It’s time to rethink the way we conduct business in our veterinary practices. Times have changed and practice owners and managers must seek new ways to meet the needs of pet owners, while at the same time ensuring that their businesses remain profitable. One of the most critical elements of this change is the creation and active dissemination of a written financial policy that defines a practice’s payment options. Only 52 percent of veterinarians report actually having a written financial policy1, and we have done ourselves no favors by making the discussion of payment as difficult and uncomfortable as possible—in most cases leaving our front desk people the miserable job of trying to obtain a payment or deposit from a pet owner with little or no funds. They must then scurry off to get someone “higher up” to handle the situation, which eats up time and energy. Even if that policy has been written, many employees and clients have no idea what it is, although they know it has been disregarded often enough to realize it has little meaning. Consider how much simpler things would be if payment options and expectations were part of the appointment process. At that time, pet owners should be asked if they are familiar with the practice’s policies. If not, the policy should be sent to them, either by snail mail or email. This makes it clear that your practice takes payment at time of service seriously, while also providing pet owners the opportunity to make sure they can provide payment in accordance with your policy—a win-win situation. The argument that it is rude or presumptuous to direct clients to your practice’s written payment policies does not hold water. It is business, just as it is to have clients sign this policy on an annual basis and to make sure the details are incorporated on all written and Web-based marketing materials. What Owners Want Pet owners have spoken, and they are looking for affordable solutions to quality care for their pets.2 An openly publicized payment policy provides the perfect medium to address and promote any alternatives a practice chooses to offer. The most obvious of these is third-party financing, such as CareCredit and ChaseHealthAdvance. If a client is concerned about the ability to pay, openly offering this information provides an opportunity for him to apply and determine eligibility before seeking services. With a 19 percent mean increase in veterinary spending by card holders versus non-card holders3, there is also tremendous potential value in a policy that suggests all clients apply for third-party financing, regardless of current need. With this safety net already in place, financial considerations become less a determining factor in the face of illness or injury, or even when deciding whether to delay important preventive care services such as blood screening and dentistry. A practice’s payment policy is also the place for offering a specific pet insurance recommendation. Even though pet insurance does not directly affect payment to the veterinarian, the fact that policyholders schedule 40 percent more veterinary visits, and spend twice as much as non-policy holders over the life of their pets4, should be enough incentive for a practice to do its homework and align with a provider of its choice. Having brochures from several pet insurance providers in the lobby, or telling clients to look online, is not an active recommendation. Considering that veterinarians have seen a 43 percent net increase in owner interest in pet insurance5, as well as the fact that 64 percent of pet owners cite their veterinarians as their most trusted source of information6, this is an incredible growth opportunity for practices willing to make a recommendation. Exploring Other Options There are other potentially viable payment options for veterinary practices to consider. When it comes to preventive health care, many practices are looking to incorporate wellness plans, billed in monthly installments, as a profitable means to increase visits and improve care. Basically, these plans amount to prepaid basic health care. Practices can customize these plans and choose a pricing structure, but the value to the pet owner remains the same—the reassurance of being able to provide optimum pet care via an affordable monthly payment deducted from their checking accounts or credit cards. If your practice offers these plans, a written payment policy is the perfect way to provide the information and details to current and new clients alike. And this is definitely something you want to let people know about, as it can be a successful differentiating factor used to attract new clients. In-house financing and layaway plans are two other options worth considering as a means to increase pet owners’ ability to provide care without jeopardizing practice profitability. While there are logistical considerations to manage, the simplest and safest solution is for a practice to align itself with a professional loan-servicing company that can provide a guarantee that their forms and protocols are in compliance with all laws and regulations. When it comes to deciding who is eligible for extended payment terms and who is not, the decision should be based on a defined business strategy and then on criteria that are consistently applied to all applicants. Consider these two options from a strategic standpoint: • In-house credit may enable clients who are able to make payments, but who don't qualify for third-party financing due to a low credit score, to provide critical care for a sick or injured pet. Practices interested in offering in-house financing must be willing to take steps to decrease risk, such as requiring a minimum deposit of 50 percent, charging resonable interest (to cover risk of non-payment), and keeping repayment times to six months or less. • Layaway plans can be the perfect savings solution for procedures such as dentistry, where there is less urgency for immediate care. Once all, or a certain percentage, of the estimated cost of care has accrued, the pet is eligible to receive treatment. Times are tough, with fewer pet owners having the ability to pay in full at the time of service, and fewer practices having the cushion to absorb the risk of non-payment. While this further highlights the need to be upfront and direct with written payment policies, it also presents a business opportunity for practices willing to respond to pet owners’ interest in the ability to pay for care over a period of time. When all team members, regardless of position, walk the talk and commit themselves to a policy of “no exceptions,” a well-defined payment policy can be an excellent tool for increasing compliance, while reducing anxiety and misunderstanding for both clients and staff. When that policy is taken a step further and includes information on payment recommendations and options, it becomes an equally lucrative tool for improved practice performance. Jessica Goodman Lee is a certified veterinary practice manager. She has been a member of the Brakke Consulting team since January 2011. Before that she spent 13 years as the hospital administrator for several large veterinary practices in Minnesota, North Carolina and Texas. FOOTNOTES 1. 2011 Bayer Veterinary Care Usage Study 2. 2011 Bayer Veterinary Care Usage Study 3. 2011 Impact of CareCredit Payment Plans on Veterinary Hospitals 4. 2006 VPI Pet Owner Study 5. 2011 Bayer Veterinary Care Usage Study 6. 2011 Pet Owner Survey, American Pet Products Association, p. 116.
