The R word: Recession

The R word: Recession

Apr 01, 2008

Photo by Mark McDonald
It's all over the news. It's on the tip of everyone's tongue. The economic slowdown. The possible recession. Americans are losing their homes, their jobs, and the greenbacks that were fattening their wallets just months ago. The Federal Reserve has dropped interest rates in an attempt to reverse the troubles, but consumer confidence is down and unemployment is up.

At press time, financial experts still couldn't agree whether the United States was in a recession, headed for a recession, or just suffering a little punishment because too many people got loans for homes they couldn't afford. Whatever they call it—the "R" word or not—it's going to hit your practice sooner or later. The timing depends on where you work—it will spread region by region, state by state, neighborhood by neighborhood.

For now, veterinarians' stories vary. Near Detroit, where people have been losing jobs and homes for years as a result of the faltering U.S. auto industry, Dr. Claude Curry is experiencing a revenue decline—and may be seeing what his colleagues around the country will face in coming months. Two of Dr. Curry's four practices are in established suburbs, and for the past six or seven years the income at these practices has dropped off; they've seen fewer new clients and client visits. And in the past six months, his practices in newer areas have seen less growth than in previous years. Dr. Curry closes two practices one day a week on a rotating schedule to save on staff costs.

Icons by Karen Fredericks
Across the country, in South Miami, Fla., home prices skyrocketed for years and are now falling almost as fast. Associate Dr. Patty Khuly says business is as strong as ever—though Miami pet owners (even the well-off ones) are still slow to accept wellness recommendations.

 Dr. Karen Blakeley owns a practice in Macomb, Ill., and many of her clients are cash-strapped students attending Western Illinois University. Despite the changing economic environment, Dr. Blakeley says the percentage of her clients who accept the highest level of care and those who do nothing but emergency care is holding steady.

The economic situation has hit Dr. Dennis Chmiel hard. His Merrimack, N.H., practice is nestled in a suburban nook where housing prices have fallen. "Our revenue has stagnated," he says. "Based on conversations I've had, I think other practices in the area are equally affected—except maybe newer practices in growing areas."

These state-by-state disparities don't surprise economist  Dan North ,who predicted this slowdown back in March 2007. North says that national recessions start regionally and spread nationally. "We're going to see job losses that aren't just regional, and we'll see economic growth slow across the country," he says. In other words, this downturn is just getting started.