Small changes make a big difference to your bottom line (Proceedings)

Small changes in how you practice, or in how you run your business, can have a dramatic impact on your earnings over a lifetime and in keeping you and the profession economically strong.

Most practicing veterinarians want to be compensated at a higher level of income. The only way to really generate more revenue is to increase the number of patients we see per day and/or increase the average charge per patient. The AVMA-Pfizer study (JAVMA, Jan 15, 2005) reported the most common way veterinarians have increased their income over the past 5 years was to raise fees and increase the average charge per case seen. If the typical small animal veterinarian were able to increase the number of transactions per year (increase efficiency) from 4,000 to 4,500 and to increase the average doctor charge per case seen (increase quality of services) from $117 to $125 the net result would be an increase of gross revenue from $468,000 to $562,500. You may now be asking how can I see more cases? How can I increase the quality of my services?

For each of us to see more cases, we need to increase the number of cases per day by increasing revisits and new cases. This is possible through a good marketing plan and through increasing efficiency. More cases may be available through expanding hours slightly to allow an earlier drop-off time and staying open until 6:30 p.m. to allow a later pick-up time. Drop-off cases allow you to work on these cases when time is available during the middle of the day. Increasing the revisit rate is possible by increasing the follow-up on cases that need to be re-evaluated by making the re-visit appointment prior to the client leaving the practice. Most cases should have a re-appointment, recall, or recheck put into the database before the client leaves.

Allowing clients to make appointments on Saturday will also increase visits as most clients work 8-5 Monday-Friday. The important factor in scheduling is to limit the number of scheduled hours for each veterinarian to 45 per week. If the practice has 3 or more DVMs, the length of the work week can be kept reasonable. If the practice has 2 or less DVMs, then adding hours may only make a longer work week. In this case, the practice owner(s) should consider how the practice might be able to merge with another area practice to obtain at least 3 DVMs in the practice.

Banfield has been evaluating efficiency in their 750 practices and has found that 4 veterinarians in a practice allows a reasonable 40-45 hour work week and quality of life while covering a 7 day work schedule. Quality of life for the veterinarian usually involves the following 4 areas: practicing high quality medicine, receiving an income that is commensurate with other similarly trained professionals, having a work schedule that allows a life outside of work (40-45 hours per work week) and developing a healthy investment/retirement program.

All of these goals can be met if the practice owner can become efficient in his/her practice life. The length of the work week must be reasonable and the practitioner must work efficiently for both quality and income requirements to be met. Too many practitioners are still working too many hours and spend too much time doing work that can be delegated to a high quality staff.

The areas that should be considered to improve efficiency include: multitasking (seeing more than 1 patient at a time); delegating duties to qualified staff; using incentives to pay people; encouraging the use of pet insurance and wellness programs; recommending at least 2 visits per year for each pet; using electronic communications effectively; organizing the pharmacy so prescriptions of commonly used drugs are prepackaged/precounted; restricting the work week to 45 hours and keeping medically current through seminars, on-line programs, printed material and interactive labs.

Let's briefly review each of these areas to improve efficiency. The first area is being multitask oriented. To really use multitasking to the fullest, a minimum of 2 examination rooms per receiving veterinarian must be available. To be able to increase the quality of service and still see more cases, one must be able to move between 2 exam rooms and spend a quality 10-15 minutes with each client/patient. The only way to do this is to be able to delegate to well trained and knowledgeable staff. To delegate one must be willing to allow staff to do those things they do well (other than diagnose, prescribe, make a prognosis, or perform surgery).

By delegating, the client/patient receives your undivided attention during the diagnoses, prognosis, and prescribing phases on the case. Then the staff can become involved in the documentation, treatment, educations, etc. of the visit while you move to the next exam room to see the next patient. This process works similarly to how the dentist practices except the dentist may be working in 4 or 5 rooms at once. To facilitate the examination process through multitasking, it requires some practice and close supervision of the staff at first. Most veterinarians are trained to focus on the complete service of one client/patient at a time without taking into account the use of support staff. Multitasking also requires the use of at least 2 examination rooms for each veterinarian. In a typical 4 person practice, the minimum of 4 exam rooms would be required (6 would be better) as usually only 2 veterinarians would be receiving at any one time (one person would be doing treatment/surgery while another may be off). Mastering the proper use of support staff and working two to three exam rooms at a time is vital to improving efficiency.

The examination room technician or assistant should place the client and patient in the exam room. Then the technician should start to obtain the history, start the medical record, and start the physical exam (temp, pulse, respiration). At about this point, the veterinarian should be present to continue and complete the history and physical examination. After the veterinarian has determined the diagnosis or treatment plan, then the technician can complete the experience by explaining the course of care, follow-up plans, medications, etc and escort the client to the dismissal area. The examination room is then cleaned and the next client is placed in the exam room while the veterinarian is making a diagnostic/treatment plan with a patient in the 2nd exam room.

To improve the efficiency of the examination process, a veterinary assistant is very useful to help both the veterinarian and the technician in patient restraint, cleaning the room and assisting with medications and treatments. This team of 3 people can easily work 3 examination rooms while providing high quality communications and patient care.

The use of an incentive plan to compensate both professional and support staff can be beneficial in most situations. However, the use of incentives can be a negative when not administered in the right way. Accounting for the specific services provided by each person is sometimes a challenge and everyone needs to know which hospital services are exempt (i.e. boarding, pet food, non-doctor ordered refills, etc.). It is common to pay veterinarians 18-25% of gross and to pay each technician a competitive salary plus 0.5% of practice gross income. Incentives in industry have worked well in most applications and will work to improve efficiency and quality in veterinary practice.

The acceptance of pet insurance and wellness programs into our profession will allow a higher level of care to be provided in most situations. The use of discount programs is probably not a wise way to go, as our net profit is usually in the 28%-38% range and providing a discount to the client usually makes us work harder for less money. However, the use of pet insurance allows the client to have a higher level of care provided when the insurance is paying for 80% of some of the services.

Recommending physical examinations twice per year per patient will increase the quality of service and re-visit rate. If clients understand that pets age 7-9 times faster than people, then this will make sense to them. Several commercial companies are trying to support this approach through institutional advertising. Our job is to educate the client on how we can improve the quality of life for their pet by visiting us twice per year.

Using electronic communications will improve our efficiency through electronic medical records, reminder systems, and personal communications. This area of efficiency will continue to develop as we all learn how to make better use of our management software and the Internet. This will require us to continually change our approach to effective communications.

Improving the way our pharmacy functions will improve our service to the client in that we will be able to provide prescriptions faster and more accurately. The use of precounted vials of commonly dispenses items that are ready for a label will speed up the dismissal process. In addition, counting items away from the pressure of the waiting client will improve accuracy. A well organized pharmacy will help everyone function better as it is an important profit center.

The last areas to consider in improving our efficiency deal with restricting our work week to 45 hours and trying to keep current through various forms of continuing education. We will make better decisions more quickly when we are rested. We can all work extended hours (12-14 hour days) when necessary, but repeated use of these hours will usually lead to "burn out". To prevent practice and life burn out, restrict work hours to reasonable periods and schedule short time-off periods and vacations into your schedule for relief and recovery. Most veterinarians love what they do, so to keep us refreshed, build time away into the schedule.

Keeping up-to-date with the ever-changing new information requires planning and scheduling too. Continuing education is available on about any day of the week and in any location. The most efficient form of CE is found on the Internet where you can get new information without leaving your practice or home. However, "hands on" CE has become more popular and requires a trip to a national, regional, or local veterinary school location. Using the most current information is a moral, ethical, and legal requirement today.

The subject of efficiency is difficult to explain and outline on paper as we all have different ways of getting the job done. More veterinarians everyday are learning how to get the job done easier and more efficiently while earning a better income. We have raised the level of service to our patients and clients and now we are learning how to improve our delivery of service to improve our own well being.

One way to identify areas for you to work on and track your progress is to compare your practice metrics against others. Industry has been doing this for years. They look at the competition and compare themselves to the best performers and analyze the differences. What is working and what isn't? What things need to be changed to make the business, product or service better?

In veterinary medicine, we have been trying to compare ourselves to one another for years, but without using established reference points or benchmarks. Now we have a chance to do some real benchmarking through the use of the National Commission on Veterinary Economic Issues web-site (www.NCVEI.org). The purpose of the NCVEI benchmarking project is to determine what points of reference are important to a successful practice and what specific values are needed for success. The largest study is focused on companion animal practices, but equine practices, food animal practices, specialty practices and teaching hospital practices each have their own data base and are included. There are currently 38 different tools available. The current data pool of veterinary practices is over 14,000 practices (39,000 DVM's). All data is "real time" and is updated every 24 hours.

NCVEI was formed by the joint efforts of the American Veterinary Medical Association, American Animal Hospital Association and American Association of Veterinary Medical Colleges. The addition of corporate sponsors helps maintain the website and the daily activities of NCVEI. The purpose of NCVEI is to improve the economic base of the veterinary medical profession, ensuring that the delivery of veterinary care and service meets the needs of society.

The NCVEI benchmarking model is very easy to use and the results are immediate. Comparisons are available for many of the key metrics in your practice—revenue, transactions, ATC, client numbers, profitability and more. The next question you will have is: What do I do with this new information? How do I use it to improve my practice? When you complete a tool in the model, you will have a chance to ask for a "treatment". Click on to the recommended treatment button and the analyzed data will be reviewed with suggested treatments.

The model is very user friendly and can provide immediate help to the user. The more people who enter data into the system, the more valid the results and recommendations will be. The sooner we start the sooner changes can be made and practice finances can be improved. One of the best parts about this whole project is that it is free to the user thanks to the generosity of our founding organizations and corporate sponsors.

Each veterinarian will be able to interact with the model as often as they want and as superficially or as in depth as they want. Not all practices will be able to provide all the information which will be asked but everyone will share in the results and treatments. However, the hope is everyone will be encouraged to collect more practice data as time goes on so the model will continue to provide new levels of information. The input data can be collected from computer management reports, CPA reports, personal records, IRS returns, etc.

Quality patient care requires a sound economic foundation. Quality patient care can result in a quality financial bottom line. It is quite possible to be both an excellent veterinarian and a successful business person. Do yourself and the profession a favor and starting to use or continuing to use the NCVEI benchmarking model at www.NCVEI.org. now!