Pinpointing price

Imagine you receive a call about a horse experiencing a severe case of colic. You stabilize the horse and perform a physical examination, after which the horse exhibits signs of colic again.

You discuss medical and surgical treatments and the prognosis of each with your client, who's obviously upset by your findings and by the prospect of losing the horse. You know from experience that the response to treatment is unpredictable. The horse may respond to therapy, may fail to respond, or may die-no matter what you attempt. You can provide: 1. a referral to a specialist; 2. in-house care with ICU hospitalization, IV fluids, and frequent lab monitoring; 3. in-house care with symptomatic treatment; or 4. symptomatic treatment on-site.

Consider your costs

Select the treatment you would offer if your client were a teenage girl with a backyard horse. What if your client were an absentee owner of a stakes winner represented by a trainer?

Small animal veterinarians who responded to a similar scenario as part of The Brakke Management and Behavior Study in 1999 more frequently said they'd offer better treatment options to a client described as a successful young professional than a client described as an elderly widow of modest means.

Now consider the scenario about the colicky horse again. Except this time, make your treatment selection based on whether your patient is in a state like Montana or West Virginia or a state like California or Florida. Would you offer the same treatment no matter where your client lives? Should you? Yes-but that doesn't always happen.

The key: Good business leads to good medicine and strong relationships with clients. And three simple steps lay the foundation for fair fees: focus on your patients' needs, attract clients you feel good about serving, and communicate the value you offer effectively.

Focus on your patients

"Veterinarians should offer their clients options, starting with the highest quality medicine, regardless of the practice's location or the client's situation," says Dr. Rick Lesser, part owner of the Equine Clinic at OakenCroft in Ravena, N.Y. "Don't compromise your medicine."

On the other hand, you can't expect to develop a profitable practice in an area that's short on clients or money. "You can't expect that clients will always choose Beverly Hills service in Saskatoon, Saskatchewan," says Dr. Andy Clark, MBA, an equine practice management consultant with New West Horse Co. in Oakdale, Calif. "You can't always provide the appropriate care."

However, he agrees it's important to offer clients the best choice first. Then, without negotiating the price, offer the second-best choice and the third-best choice, stopping at a minimum level of care that is legally defensible and ethical.

Your clients won't always make the choices you'd like. As Dr. Clark says, "Life isn't fair. But it's not our duty to subsidize someone's hobby. If they can't afford the appropriate care, they probably shouldn't own a horse."

One key lesson: You can't prejudge clients, Dr. Clark says. He knows of owners who pooled their resources to pay for care. And he knows owners who could have easily afforded the best care for their horse and didn't choose it.

Choose your clients well

According to Dr. Ed Blach, MS, MBA, CEO of Hagyard-Davidson-McGee Associates in Lexington, Ky., the issue of price just keeps coming back to the kind of client a practice wants. "If you position a practice to be price-sensitive, competing with other practices on fees, then those are the kinds of clients you'll get-price-sensitive horse owners," he says. On the other hand, numerous studies put price as the No. 7 or No. 8 reason why owners choose (and stay with) a veterinarian, Dr. Blach says. "Horse owners consider competence, communication, professionalism, and ethics more important than price."

Communicate value

The fact that clients value such qualities so highly could be one reason that community doesn't influence fees as much as you'd think. Howard Rubin, CEO of the National Commission on Veterinary Economic Issues, says there are practices in less affluent areas charging and collecting more for their services than practices in more affluent areas. How do they do it? "Successful practices communicate the value of their products and services along the way," he says.

If you do this well, you won't end up presenting a bill that shocks the client, which can put you on the defensive. "I'm not talking about salesmanship," Rubin stresses. "The issue is to make sure your client understands everything that goes into the services you're providing, so he or she appreciates the value you offer."

The heart of the matter

Dr. Jennifer Baker, who practices at Equine Associates LLC in Hawkinsville, Ga., says every veterinarian is faced with a different situation, but good business practices are good business practices, no matter where you are. "People will haul a couple of hours to see us because they know we provide an exceptional level of veterinary care, and because we care about our patients and clients."

Veterinary Economics Editorial Advisory Board member Dr. Lydia Gray, MA, is the executive director of the Hooved Animal Humane Society in Woodstock, Ill. Please send questions to ve@advanstar.com.