Millennials As Your Employees, Part III

Millennials is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association. 

Millennials #6We are sharing our thoughts on this topic with our blog readers in 8 easy-to-read chunks. In former blogs we described ten characteristics of Millennials that may help you in understanding these young people.

In the last two blogs, we have discussed four dimensions that impact on how Millennials might play out as employees in your practice. We continue that discussion with two more dimensions:

5. Millennials Champion Health and Fitness – Even in Their Veterinary Work.

New businesses are being created and new products are available that vet erinarians can offer their clients, largely as a result of Millennials’ interested in health and fitness.

One example is the rapidly expanding Healthy Pets stores founded by Julie Cantonwine  Her business offers products that are free of byproducts, pesticides, chemical preservatives, and artificial colors.

6. Millennials Want a Good Workplace Fit.

Management consultant Jay Deragon, suggests that employers be ready for seven questions that Millennials pose when looking for a place to work:

How Diverse Are You?

What Impact Are You Making?

Do You Have A Sense of Community?

Are You Flexible?

Will I Be Able to Grow and Learn?

Will You Encourage Me to Build My Network?

Do You Have an Open and Understanding Workplace?

In the blog that follows we will discuss how characteristics of Millennials play out as your customers.

That’s it for today.

~ Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter.

“Like” us on Facebook.

Milliennials Are Your Employees, Part I

Millennials is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association. 

We are sharing our thoughts on this topic with our blog readers in 8 easy-to-read chunks. In our last two blogs we described ten characteristics of Millennials that may help you in understanding these young people.

In this blog we begin a discussion of how these Millennials might play out as teammates in your practice, discussing two dimensions.

1. Millennials Bring Their Comfort With Technology to the Practice.

When I visited Dr. Susan Morizi’s brand new Village Veterinary Hospital in La Jolla, CA, she told me about the state-of-the-art equipment she was able to install. Then she proudly added, “And I have young staff that can explain the technology to me.”

Clearly, it’s often the Millennial who persuades the owner to invest in software to maintain Electronic Medical Records or Customer Service Management. While this is clearly a convenience for staff, it also becomes a major benefit for the clients with easy access to vaccine certificates and health histories, as well as upcoming appointment reminders and online scheduling. The Millennial staff member will likely champion and manage this software, as well as the use of social media.

Video has become an important part of the technical scene. Besides taking and sending photos to clients or posting on Facebook, Millennials are comfortable with educational videos as an important resource for educating staff members as well as clients.

2. Millennials Want to Play Out their Values in Their Veterinary Work.images

Most veterinary staff describe their career mission as protecting the life of animals – a responsible act close to their values. This provides no conflict for Millennials.

As for the interest among Millennials in giving back to the community, Hauser says that one of the things she loves about this generation is their passion for improving our world and their commitment to service. Many practices have within their staff Millennials interested in spearheading charitable events.

A good example is that of The La Jolla Veterinary Hospital which sponsored an event called “Paws and Pints” with the La Jolla Brewery, located next door. The money raised benefited Friends of County Animal Shelters. Stephanie Coolidge, Practice Manager, reported that it was a satisfying experience for the staff, raised money for a good cause, and drew a lot of Millennials to learn about the Hospital.

Hauser references the book fair their Cold Creek Veterinary Hospital in Aurora, CO organized. The money raised was donated to house the pets of women who were abused and could not take their pets with them to the shelter for battered women.

Amanda Donnelly, DVM, MBA, owner of ALD Veterinary Consulting, has observed certain skepticism among Millennials, related to their commitment to being responsible. She notes that they might skip a protocol if they don’t understand the reason for it. They want to be sure that the action is not just to generate money but is in the best interest of the pet. For example, she observed a Millennial questioning the promotion of a pet food until he understood its nutritional value.

In the blogs that follow we will discuss more on how those characteristics play out as your teammates – or your clients.

That’s it for today.

~ Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter.

“Like” us on Facebook .

Milliennials As Your Employees, Part II

Millennials #5Millennials is the topic of our article in the January issue of Trends Magazine  published by the American Animal Hospital Association. 

We are sharing our thoughts on this topic with our blog readers in 8 easy-to-read chunks. In former blogs we described ten characteristics of Millennials that may help you in understanding these young people.

In the last blog, we discussed two dimensions that impact on how Millennials might play out as employees in your practice. We continue that discussion with two more dimensions:

3. Millennials Impact the Practice’s Work Style

Young employees need direction. Mary Beth Albright, owner of a dog boarding facility in Florida, called Millennial employees “diamonds in the rough.” Even after 60 days in her employ, she says they are still asking, “What should I do?” Her solution: First, give them a giant baby-sitter; be sure you have a mother as their manager. Second, get into the mind of your young hires. She tells the story of a young employee who was asked to print the organization’s newsletter. When Mary Beth expressed her disappointment that it had been printed in black and white, the Millennial explained that she was trying to save money. Mary Beth realized that her new hire had good intentions but needed some training in how and when best to save money.

Millennials need to be needed. Human Resource specialist Frankie Williams   also finds these young employees to be “diamonds in the rough.” They may be self-centered and demanding, but they are smart, she says. Like anyone, they want to be needed and valued. As the Human Resources Director at Crown Veterinary Specialists, she got to know the young people on the staff. One young woman, for example, had some ideas often regarded as “out there.” But as a tech savvy Millennial, she found an app that enabled her to discover that the veterinary practice was not capturing costs as they should. Her discovery resulted in saving the practice money and in helping her managers value her contributions. She got the “pat on the back” she sought.

These “trophy kids” are capable and thrive when motivated. What’s unknown is how they will deal with failure – something for veterinary supervisors to keep in mind.

Unlike members of the “latch-key” Generation X cohort who learned to be independent and operate without a lot of feedback, the Millennials typically want feedback (“pats on the back” are the best) and “hanging out” together. Fortunately, veterinary practices usually have some tasks that staff members must complete alone and others that will benefit from collaboration.

4. Millennials Seek to Balance Their Work with the Rest of Their Life.

Consultant Wendy Hauser has noticed that many Milliennals want to be “out the door when their shift ends.” Eager for a life beyond work, some Millennials don’t want to miss out on social activities with friends, even when they conflict with work.

Williams discovered this to be a common problem in her New Jersey practice during the summer when many Millennials called in sick in order to join their friends at the beach. To address the problem, the hospital instituted a summer bonus plan, providing an extra stipend each pay period for employees who worked their allotted schedules with no time off.

In general, Williams found that Millennials are willing to work hard when they are scheduled, but want time for family, fitness or past-time activities that interest them during their off time. They like to know their work schedule in advance, so they can plan social activities with their friends. “They want a life,” she says. “In fact, working with Millennials has taught me about living.”

Dr. Erin Epperly, a Millennial who is an associate veterinarian at Peak View Animal Hospital in Fowler, CO said, “We do have a strong work ethic. We can work hard when we’re there (at the clinic) and play hard when we’re not.”

In the blogs that follow we will continue our discussion with two more characteristics that play out as your teammates.

That’s it for today.

Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter.

“Like” us on Facebook

Characteristics of Millennials, Part II

Characteristics of Milliennials, Part IIMillennials #2

Millenials is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association.

We are sharing our thoughts on this topic with our blog readers in 8 easy-to-read chunks. In our last blog we began describing five characteristics of Millennials that may help you in understanding these young people. In this blog, we describe five more.

But first, a caveat. Individuals differ, of course. Subcultures of racial groups and economic groups also exist. This means that observers who cite characteristics may actually be considering only whites, or Hispanics, Blacks or Asian young people. They may be considering only middle-class folks as those defining the generation. In spite of stereotyping or gross generalizations, however, there is often truth in the claims. With this caution, we share with you some of the characteristics that have been noted and let you decide if they give you insight to customers or colleagues you know.

Part II: Five More Characteristics of Millennials

6. “Pragmatic idealist”

This is the term that David Burstein, a Millennial himself, used to describe his generation. In his book, Fast Future, Burstein described what he saw as a deep desire to make the world a better place combined with an understanding that doing so requires building new institutions while working inside and outside existing institutions. Perhaps his term captures both the optimism of Unger and the critical view of Twenge, as discussed in our previous blog.

7. With Great Expectations

Some have termed this group “the trophy generation” in response to the “everyone’s a winner” mentality. Their parents were told to boost their children’s self-esteem. Brenda Beckett, SHRM-SCP-SPHR, Human Resource Manager at Omnitracs, says, “This group of employees want immediate feedback. They want to know how they are doing and they expect little nudges and high fives. Gone are the days of the annual review. You need to constantly engage with Millennials.” She tells a story of a manager who thought his Millennial work was exemplary and she left him alone. The truth was, the employee was bored, and he moved on.

8. Working to live (not living to work)

According to a 2009 online survey conducted by Monster.com, 37% of employers report that “work/life balance and flexibility” is the most motivating factor for this group, with only 17% claiming “compensation” as the primary driver.

Beckett explains that, unlike her generation that wants flexibility in order to be with their family, this cohort wants flextime for themselves – to “go surfing in the morning, if the surf is high, or go to a yoga class mid-day or mountain biking before dark.

9. Committed to Health and fitness

Evidence of this group’s interest in healthy living is the “explosive” demand experienced by Whole Foods Market for natural and organic food, especially among the Millennial generation. The chain is so certain of this Millennial market that it has plans to launch a new tech- and value-oriented store concept. They will enter into partnerships with the internet-based grocery delivery system, Instacart, and with Apple Pay, the mobile payment service that allows users to make payments using the iPhone or Apple Watch. This is all in an effort to court the Millennial generation.

The growing fitness industry has expected the Millennial generation to accelerate the trend toward fitness. It has discovered that while committed to fitness, Millenials are redefining what personal fitness means and migrating into exercises such as cycling and aerobics, usually done in groups, where everyone helps to push other group members to do their best rather than compete.

10. Short of cash

This is the group that experienced the crash of 2008 and high student debt. Many are still unsettled in their careers. It’s not surprising, therefore, that this generation is delaying home ownership – renting for six years before buying, which is 2.6 years longer than a similar group in the early 1970s, as reported in San Diego’s U-T newspaper article,  “Millennials Putting Off Buying First Home,” Aug. 18, 2015.

A review of these characteristics can help your practice understand its younger team members and millennial clients.

In the blogs that follow we will discuss how those characteristics play out as your teammates or clients.

That’s it for today.

~ Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter,

“Like” us on Facebook.

Characteristics of Millennials: Part I

Characteristics of Millennials: Part IMillennials #2

Millennials is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association.

We are sharing our thoughts with our blog readers in 8 easy-to-read chunks. This is our second in the series.  We begin in this blog and continue in the next by describing some characteristics of Millennials that may help you in understanding these young people.

Of course, individuals differ. Subcultures of racial groups and economic groups also exist. This means that observers who cite characteristics may actually be considering only whites, or Hispanics, Blacks or Asian young people. They may be considering only middle-class folks as those defining the generation. In spite of stereotyping or gross generalizations, however, there is often truth in the claims. With this caution, I’ll share with you some of the characteristics that have been noted and let you decide if they give you insight to customers or colleagues you know.

Part I: We begin by describing five characteristics of millennials.

  1. Technologically savvy  –  Millennials are considered “digital natives” – the first generation to be brought up with computers. You may have noticed that they are the early adopters and the ones that can locate and operate the technology that you need. They expect anytime/anywhere communications, as well as speed and convenience.

2. Tolerant and in support of equality –  The common wisdom is that the Millennials are more accepting of differences – accepting same-sex marriage and open to the legalization of marijuana.

When it comes to racial tolerance, however, the data is mixed. On the one hand, The Chicago Tribune, cited by Gene Demby when writing for NPR, called the Millennial generation the most tolerant generation ever. It is something that Millennails say about themselves.

On the other hand, Demby found that both black and white survey respondents said that they grew up in homes where race was not discussed at all. Furthermore, public schools are more segregated now than they were 40 years ago.

3. Globally-aware – Technology has shrunken our globe. The Millennial generation has grown up with instant, live information being available from all over the world.

Yet, this is another characteristic about which there is mixed data. On the one hand, Dr. Gamaliel Perruci, Professor of Leadership Studies at Marietta College, observes an increasing level of integration around common patterns of consumption.

On the other hand, political scientist Benjamin R. Barber points out that many Millennials around the world resist globalization and have become narrowly aligned to a parochial agenda.

4. Socially Responsible – Citing the Millennials’ experience with 9/11 and ongoing fears of terrorism, Michael Unger concludes that these folks have a desire to help others, as described in his book, The We Generation: Raising Socially Responsible Kids.

Journalist Peter Chen sees a similar phenomenon, based on a different aspect of Millennial experience – the downed economy. He has dubbed this group as “a generation of quiet rebels on the path to find a non-traditional, soul-enriching, values-fueled existence.”

5. Entitled – Contrary to glowing and hopeful forecasts for this generation as more civic-minded with a desire to help others and work toward improving the environment, Jean Twenge found evidence that many in this generation are narcissistic and self-centered with unrealistic high expectations.

In the blogs that follow we will describe five more characteristics of Millennials and how those characteristics play out as your employees, colleagues or customers.

That’s it for today.

~ Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter.

“Like” us on Facebook.

 

The Millennials Are Here: Clients and Teammates

The Millennials Are Here: Clients and Teammatesimages-5

Millennials! Millennials! Millennials! Seems we are bombarded by references to the Millennials. Who are they? And why are they so important?

This is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association.

We will share our thoughts with our blog readers in 8 easy-to-read chunks.

Simply defined, Millennials are those persons born between 1982 and 2004. They’re given the name “Millennial” because most came of age around the year 2000 – the millennial year.

Many who are our clients are under the age of 34, and many of the newest members of our teams are also of that age.

This is the year the Millennials overtake the Boomers as the largest living generation. They are not to be ignored.

Authors and demographers, William Strauss and Neil Howe, are usually credited with using the term Millennial as early as 1987, though you will also see the phrase “Generation Y” referring to this group – as different from Generation X.

It is always dangerous to paint any group with a broad stroke, but it has been nonetheless helpful to consider general characteristics of each generation as a way to understand differences. Each generation experiences “defining moments” in history that impact the thinking and actions of that generation. Each group enjoys different styles of music and entertainment that emerge on the cultural scene. Each generation faces a different economic and political climate that can affect attitudes and behaviors.

4 Generational Cohorts

Demographers and other observers have traditionally defined the generations as:

Veterans, born before 1945. These people are usually thought to be hardworking. They are savers (even hoarders) as a result of their experience with the Great Depression. During World War II, they accepted the duty that their country required.
Boomers, born between 1946 and 1964. This group includes the hippies and dreamers. They are often recognized as having brought new forms of music to popularity. Eager to change the world, many in this group ushered in social changes regarding race relations, women’s roles, and the “war on poverty.”
Gen-Xers, born between 1965 and 1981. Many of those born during these years became known as “latch-key” children, as more mothers went to work. They became independent and resilient. They lived through the 1970’s Watergate Scandal, the Three-mile Island nuclear episode, and the disaster in Chernobyl – events that may explain why observers find many in this generation to be cynical and critical of institutions (religious, corporate and governmental). With segregation ending in 1964, this generation grew up in schools that were more racially diverse than those of their predecessors, leading some observers to call them the first “color blind” generation.
Millennials, born between 1982 and 2004. Observers have identified many characteristics, sometimes conflicting. It’s up to you to consider what matches with your experience.
In the blogs that follow we will describe 10 characteristics of Millennials and how those characteristics play out as your teammates or clients.

That’s it for today.

~ Carolyn and John

P.S.

Leave us your comments

Sign up to receive our blogs in your email and for our occasional newsletter

“Like” us on Facebook

Veterinarians Set Prices Using Activity-based Costing

Some Veterinarians Use Activity-based CostingBlog#4PiggyBankIn our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outline the dilemma and various resources available to practices to manage pricing. In three previous blogs we’ve outlined the challenge and described several references and continuing education resources that can be helpful.

Some veterinarians have turned to a strategy known as activity-based costing.

Activity-based Costing

Wendy Hauser, DVM and founder of Peak Veterinary Consulting, exclaims that you must know your costs before setting prices. Because each hospital is unique, she believes a study of the hospital’s unique costs is more relevant than looking at what other hospitals charge.

This means that practices must do the hard work of what is known as “activity-based costing – reminiscent of the “time and motion” studies done in the 19th century by Frederick Taylor, who recorded the time required for a given task, and Frank Gilbreth, who analyzed the work process.

Hauser suggests starting by looking at “turnkey” costs. What are the fixed costs of turning the key to enter the practice every day? This means knowing the cost of items such as rent or mortgage, taxes, insurance, and labor. She’ll add in everything except inventory and doctor’s costs. In The Veterinarians’ Guide to Healthy Pet Plans, which Hauser authored with Debbie Boone, BS, CCS, CVPM, she outlines how you can use this data to calculate the cost per minute of a given service, like blood work. This is far more precise than merely taking the blood work panel cost and tripling it, which is what many practices do. The analysis of prices then turns to a focus on a metric called “annual revenue per patient.

Lindsay Peltier, LVT, is the Hospital Administrator at Centerville Animal Hospital in Chesapeake, VA.  She is one veterinarian who attempted to determine all of her costs. She says:

“We developed a program in Excel that allowed us to calculate to the penny what a service costs our practice and then to assign a profit margin that allows for growth…. If a client asked for a discount, we typically responded with something along the lines of “Mrs. Client, our prices are based on what it actually costs to provide this service, and the discount you are asking for would put us in a position where we would receive less than the cost to our practice to perform Fluffy’s electrocardiogram. We do, however, have some other options we can discuss.…When clients ask for a discount, we know that they are venting their frustration…. By knowing the real costs, [our staff members] can speak with confidence. Our program in Excel prepared them for the conversation.”

When Julie Breher, DVM, purchased the La Jolla Veterinary Hospital in La Jolla, CA,  she wanted this kind of detailed information, so she hired consultant Terry Roberts, BS, DVM, of LAJ, Inc. to assist her. They began by getting the inventory costs under control. Roberts provided the staff with equations that assisted them in making appropriate updates efficiently. Then they set about analyzing services. Breher and her staff calculated to the minute what procedures cost, taking into consideration all costs, including rent, water bills, salaries and supplies. Sometimes she compared her prices to recommended fees in AAHA’s Fee Reference Guide or published veterinary salaries. With that information she then felt confident in providing a treatment plan with a fair price.

 A new service that can assist practices gathering this kind of information is Profit Solver®,  based on software developed by Fee Technology. Profit Solver® and Fee Technology work in partnership with Zoetis, which markets this service. They bring technology to activity-based costing.

The Profit Solver® lists about 80-90 different services offered by 90% of practices. The software then enables your clinic to insert your own data. At the end of the analysis, Profit Solver® provides your practice with a Price Adjustment Worksheet and works with your staff in a Price Strategy Session. There they will consider which services are competitive (like your exam fee, vaccines, routine labs, spay, or heartworm prevention) in your practice’s area and which are not.   Some items will admittedly be a loss leader, meant to bring recurring business. The intent is to provide you with information to make better pricing decisions, identify profit leaks, and to know what is profitable and what is not. The outcome is a more accurate and informed list of costs. The practice knows the exact profit or loss in each fee charged and can make informed decisions. Then the practice adjusts its costs with known data. To date they have helped about 1000 (of the 23,000) practices in the U.S.

One of those practices is the Dublin Animal Hospital of Colorado Springs, CO, owned by Marcus Roeder, MBA, CVPM, who also serves as a professional pricing strategist for Profit Solver®. As opposed to across-the-board pricing increases, he finds this activity-based costing method to be more rational. He worked with the Dublin staff for two-to-three months, getting “deep into the weeds,” he said. At times, they found the data overwhelming, but they learned a lot. In the process, he got buy-in from the staff, and now, instead of traditionally emphasizing the cost of inventory, the staff sees that the biggest cost of the practice is its people. Knowing and appreciating what everything really costs, the staff is no longer inclined to want to discount services.

Sacramento Animal Hospital, in Sacramento, CA also has used the services of Profit Solver®. Prior to using the service, the hospital had relied on a straight percentage markup by individual category. After analyzing 74 services, they understood which services were profitable and which were not and where markups were appropriate. They made 21 price adjustments, and realized a new annual profit of $100,362. The hard work was worth it.

External Consultation

Depending on the skills and experience of your internal staff, you may find it useful to go outside for consultation. Boone, BS, CCS, CVPM, of 2ManageVets works with practices using a blend of fees suggested by Benchmarks, The Veterinary Fee Reference and the fee survey from the Veterinary Hospital Managers Association along with overhead and competition. Louise Dunn, of Snowgoose Veterinary Management Consulting, directs practices to discussion boards where sharing among veterinary professionals is encouraged. She also suggests you look at what pet insurance companies pay for reimbursement. This will give you ideas about what is being charged across the country.

Hauser recommends you work with a CPA who specializes in the veterinary industry. Roeder recommends a consultant who is a CVPM. VetPartners.org is a useful place to find a consultant.

That’s all for today.

Check in our next blog for discussion of special circumstances when setting prices for pharmaceuticals.

Or read the entire rticle in Trends Magazine.

John and Carolyn

Leave us your comments.

Sign up to receive our future blogs and occasional newsletters.

“Like” us on Facebook

Continuing Education to Help Veterinarians Set Prices

Continuing Education To Help Veterinarians Set PricesBlog#3Puppy

In our article, in the December 2015 issue of Trends Magazine, published by the American Animal Hospital Association we outline the dilemma and various resources available to practices to manage pricing. In previous blogs we’ve outlined the challenge and described several reference materials that can be helpful.

We continue to describe resources – specifically continuing education courses.

In addition to reading books, some veterinarians have turned to continuing education opportunities:

One course that can help practices gain professional pricing skills is the Veterinary Practice Management Program at Purdue University’s College of Veterinary Medicine. It’s a graduate-level “mini-MBA” type program, offered in West Lafayette, IN in three days (Friday-Saturday-Sunday). Its four modules, one of which covers pricing and financial management, lead to a Veterinary Practice Management Program Certificate.

AAHA offers the Veterinary Management Institute, in collaboration with the College of Business at Colorado State University.  Courses are offered during three in-person sessions (spring, summer and fall) and online sessions between the in-person sessions. While the program covers a multitude of veterinary leadership issues, one important module is related to financial management.

For those looking for an exclusively online learning opportunity, Joel Parker, DVM, who owns Veterinary Practice Solutions, offers a two-day workshop delivered in webinar format entitled “Online Practice Profit Builder Workshop.” Participants gain tips and tools to locate where they are losing profit and what to do to fix it.

James. F. Wilson, DVM, JD, offers concrete pricing advice through his course, “The Principles of Cost Accounting and Establishing a Realistic Fee Schedule.” Of course, you can’t list every component of a service’s cost on the invoice, he says, but the ancillary and overhead costs must be recovered. You must know what those costs are. Too often, he says, a surgery charge covers only the doctor’s time. Forgotten is the pre-anesthetic drug, the monitoring, the IV catheter, the fluid, the operating room expense, surgical packs, gown, mask and towels, suture material, recovery care, and on and on.

That’s all for today.

Check in on our next blog where we will outline the strategy of “activity-based costing” and how it can help you set and manage your prices.

John and Carolyn

Leave us your comments.

Sign up for future blogs and occasional newsletters.

“Like” us on Facebook.

 

Three Resources That Help Veterinarians Set Prices

Three Resources That Help Veterinarians Set PricesBlog#2 Cat

In our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outline the challenge veterinary practices – and other businesses – face in setting and managing pricing. In a previous blog we outlined the dilemma. Here we outline several reference materials that can help.

1.Benchmarks: A Study of Well-Managed Practices 

This resource has been around since 1986, published by Wutchiett, Tumblin and Associates, veterinary management and valuation specialists. As the professionals at Wutchiett Tumblin and Associates interacted with veterinary practices across the U.S., it became obvious that the key to a successful practice started with good management, and so their annual study focuses on practices that are deemed to be well-managed.

By exploring how these top-notch performers set fees, bring in revenue, manage expenses, and generate profits, practices can have the information they need to emulate the success of these well-managed practices.

Each year Wuchiette, Tumblin and Associates study and compile veterinary benchmarks and trends from what they identify as the top 100 well-managed practices across the country, scrutinizing each practice’s financial data and strategies in the areas of fees, earnings, expenses, and technology.

Denise Tumblin says that they survey 200 fees. By identifying a given practice’s exam fee, they use a ratio and determine the other fees. The result is a useful resource to help you know what your competition is charging.

  1. The Veterinary Fee Reference, Veterinary Fee Reference, 9th edition, published by the American Animal Hospital Association

Published by the American Animal Hospital Association, the Veterinary Fee Reference, now in its 9th edition, is a reference to help practices set fees that are correct and competitive for their market.

It includes fees for more than 450 services and nearly 700 tables with data on discounts, vaccination protocols, time scheduled for procedures, as well as ideas for how the practice can best use the information to price services correctly for a specific market, practice philosophy and size.

It presents the average fee — as well as median, 25th and 75th percentiles — to illustrate variability and give a clear picture of how to compare with other practices serving clients of similar income and demographics in comparable areas. Practitioners can find out if their fees are too high or too low and how to set the price for a new service in their market.

Also useful is information about the average percentage mark-up for outside laboratory tests, the average percentage increase for specific profit centers, and information on how often fees should be reviewed and updated.

Members of the Canadian Veterinary Medical Association have access to the CVMA fee guide, which provides similar information.

  1. The Nationwide-Purdue Veterinary Price Index

This resource published its inaugural report in January of 2015. It provides an initial high-level view of pricing for veterinary services. Future releases of the Nationwide- Purdue Veterinary Price Index will not only track national trends in pricing quarterly, but will also drill down into the data from millions of VPI claims from Nationwide policyholders to examine other trends in veterinary pricing. The national pricing index will be released quarterly at NationwideVetChannel.com, with links shared through social media.

That’s all for today.

Check in for our next blog where we will describe some of the continuing education courses that can help practices manage the challenge of setting prices.

John and Carolyn

Leave us your comments.

Sign up for future blogs and occasional newsletters.

“Like” us on Facebook

 

How Does Your Veterinarian Practice Set Prices?

How Does Your Veterinarian Practice Set Prices?Fees, wBlog#1

How are the prices set at your veterinary practice? Maybe the practice inherited a fee schedule when the new owner came into the practice. Perhaps prices are set by researching other practices in the area. Maybe the owner adjusts prices based on how clients perceive the value of service or what “the market” is willing to pay. If yours is the only practice in town offering a certain service, that might affect pricing. Perhaps some of the fees are set low to be intentionally “lost leaders.” Some practices set fees with what Jim Wilson, DVM, JD, calls a “weak pencil,” meaning that the pencil grows weak when it comes time to itemize each service and product provided, resulting in “missed charges” or discounts.

There is no “perfect price.” Each practice is unique. Therein, lies the challenge.

In our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outline the dilemma and various resources available to practices to manage pricing. This is the first of six blog posts unfolding this issue.

When it comes to pricing, Eric Jungemann of InfoMatrix, LLC puts veterinary practices into four categories:

*Those that want to establish a relationship. They assume that people will shop. They offer loss leaders in order to bring clients in to establish a relationship and then sell them on their quality service. An example is VetExPress in Colonial Heights VA and Henrico, VA that announces on its website: “$1 for new client exam. Give us a try! You’ll want us to become your veterinary partner for life!”
*Those that want to charge fair prices with no gimmicks or games. They don’t offer discounts.
*Those that have rolled their prices into wellness plans, with a recurring payment charged to the client’s credit card.
*Those that pay no attention to the business side. (They may, he says, be new to running a business.)
Although being a veterinarian is about a lot more than financial management and profitability, today’s practice understands the importance of using sophisticated tools to set prices that will be fair and will also allow the practice to be profitable.

John Grote, DVM, has been practicing veterinary medicine since 1970, and he has seen prices with wide disparity. He recalls the story broken by Time Magazine about the discrepancy in human medicine surgical fees in different hospitals and notes that the same has been true in the veterinary practice. He thinks that lots of practices set prices “by the seat of their pants.” But things are changing. Help is available.

Watch for our following blogs in which we outline reference materials available, continuing education courses, and a new service using “activity-based costing.”

Or read the Trends Magazine article.

That’s all for today.

John and Carolyn

Leave us your comments.

Sign up to receive our future blogs and occasional newsletters.

“Like” us on Facebook