2. State of the Profession 2006 Research Objectives  Document professional/economic issues facing veterinarians.  Identify trends within the delivery of veterinary services today and in the future.  Evaluate the relationship between veterinarians and clients.  Benchmark similar survey results conducted in 2003, 2000 and 1997.

3. Methodology April 6- May 4 th, 2006Field Time: 60 pre-paid $25 Visa gift cards. One reminder e-mailed to all individuals who had not responded to the initial e-mail invitation. Incentives: Exclusive small animal, predominantly small animal, and mixed animal practices from DVM Newsmagazine’s circulation. Sample: DVM Newsmagazine and Advanstar Communications Research Services designed two surveys. Each used an online methodology. Surveys: Maximum Statistical Error @ 95% Confidence Level: +3.9% - Practice Management survey +4.2% - Staffing, Career, and Salary survey

4. Response Rate Effective net launchSubmittalsResponse Rate Practice Management survey4,84162513% Staffing, Career, and Salary survey 4,69556412%

5. About the Respondents Practice Management SurveyStaffing, Career Survey Year of Graduation

6. Practice Management SurveyStaffing, Career Survey About the Respondents

7. Practice Management SurveyStaffing, Career Survey Position in Practice Practice Type

8. Competition

9. The Competitive Pulse 2006 Q: How competitive do you consider the market for veterinary services in the region in which you practice? Practice Management Survey

10. Moving in Q: How many practices (within 5 miles) have opened in the past 3 years? Practice Management Survey 2006

11. Who’s the Competition? Q: From which of the following sources do you feel competitive business pressure? Practice Management Survey

12. The One Source Q: Which one source poses the most significant challenge to the success of your practice? Practice Management Survey

13. Sizing up the Competition 2006 Q: Are your facilities and medical equipment better, worse or about the same as other practices in your area? Practice Management Survey

14. Measuring up? 2006 Q: Are your facilities and medical equipment better, worse or about the same as other practices in your area? Practice Management Survey Annual gross

15. Corporate Practice Attitudes Practice Management Survey Q: How do you feel about corporate ownership and management of veterinary practice, both for the profession as a whole, and for you personally as an opportunity or career direction? 1997200020032006 Strongly in Favor4%3%4% Somewhat in Favor8%14%8% Neutral14%17%24%28% Somewhat Opposed22%21%25% Strongly Opposed41%45%39%35% Don’t Know Enough to Evaluate11%N/A For you personally For the profession 1997200020032006 Strongly in Favor3% 4% Somewhat in Favor10%17%11%9% Neutral17%21%32%36% Somewhat Opposed29%31%30%33% Strongly Opposed29%28%23%19% Don’t Know Enough to Evaluate 12%N/A

16. Market/Community Position 1997200020032006 We take all paying clients, providing them with whatever level of service they request/require. 74%71%69%64% We offer primarily high-quality diagnostic medicine and surgery, and tend to have clients for whom cost of treatment is not a major factor. 19%23%25%31% We primarily provide basic medical services, price our medical service low and attract cost-conscious pet owners. 7%6% 5% Practice Management Survey Q: Which statement most closely reflects your practice and client base?

17. Service Mix Practice Management Survey Q: Are you providing more, about the same or less of each service listed compared to 3 years ago?

18. Referrals Edge Higher Practice Management Survey Q: How many cases do you refer to specialists outside your practice in an average month? (check only one)

19. Common Referrals Practice Management Survey Q: What type(s) of cases do you usually refer?

20. Euthanasia

21. Stop-Treatment Point Practice Management Survey Q: Estimate the total dollar amount at which most of your clients would refuse or stop treatment of pets: $________. 2006 average: $1,451 2003 average: $961 2000 average: $795 1997 average: $576

22. Stop-Treatment Point Practice Management Survey Q: Estimate the total dollar amount at which most of your clients would refuse or stop treatment of pets: $________.

23. The Cost Factor Practice Management Survey Q: Over the past 12 months, to what extent has cost affected your clients’ decisions to treat (or continue treatment of) sick or injured animals? (Please assign a percentage.) 1997200020032006 Cases for which cost was not a factor at all25%30%26%31% Cases for which cost was a factor, but client agreed to recommended treatment 35%31%34%32% Cases for which cost limited treatment27%25% 23% Cases for which cost was the primary reason for no treatment 14%

24. Euthanasia Practice Management Survey Q: How many animals does your practice euthanize in an average month? 5.46.78.35.16.68.510.97.4AVERAGE 20062003200019972006200320001997 CATS DOGS

25. Talking about Euthanasia Practice Management Survey Q: Who in the practice talks to clients about euthanasia? Q: What percent of euthanasias are doctor- suggested or client requested?

26. Life and Death Decisions Practice Management Survey Q: In your estimation, when do clients opt to euthanize sick animals:

27. Euthanizing Healthy Animals Practice Management Survey Q: What are the primary reasons behind requests to euthanize healthy animals? (multiple answers given)

28. Relinquishment Problems Source: National Council on Pet Population Study & Policy Shelters euthanize and estimated 4 million to 6 million pets a year. Some high-intake shelters can take in 30,000 animals a year. Nationally, more than 55 percent of all intakes are believed to be euthanized.

29. Pet Health Insurance

30. Pet Health Insurance Growth Practice Management Survey Q: Do you accept pet health insurance?

31. Third-Party System Acceptance Practice Management Survey Q: If yes, do you actively recommend it? Base: 502

32. Third-Party Payment Resistance Practice Management Survey Q: If you don’t actively recommend it, why not? (write in) Base: 221

33. Attitudes About Insurance Practice Management Survey Q: Would you like to see wider use of pet health insurance by pet owners?

34. Revenue Mix/Cost Pressures

35. Most Pressing Issue Staffing, Career, Salary Survey Q: What is the most pressing issue facing veterinary medicine? (Please check one)

36. Number of Patients Staffing, Career, Salary Survey 2006 2006 average: 68 patients personally seen per week. Steady erosion noted in one-doctor practices from 82 per week in 1997 to 67 in 2006.

37. Average Client Transactions Practice Management Survey Q: What is your current average client transaction? 2006 average: $106 2003 average: $98 2000 average: $85 1997 average: $72

38. Average Client Transaction by practice size Staffing, Career, Salary Survey 1 doctor practice 2-3 doctor practice 4+ doctor practice

39. Active Client Base Staffing, Career, Salary Survey 2006 Q: Over the past three years, how has the size of your active client base changed?

40. Finance Predictions Staffing, Career, Salary Survey Q: Do you anticipate your practice gross will increase or decrease annually over the next three years? If you anticipate change, by what percentage will your practice gross revenue increase? If you anticipate change, by what percentage will your practice gross revenue decrease? Average: 9.3% Average: 10.9%

41. Net Revenue on the Rise Staffing, Career, Salary Survey Q: Were your 2005 net practice revenues greater than, about the same as or less than 2004 revenues? Q: Has your local economy influenced practice revenue? 2006 personal income average: $83,342 (Management survey average: $89,907)

42. Veterinary Service Mix Staffing, Career, Salary Survey Q: Approximately what percent of your practice’s annual gross comes from each of the following categories, and where do you anticipate these percentages will be in 3 years? Percentage of Practice Annual Gross Revenue Prediction of Percentages 3 Years from Now Annual Exams 17.318.0 Vaccinations 13.710.6 Diagnostics 19.021.0 Surgery 18.119.0 Non-invasive procedures 10.211.1 PRODUCT SALES Heartworm product sales 6.96.0 Flea & tick product sales 6.65.8 Pet food product sales 5.04.9 Pharmaceuticals/biologicals not included above 13.012.3 Other product sales 3.6

43. Changing Vaccine Protocol Staffing, Career, Salary Survey 2006 Q: If requested, will you provide just the vaccination with no exam or just a cursory exam? 1997

44. Changing Vaccine Protocol Staffing, Career, Salary Survey Q: How do you price vaccinations: one charge for vaccine, separate charge for exam; or one price for both?

45. Mark-ups Vary Staffing, Career, Salary Survey Q: What is your usual mark-up to clients on each of the following product categories? Product1997200020032006 Vaccines / biologicals373%276%244%143% Other Pharmaceuticals115%124%122%116% Heartworm preventive 98%81% Flea control products104%97%94%78% Therapeutic pet foods37%41%38%48% Premium pet foods37% 34%46% Pet supplies 82%87%75%

46. Percent mark-up on vaccines Staffing, Career, Salary Survey 2006

47. Staffing/Retention

48. Greatest Professional Concern Staffing, Career, Salary Survey Q: What is your greatest professional concern?

49. Measuring Workload Staffing, Career, Salary Survey Q: How do you perceive your current workload demands? Q: How many hours do you work in an average week? Average work week: 45.8 hours

50. Work/Life Balance Staffing, Career, Salary Survey Q: Is this more, less or about the same number of hours you worked in the past?

51. Staff Turnover Staffing, Career, Salary Survey Q: In regard to staff turnover, how many existing positions were filled in 2005? Average: 3.1 Positions Filled

52. Technician Turnover Staffing, Career, Salary Survey Q: On average, how long do certified veterinary technicians typically stay employed with your practice? Average: 5.2 Years

53. Technician Duties Staffing, Career, Salary Survey Q: What procedures would you feel comfortable allowing a certified veterinary technician to perform if accepted by your veterinary state board?

54. Response to Client Complaints Staffing, Career, Salary Survey Q: Who responds to client concerns/complaints about the practice’s delivery of medical care?

55. Finding Qualified Help Staffing, Career, Salary Survey Q: Can you find qualified technicians in the area in which you practice? Q: Can you find a qualified associate veterinarian in the area in which you practice?

56. Finding Qualified Help Staffing, Career, Salary Survey Q: Does your practice plan to hire additional veterinarians in the next 2 years? Q: If yes, how many full-time and part-time veterinarians does your practice plan to hire? Average: 1.3 Part-Time Average: 1.3 Full-Time * BASE: 287

57. Hiring Trends Staffing, Career, Salary Survey Q: How many new positions were created in 2005? Average: 1.2 New Positions Created

58. Career Satisfaction Staffing, Career, Salary Survey Q: Do you intend to stay in private practice your entire professional career? In 1997: 85 percent reported they would stay in private veterinary practice their entire professional career.