It's time to bail out your practice

Life can be very strange indeed. The Bureau of Labor Statistics proclaims veterinary medicine to be one of the fastest-growing fields in America. The veterinary colleges are spewing out 2,600 graduates every year while 1,000 are retiring, for a net gain of 1,600 new practitioners.

But, here's a surprise: Forty percent of those debt-laden 1,600 — some 650 graduates — are putting off entering the marketplace, opting instead for post-graduate programs.

We may set records in having the best educated unemployed professionals in the world.

There is a plethora of opportunities for the entire graduating class in food-animal medicine, academia and the Department of Homeland Security. However, I see no line of applicants in those areas.

On a daily basis, I search for locations for veterinarians to start new practices. The goal is to find places that can generate professional success based on population growth, pet spending and discretionary income. This is a difficult task, successful because of very powerful computers that have the demographic information and the ability to put it all together. The days of finding a nice town that looks great and making a decision based on guesswork are long gone.

Charlotte, N.C., is a wonderful-looking town, with lots of new growth but devastatingly short on discretionary income. There, the main employers are banks and insurance companies. Even New York City is scheduled to lose 165,000 jobs, and at least 27 states are or will be in recession by the time you read this column.

Some 55 million people are leaving the colder climates and heading south and west, and will continue to do so through the year 2015, according to American Demographics magazine.

A good portion of equine veterinarians in Texas just moved there from Montana and North Dakota. It's always been a long trip to get treatment for your horse in Montana. Why aren't the new graduates all headed for Montana?

Economic concerns

If you are a companion-animal practitioner in a mature practice (five years or older) in most of the United States, your transactions are down each year of this decade. If you own a multi-doctor practice, it is likely you will lay off one of your associates in the next year if you have not already done so. The standard of 12 to 15 client transactions per veterinarian per day is now closer to 10 to 12, and the mortgage isn't getting easier to pay.

The fear is palpable.

Dentistry and other relatively expensive procedures are down sharply even at the best practices, as 50 percent of our population worries about the economy, 30 percent about paying their heating bills this winter, 23 percent worry about losing their jobs and 31 percent fear defaulting on their mortgages. How long can periodontitis stand up to that?

Clients view the $700 billion bank bailout as being about as effective as last spring's economic stimulus package, which helped "not at all," according to 58 percent of those surveyed.

We cannot hope that any government policy will bail us out. We have to do it ourselves, and the good news is, we can.

For more than 20 years I have made a living going into someone else's practice and convincing him or her to do the right thing — manage the practice effectively.

Righting the ship

It is truly amazing the turnaround seen when veterinarians can be talked out of their bad management habits in favor making a better living for themselves and their staffs.

Even so, monthly oversight often is needed to get many of them back on course. Some are upset that they can no longer give all their friends all the discounts they want. They hate it when they have to take the time to document — in writing — what the pet needs so that the client really understands what the pet needs, even giving them the information they need to look up unfamiliar terms (and that's pretty much all the terms we use).

They hate it when they have to rate their staff's performance quarterly to decide who gets a bonus from the extra money coming in due to better communication with clients. They hate increasing their fees quarterly because they have forgotten that inflation exists and that they have goals to meet. They hate letting their expensive lab equipment sit idle except for emergencies (when a stat fee is charged.) The extra profits derived from lower reagent costs and lower labor costs are bitter because their little machines are "neat."

They like the extra profit, and each extra dollar coming in is about 80 percent profit when you do it right. It's just that their profit & loss statement seems like a foreign language. If they are limited to 15 percent of last month's gross for drugs, that's just not the way they are used to doing things. What's an extra $10,000 sitting on the shelves? They've done it that way their whole career. Why should staff have to use the oldest (still in date) bottle first? That once-a-day version is better. Why do I have to use up most of my twice-a-day product before ordering the new stuff?

And the staff level has got to be appropriate for the number of clients coming in. We need at least $5 of revenue for each $1 of payroll each month. When it drops below $4.50, you are in trouble.

Some decisions are just harder if we let them slide too long. That staff member whose work is marginal should have been replaced a year ago. Now it's even tougher.

No, we are not General Motors and our staff is our family, but some family members may have been not-so-juvenile delinquents.

"She's late every day but she's a good tech" tells me that discipline is completely out of control in a practice and that the staff is actually abusing the managers. Talk about the tail wagging the dog.

Good management is difficult, but the consequences of poor management are worse. It's time to bail yourself out.

Dr. Snyder, a well-known consultant, publishes Veterinary Productivity, a newsletter for practice productivity. He can be reached at 112 Harmon Cove Towers Secaucus, NJ 07094; (800) 292-7995; Vethelp@comcast.net; fax: (866) 908-6986.