There is a range in how COVID has affected veterinary practices. Some clinics are booming with new pets adopted during the pandemic; others are experiencing low volume and revenue. Photo courtesy Brennen McKenzie Long before the pandemic, growing revenue and driving patient visits was pretty high on the priority list for most practices. Over the last two years (I can’t even believe it has been that long!) the conversation has focused on burnout, overworked veterinary teams, and the inability to keep up with the demand for service. The truth is, though, not every practice has experienced the COVID boom or maintained this level of client and patient growth. Some practices have experienced low volume and scary low revenue to the point where they have been faced with laying team members off. There is certainly a long list of ways to achieve better numbers within your practice. In this column, I’m going to touch on three areas I dive into when working with a “new to me” practice. Evaluate your pricing When was the last time you evaluated your pricing? Better yet, when was the last time you increased your prices? This should be a yearly practice, and the increase should be at the minimum of three percent. If you take this year into consideration, three percent may not be enough to meet the current inflation when performing your evaluation. Pharmacy inventory Your pharmacy inventory stock is part of the second largest expense in your hospital and an area of your practice that, if not managed well, can actually be a great way to lose money. The beauty of most practice management software platforms is their ability to help you manage inventory. If you are not utilizing this feature, I would suggest making this year the one to make that happen. Check these three boxes to ensure your practice is capturing the revenue it should be: 1) Automatic updates—Set percentage mark-ups for each item and check the automatic update box! Every time you receive an invoice into your PIMS if the price from the manufacturer went up, the price to the clients will automatically update and remove the risk of selling items at cost or below. (Yes, I’ve seen this happen more than once!) 2) Dispensing fee—Every product handled by a team member has a printed label or is repackaged for dispensing; each should have a dispensing fee to cover those costs. 3) Minimum fee—Every product dispensed at your practice should have a minimum fee. Some medications you stock cost less than one penny. If you dispense 20 tablets, it equates to $0.20 or less. This does not cover your ordering and holding costs, so utilize a minimum fee to capture those costs. Implementing these changes to your pharmacy inventory will definitely help increase your practice revenue. The cool part is you can see the effects of this pretty quickly. Service items Service items can be quite worrisome if they have not been updated in a while. Consider this: The cost of the item needed to perform a procedure has gone up, you have given raises to the team performing the service, but the service price itself hasn’t increased in over five years (or longer). This can really put the financial health of the practice in a predicament. In many ways, pricing is an art, so don’t rip the proverbial bandage off of everything. You want to price yourself appropriately so your practice remains healthy, but at the same time you are priced to achieve compliance. An often overlooked tactic when setting prices is “price shopping.” Obtaining prices from the surrounding practices to determine what they are charging for “shopped service items,” such as exams, vaccines, and spay/neuters ensure you stay in alignment with the community and prevents client attrition if you are overpriced. If the thought of diving into your service items is overwhelming, I encourage you to perform an ABC analysis and determine what your top service items and work on those first (see “Forgot your ABCs?”). The team Your team is an integral part of the entire health of your practice, and every interaction with a client is an opportunity to get that client in the door and then offer the best client experience and pet care possible. A few of the other topics surrounding revenue increases and client visits, such as Google reviews, appointment fill rate, etc., are directly impacted by the practice’s team and the client experience they provide. Capturing the client This sounds funny, and no, we are not out there with nets or traps trying to pull people off the street. What we should be doing is providing the client with a second-to-none experience from the minute the phone is answered. Conveying utmost compassion will easily set you apart from the practice down the street. If you do not believe me, take some time to call practices in the area and see how the client service team treats you. If we can empathize with clients and their needs and provide solution-based responses, we are sure to capture their business. Instead of interactions like this: Client: “My dog has been vomiting all night.” Team: “I don’t have an appointment today, we are full. We can see you in two days.” Go for interactions like this: Client: “My dog has been vomiting all night.” Team: “Oh no! I am so sorry kiddo is feeling bad! Last night must have been pretty sleepless for everyone. Let me get some more information from you and see what kind of solution we can come up with here.” The solution might be they have to visit the practice down the road, but you making the extra effort to help them will make a huge impact. I have witnessed this happen, and a few days later received a call stating they are switching all their pet’s records to the practice that helped them in their time of need, even though they did not even come to their practice for this specific event! Offer the very best pet care Offering the very best pet care does not mean up-selling. To me, it means the practice is offering the client gold standard care, having very clear protocols and procedures in place, and ensuring the team is trained on how to educate the client. The outcome is better pet care, increased compliance, and increased revenue for the practice. You are doing the work, so keep the revenue! We joined this profession to help animals, and on occasion, due to the client’s financial situation, we are put in a position where we may not be unable to help those animals. It is hard sometimes to look at an animal you know you could fix for $300 to $500, but the client is opting for euthanasia because they cannot afford the treatment. What I see happen over and over is the doctor performs the procedure or treatment that needs to be done at either a discount, or lets it sit in accounts receivable for the next two years (which I don’t recommend). At the end of the day, the team/doctor walks away feeling like they did a good deed and saved a pet’s life. The consequence—a direct impact on the financial health of the practice, especially if this is not an isolated event. Discounts and accounts receivable balances add up! You can foster this level of goodwill without negatively impacting the practice, but first it is imperative you have a clear picture of just how often this happens inside your practice. Review the accounts receivable Comb through your accounts receivable report if it has been a while. I prefer to review this on a monthly basis to identify trends—one doctor letting clients leave without paying, or maybe a CSR who is terrified to present the big numbers that may be on an invoice. Send those statements out once a month without fail. You can send statements in the mail with a letter; however, I have great success with phone calls, so something you may want to add to your AR recovery tactics. After 90 days, send the client to collections. In a perfect world, AR should be pretty darn close to $0. In the real world, keeping it under one percent of revenue is a great place to start. Track your discounts In most practice management software platforms, you can track what is being discounted. Implement a process that will allow all discounts to be tracked and monitored. Once you have a solid process in place, you can review the discounts on a daily basis and provide coaching as soon as possible. When reviewing this, not only are you looking at how much monetarily was discounted, it is important to identify the use of a miscellaneous code, adjusting the price of an item, or just not adding items to the invoice. If you can dream it, the team can figure out how to side step having a discount show up on a report. Determine if you have a main “discounter” and follow up in regular intervals. Habits can be hard to break, and this is an expensive one to maintain. Create new, healthy habits As I mentioned above, this level of goodwill can potentially be nurtured, but we must do it in a healthier way for the benefit of the practice and the team. Offer third-party financing in your practice such as Scratchpay, CareCredit, VitusPay, etc. Create an angel fund and make it known to your clients so they can donate if they wish. Once the fund is empty, it will need to be replenished prior to “using” again. There shouldn’t be a financing option—what is there is available, and when it’s gone, well, it will have to build back up again to use. Work with a 501(c)(3) that specifically raises funds for pets in need of medical treatment. Growing revenue is not always about driving more, it is also about capturing the revenue for the current work you are doing. Do not be shy to bring this to the forefront, set expectations, and start holding the team accountable! Of course, marketing tactics could have easily made my list, but marketing has the tendency to cost the practice, no matter how small the initiative. With the focus on improving what you are currently doing, you will be pleased to see numbers heading in the right direction, both with revenue and patient visits. FORGOT YOUR ABCs? Your “A” services are the top 20 percent of your services which encompass approximately 80 percent of your revenue. These services are used every day all day and need to be priced appropriately. If it is a shopped service, price it to be in line with your surrounding community, if it is not shopped, use industry benchmarks from publications, such as the Well-Managed Practice Benchmark Study or the AAHA Veterinary Fee Reference publication. Your “B” services are the next 30 percent and services not used as frequently but still should be priced within benchmarks. Finally, your “C” services some of which, though infrequent, may be worth retaining or consider referring elsewhere. Emily Shiver, CVPM, CCFP, CVBL, is a certified veterinary practice manager serving as the Florida regional director of operations for Family Vet Group. Her passion is creating and maintaining positive, successful workplace cultures, as well as helping practices increase revenue and the client experience. Shiver enjoys every aspect of inventory and strives to help practices meet and exceed their inventory goals. She and her husband reside in Lakeland, Fla., with their two Patterdale terriers and a few other furry family members.
