care of horses will have its busiest season during the spring. Seasonal fluctuations in business should be fully explored and documented during the initial interview and reconciled to the taxpayer’s records. (See Chapter 2 for a complete discussion on selection of a taxable year.)
Small animal practices vary from large animal practices in several ways. Most of their customers come to the practice premises to be treated and payment is expected at the time the treatment or service is rendered. However, due to the ever-increasing cost of treatments, more and more veterinarians are allowing payment schedules. In addition, there are now several national pet insurance companies. These companies allow the customer to select any veterinarian nationwide and then will make a payment to the veterinarian or the insured based on a schedule of allowances less a small deductible. For this reason even small animal practices may maintain accounts receivable. How and when payment is expected should be discussed during the initial interview.
Since small animals are treated one at a time, not in herds, generally the need to maintain large inventories of drugs and supplies will be diminished. A recent trend in small animal practices has been to combine several small animal practices under common ownership creating a larger economic unit with which to obtain pricing discounts on purchases of drugs and supplies. These larger organizations often maintain central purchasing and inventory facilities and will maintain larger inventories as a result. Therefore, it will be necessary to determine how purchases are made and how much inventory is kept on-hand.
Mixed animal practices will combine elements of both large and small animal practices and will require an in-depth interview to determine which elements of each are used in the practice.
Much of the terminology used is unique to the industry. However, it is similar to the terminology used in the health care industry. A glossary of terms is included at Exhibit 1-1. It is recommended that examiners familiarize themselves with the terms unique to this industry prior to the initial interview in order to facilitate the examination.
Refer to Exhibit 4-5 for a selected list of industry organizations and their web links.
Income of U.S. Veterinarians
Veterinary Economics annually conducts a statistically valid survey of veterinarians to compile information about practice revenue by type of practice, personal income by type of practice, and different expense categories as a percentage of revenue by type of practice. The survey results are published annually in the fall (September and November) with one issue devoted to expenses and another issue devoted to revenues. These surveys may be a useful source of information and are found at libraries of Colleges of Veterinary Medicine. In addition, the taxpayer/veterinarian may also subscribe to this journal.
Additional information can be obtained by contacting the American Veterinary Medical Association or other professional associations listed in Exhibit 4-5.
Exhibit 1-1, Glossary of Veterinary Medicine Terminology and Common Terms for the Industry
AABP - American Association of Bovine Practitioners
AAEP - American Association of Equine Practitioners
AAHA - American Animal Hospital Association
AALS - American Association of Laboratory Science
AASP - American Association of Swine Practitioners
AASRP - American Association of Small Ruminant Practitioners
Accreditation - the process of evaluating an institution or program for meeting specific criteria or standards.
Acupuncture - an Oriental system of therapy or anesthesia. Needles are inserted at critical places of the body that affect another part of the body.
Accrual basis - accounting method which recognizes revenue in the period in which the service is provided, regardless of when the cash is received, and recognizes expenses in the period in which the expenses are incurred, regardless of when they are paid.
AHT - the abbreviation for Animal Health Technician, the widely used term for Animal Technician or Veterinary Technician.
Allowance for uncollectibles - bad debt service.
Ancillary services - those services other than room, board, and medical; such services as laboratory, radiology, pharmacy, and therapy services that are provided to hospital patients in the course of care.
APHIS - Animal and Plant Health Inspection Service, United States Department of Agriculture
ASPCA - American Society for the Prevention of Cruelty to Animals
Assay - to test or analyze.
Avian - birds.
AVMA - American Veterinary Medical Association
Balm - a soothing ointment.
Beef bull - a male animal that is part of the breeding herd for raising beef calves.
Boar - a male pig which is part of the breeding herd for raising feeder pigs.
Bovine - pertaining to cattle and ox-like animals.
Brand - an iron used for burning marks on livestock. Each farmer's brand is unique; therefore, each herd can be distinguished from another.
Breeding - the mating of animals.
Bred heifer - a young, female dairy animal which has been bred to increase its resale value and is not used as part of a farmer's dairy herd.
Brood cow - a female animal which is part of the breeding herd for raising beef calves.
Brucellosis - the contagious, infectious, and communicable disease caused by bacteria which affects cattle. It is also known as Banks disease, undulant fever, or contagious abortion.
Bull - the male of a bovine animal.
Cafeteria plan - a separate written plan maintained by an employer for the benefit of its employees, under which all participants are employees and each participant has the opportunity to select among various benefits consisting of cash and certain nontaxable benefits (that is, accident and health insurance). Participants electing the nontaxable benefits under this arrangement will not have to include the available cash in gross income.
Calf - the young of a cow.
Capital-related costs - as defined in Public Health, 42 C.F.R. § 405.414
- Net depreciation expense - adjusted by gains and losses realized from the disposal of depreciable assets.
- Leases and rentals - for the use of assets that would be depreciable if the provider owned them outright and other leasing arrangements.
- Betterments and improvements - that extend the estimated life of an asset at least two years beyond its original estimated useful life.
- The cost of minor equipment that is capitalized rather than charged off to expense.
- Interest expense incurred in acquiring land or depreciable assets used for patient care or in refinancing debt that was originally incurred to acquire land or depreciable assets used for patient care.
- Insurance on depreciable assets used for patient care, or insurance that provides for the payment of capital-related costs during business interruption.
- Taxes on land or depreciable assets used for patient care.
Cash basis - accounting method which recognizes revenue only in the accounting period when cash is received (actually or constructively)and expenses only in the period paid.
Client – the preferred term (rather than customer) for referring to the owners of animals who seek the services of veterinarians.
Clinic - where patients are examined and treated.
Clinician - a veterinarian engaged in clinical practice, as distinguished from a veterinarian engaged in researching, or teaching. Compensation includes but is not limited to: all fees, monetary rewards, or discounts received directly or indirectly.
Cow - the female of a bovine animal.
Cull cow - a female dairy animal which is no longer profitable as a milk producing cow.
Dairy bull - a male dairy animal which has been used in the dairy herd for breeding.
DEA - Drug Enforcement Agency
Diagnosis - the commonly accepted term used to describe a disease or injury.
Diagnostic imaging services - provide access to imaging tests (such as magnetic resonance imaging). They operate in-hospital, freestanding, and mobile imaging centers.
Dispense - to give out medicine.
D.V.M. - Doctor of Veterinary Medicine.
D.V.S. - Doctor of Veterinary Science.
Dx - diagnosis.
E.R. - emergency room.
Eartag - an APHIS approved identification conforming to the nine-character alphanumeric National Uniform Eartagging System which provides unique identification for each animal within a herd.
Equine - horse.
Ewes - female sheep that are part of the breeding herd for raising lambs.
FDA - Food and Drug Administration
Federal/State Animal Health Technician - an individual who vaccinates heifers at the auction barn for Brucellosis and also tests all adult cattle for this disease.
Feeder pig (porker) - weaned pig, being fattened for market.
Fee for services - a method of charging clients for services or treatment in which a veterinarian bills for each patient encounter or treatment or service rendered.
Fee schedule - a list of established charges or allowances for specified schedule medical procedures.
Field test chart - a document showing that a Brucellosis test was performed at a farmer's pasture.
Filly - young female horse.
Gelding - a male horse which has been castrated.
Gilt - a young female hog that has not produced a litter of pigs.
Group - a combined practice of three or more veterinarians who share office space, equipment, records, office personnel, expenses, or income.
Guernsey - a breed of dairy cattle that produces a rich, yellowish milk.
Heifer - a young cow that has not had a calf.
Herd - all animals under common ownership or supervision that are grouped on one or more parts of any single lot, farm, or ranch.
Herd blood test - in general, a blood test that is conducted on a herd of cattle at a farmer's pasture to test for Brucellosis.
Hereford - a breed of beef cattle which are red with white faces.
Holstein - a breed of dairy cattle that produces large quantities of relatively low fat milk.
Hospital - an institution primarily engaged on a continuous basis in providing, by or under the supervision of veterinarians, to inpatients: diagnostic and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick animals, and/or rehabilitation services of injured, disabled, or sick animals.
Hx - history.
In vitro - in the test tube; referring to chemical reactions (or biological processes) in a laboratory situation.
Jersey - a smaller breed of dairy cattle that produces a rich milk.
Kennel - a building, a room, or small shelter for housing dogs.
L.A. - large animal.
Lamb - a young sheep.
Large animal - a general term to distinguish one field of veterinary medicine. Large animals include horses, cattle, sheep, pigs, and goats.
Malpractice - the failure, in providing professional services, to exercise the degree of skill and care generally exercised by like professionals under similar circumstances. This term is usually applied to such conduct by doctors, lawyers, and accountants. However, it also applies to veterinarians.
Mare - a female horse.
Medical record - the record of a patient maintained by a hospital or a veterinarian for the purpose of documenting clinical data on diagnosis, treatment, and outcome.
Medical administrator - a person who maintains records that meet the medical, administrative, legal, ethical, regulatory, and institutional requirements of an entity.
MRI - Magnetic Resonance Imager; an expensive, high-tech medical diagnostic device which utilizes magnetic energy and radio waves to produce clear images of internal organs without X-rays. May be hospital based or free standing and is often the subject of joint ventures.
M.R.C.V.S. - Member of the Royal College of Veterinary Surgeons, a designation for a British veterinarian.
NAVTA - North American Veterinary Technicians Association
Ointment - salve; an externally applied medication in a semisolid base.
Oocyte - immature eggs.
OR - operating room.
Outpatient - a patient treated in a clinic and released; not confined to the hospital.
Pathologist - a veterinarian with special training in the area of diseases, especially the changes caused by diseases in the organs and tissues.
Patient - an animal, suffering from disease or injury that is being treated by a veterinarian.
Pharmacy - a part of a building where drugs are stored, prepared, and dispensed.
Pig - a young hog, usually less than 10 weeks old.
Practice - to actively work in the field of veterinary medicine.
Practitioner - a veterinarian or physician in practice, as opposed to research or teaching.
Prescription - administration or prescription of any drug for physical ailment by a veterinarian.
p.t. - patient.
P.T. - physical therapy.
Px. - physical examination.
Radiology - the science of radiant energy and its diagnostic and therapeutic uses in medicine.
Ram - (also called buck) a male sheep which is part of the breeding herd for raising lambs.
RANA - a person qualified by the Registered Animal Nursing Auxiliary of Great Britain; the equivalent of a veterinary technician in the U.S.
Rx - medication, treatment, or prescription.
Shoat - a pig that is about 8 weeks old and has been weaned.
SOAP - Subjective, Objective, Assessment, Plan. A form of record keeping.
Sow - a female hog which has produced a litter of pigs.
Steer - a male bovine animal castrated before sexual maturity and usually raised for beef.
Surgeon - one who treats with surgery.
Swab - a piece of cotton or gauze attached to a stick used for cleaning body cavities or applying medication.
Technician - veterinary technician.
Technology - the knowledge of methods and procedures of science and medicine.
Test - a procedure performed to identify disease-causing or disease-related organisms, chemicals etc., in a body tissue (or a body fluid).
Therapeutic - pertaining to the treatment of disease, often used to mean beneficial.
Therapeutics - an area of medicine concerned with treating disease.
Therapy - the treatment of a disease:
- Behavior therapy - the use of psychological methods to train animals.
- Physical therapy - the use of equipment and exercise to strengthen injured muscles and limbs.
Transfusion - the transfer of blood from one animal to another of the same species.
Transplant - to transfer tissue from one location to another or from one animal to another.
Treatment - therapy.
Tx - treatment.
Vaccinate - to administer vaccine.
Vaccine - a solution derived from bacteria or viruses to protect patients against a specific disease.
Veterinarian - one who is trained and licensed to treat and prevent disease in wild or domestic animals and to deal with problems of breeding, feeding, and housing livestock. A veterinarian will have a D.V.M., V.M.D., or M.R.C.V.S. degree.
Veterinary - pertaining to the medical care of animals.
Veterinary technician - one who is trained to assist veterinarians in most aspects of clinical veterinary work.
Virology - the study of viruses and disease caused by viruses.
V.M.D. - Veterinary Medical Doctor.
V.T. - Veterinary technician.
Yearling - a bovine animal that is or is rated as a year old.