Keeping veterinary drugs locked up is a sensible idea. The same goes for sending client reminders and tracking payroll expenses. And maybe hiring a practice management consultant.
But a survey conducted by two leading veterinary companies in cooperation with the American Association of Equine Practitioners found that inaction in many areas of business may be diluting the value and profits of horse practices nationwide.
“With just a few small tweaks, equine practitioners can empower themselves with new management practices and business technologies that will greatly enhance the efficiency and profitability of their practice,” said researcher Edward J. Blach, DVM, MS, MBA.
Merck Animal Health and Henry Schein Animal Health presented findings from the National Equine Veterinary Economic Study in December during the AAEP conference in Las Vegas. What the results showed was that equine practitioners don’t track revenue and expenses very well, and they tend to shun readily available management and communications tools.
Of the nearly 500 AAEP members surveyed, 97 percent knew how much total revenue was coming in, but they couldn’t provide a breakdown in most instances. Only about one-third of the respondents could specify their laboratory, imaging, surgery and drug income. Just 1-in-5 could count the number of active patients.
“Among other key findings, we were surprised to learn that only half of respondents routinely track payroll expenses as a measure of financial health,” Dr. Blach said. “Yet payroll is the largest expense category for almost all veterinary practices.”
Also unsettling was the discovery that equine practitioners used few of the 16 communications tools and 17 management tools listed.
Only 30 percent of practices use email, a telephone or traditional mail for client reminders. Co-researcher Andrew R. Clark, DVM, MBA, talked about the reminders he gets in everyday life as an example of how veterinary practices should operate.
“I know when my oil needs to be changed in my truck, when my teeth need to be looked at, when anything needs to happen,” Dr. Clark said. “They’ve done that for me, they’ve taken over my own responsibility of managing my stuff. … I appreciate that.
“But veterinarians, 70 percent don’t do that.”
While 60 percent of equine practices use email to communicate with clients in some way, “Most of them don’t have anywhere close to a full list of email addresses,” Clark said.
Seventy-three percent of practices use smartphone texting, but that poses a problem.
“Now we’re handing out medical advice via text and we have no medical record of it,” Clark said.
As for management tools, the survey identified a few troubling areas. Start with hospital pharmacies, where only 31 percent of practices lock up their drugs, protecting the inventory from potential abuse or theft.
The other 69 percent “have hundreds of thousands of dollars or at least tens of thousands of dollars worth of drugs and supplies and they don’t lock that door … for God’s sake,” Clark said.
He also noted that just 16 percent of practices craft a formal budget while 31 percent take the time to write a mission statement.
“It’s sad because those are such basic tools,” Clark said.
He suggested that practitioners get more business education in veterinary school.
“We have squeezed by putting more and more [veterinary] content into our four-year curriculum, [but] we’ve squeezed all of the business out,” Clark said. “So we know more but are good at less.”
Veterinarians can invest in a management consultant to examine the health of a practice, but only 13 percent do so, he said.
“As we would refer a sick horse to a boarded medicine person … we should refer our practice to someone who specializes in the health of the practice,” he said.
Among other findings in the economic study:
- At least 60 percent of practice owners are personally concerned about stress, retirement and financial security. Forty-two percent worry about being able to sell the practice.
- Less than half of practices compute the number of business transactions they complete, and 23 percent do not track accounts receivable.
- About 60 percent of practices operate a website or Facebook page, 82 percent offer business cards, and 24 percent do online advertising.
- 70 percent use practice management software, 79 percent accept credit cards for payment and 21 percent offer patient financing programs.
Additional details and free business advice are available at www.IsMyPracticeHealthy.com, a website owned and managed by Blach and Clark.