PHILADELPHIA (Nov. 19, 2018) – Community Veterinary Partners (CVP) is pleased to announce the launch of the CVP University Relations Initiative to further prepare veterinary students for the successful transition from study to veterinary practice. Dr. Laura Strong, a 25-year veteran of the veterinary industry, has been chosen to spearhead the initiative.
The CVP University Relations Initiative includes developing partnerships with veterinary programs at some of the leading universities, engaging student ambassadors to administer student outreach programs, offering externship and mentorship opportunities within CVP’s hospital network, and identifying new opportunities for tuition reimbursement. Through the CVP program, students will be exposed to fast-paced, exciting and true entrepreneurial work environments alongside veterinary professionals delivering unparalleled patient and client care with uncompromising compassion.
“We want to help grow veterinary learners into veterinary leaders. One of the ways for us to make an impact is to work with our university partners to offer students educational, professional leadership and career development opportunities while they are still in school,” Strong commented. “Through my years of practice, I felt it was our duty to prepare the next generation of veterinarians and am excited to be working with our hospitals and our students on this initiative.”
CVP’s mission is to be there for its clients by providing unparalleled medical care in a compassionate atmosphere so its patients can live long and healthy lives. CVP embraces the concept that clinical practices and pet care should remain with the veterinarians at the hospital level. The CVP University Relations Initiative will prepare its future veterinarians to make those decisions and deliver the highest quality of care to its patients.
“The veterinarians within our network of hospitals are some of the best in the industry. They are committed to providing quality clinical care to their patients. They are also committed to growing our family of veterinarians by preparing the next generation,” said Kevin Ruffe, CEO of CVP. “Through the University Relations program, we can begin to bring down the barriers related to the success of new graduates, including the lack of clinical experience, client communication skills and loan repayment. That’s a win-win for everyone.”
About Community Veterinary Partners
Community Veterinary Partners is a family of over 50 animal hospitals brought together to collaborate on the best way to deliver quality care to our patients and a first-rate experience for our clients. We are committed to investing in and partnering with leading hospitals, nurturing and developing the best people and providing support services that are paramount in our industry. Quality of care is always foremost and will forever remain at the hospital level with CVP. More information is available at www.cvpco.com.
PHILADELPHIA–(BUSINESS WIRE)–Community Veterinary Partners (CVP) is pleased to announce that its Board of Directors has appointed Kevin Ruffe as Chief Executive Officer, effective March 12, 2018. He will also join CVP’s Board of Directors.
Headquartered in Philadelphia, CVP manages 46 veterinary hospitals in 10 states. “Kevin’s appointment is a reflection of CVP’s tremendous growth over the past few years and more importantly CVP’s positioning for even stronger growth in the coming years,” said Daniel Eisenstadt, CVP co-founder and Board member.
“I look forward to being a part of this exciting time of expansion for CVP,” Ruffe said. “Throughout my career, I’ve had success managing health care companies as they grow and scale over time, and I see a lot of opportunity for CVP in the coming years.”
Founded in 2009, CVP’s mission is to provide operational support to its hospitals, enabling veterinarians to focus on practicing medicine and providing high-quality pet care. CVP’s hospitals have the benefit of accessing a variety of business tools, such as marketing, leadership development, HR support and finance, while keeping local control of clinical practices.
“What makes us different is that we provide support to our vet partners, but at the same time we allow them to maintain their brand and vision,” Ruffe said. “This means the customers at each of our partner hospitals see even greater levels of service since our partner vets have more time to focus on pet care and worry less about the challenges of running the day-to-day business…”
Prior to joining CVP, Ruffe was the Chief Growth Officer at MedExpress, where he was instrumental in building MedExpress into a national leader of urgent care services with nearly 250 locations caring for almost 4 million patients per year. Ruffe earned a bachelor’s degree in economics from Rutgers University and a master’s degree in business management from Rider University. He will be relocating to Philadelphia from Pittsburgh.
CVP is controlled by an affiliate of Cortec Group, a private equity firm based in New York, that invests in middle market health care, specialty service, consumer and distribution businesses.
About Community Veterinary Partners
Community Veterinary Partners owns and operates veterinary hospitals and is committed to providing world-class treatment and health services to animals. The company strives to maintain each hospital’s individual brand and reputation in its community. The CVP family currently consists of 45 animal hospitals in 10 states. More information is available at www.cvpco.com.
Founded in 1984, affiliates of Cortec invest in high value-added, middle-market healthcare, specialty service, consumer, and distribution businesses from owners and management teams who want to work with Cortec to drive growth and improve business fundamentals. Additional information about Cortec can be found at www.cortecgroup.com.
Written By: Dr. Jennifer Fletcher, Animal Hospital of Dauphin County
As veterinarians, we have two main goals: keeping pets healthy and their owners happy. We examine animals and administer vaccines to protect them from infectious disease, but all too often we find ourselves treating dogs and cats for chronic conditions that require lifelong medications and monitoring. The move toward preventive medicine is becoming more imperative as the cost and standard of care rises. The cornerstone of moving your practice towards preventive medicine is a wellness program. By creating a comprehensive plan and thorough training of our staff to embrace “wellness,” we now have a foothold in moving our practice towards preventive medicine. We implemented our program two years ago at the Animal Hospital of Dauphin County and have seen many benefits of transforming the way we approach wellness in our patients.
Establishing a comprehensive plan
The first step in establishing our wellness program was determining the components of the program. Every practice may take a different approach but we elected to streamline the wellness exam, provide stage-specific blood panels at a discounted price, administer lifestyle specific vaccines, discuss current diet and recommend year-round flea/tick and heartworm prevention. We tried to keep it as simple as possible for our clients so they would not feel overwhelmed or confused by the choices that we offer. With time being a limiting factor in the exam room, becoming efficient with recommendations and discussion of wellness was one of our greatest challenges.
For the wellness exam, we utilized our electronic medical record to start our recommendations before the client even enters the hospital. Our veterinarians will research the medical record of each wellness patient on the schedule that day and pre-load the patient list with the vaccines, blood testing and preventive products they recommend based on the patient’s lifestyle and medical history. We also created Feline Wellness and Canine Wellness exam templates. These templates include questions our technicians ask our clients in the exam room. These questions cover current problems or concerns, diet (what brand of food and how much they are feeding), flea/tick/heartworm prevention if they currently use it, at home dental care, lifestyle of the pet (boarding, grooming, etc. for dogs and indoor only, indoor/outdoor, outdoor only for cats), and infectious disease testing (heartworm, tick-borne, FIV/FeLV). Through training and discussions at staff meetings, the technicians transformed these questions into a dialogue with clients rather than peppering them with questions. Finally the technician opens the computer invoice and discusses wellness bloodwork and other recommendations the veterinarian has made.
For wellness bloodwork, we created a set of blood panels that include a CBC, chemistry, and a fecal float but may also include thyroid testing and a urinalysis based on the age of the patient. We are able to offer these panels at a discounted price to our clients through an agreement with our external laboratory. We propose annual wellness bloodwork for all patients and infectious disease testing yearly in dogs and based on lifestyle of the cat.
Changing your message — vaccines to wellness
The next aspect we changed about the way we practiced was our message to our clients. We no longer ask owners to set up their “vaccine appointments,” but instead, to have them schedule their “wellness exams.” The word wellness definitely alerted a change in our clients. The most commonly asked question was, “What do you mean by wellness?” Through interactive staff meetings based on communication techniques, we trained our staff to use this opportunity to explain that we want to not only administer vaccines but also ensure their pets’ overall health status by discussing weight, diet, parasite preventives and any other concerns the client may have. About one year after instituting our program, our clients now call to set up their wellness exams. By changing one word, we also changed how our clients saw the value of their annual or semi-annual appointment.
First and foremost, everyone on the staff must be on board with the program and believe in the value of wellness and preventive care. The best way for staff to feel a part of the program is to be participants themselves. We encouraged our staff members to have wellness bloodwork performed on their own cats and dogs. We embraced the “practice what you preach” mentality.
We also used the opportunity of our staff pets’ bloodwork to educate receptionists and technicians about what the values mean. The more your staff knows about their own pets’ health, the more they can convey this to the client. Our clients especially take what we do for our own pets into consideration when making decisions for their animals. There is no stronger recommendation than one you would make for your own dog or cat.
Introducing the wellness program to the clients
For the most part, our hospital had always been recommending preventives and lifestyle-based vaccinations. With the introduction of the wellness program, we made it more visible to the client with visual aids and a consistent message. Our emphasis on wellness to our client starts with the receptionists scheduling and confirming the appointment; it is then reiterated in the exam room by the technicians and doctors and is again, reinforced by the receptionists and technicians with follow up calls. By doing this, the client feels the entire practice is on board with recommendations and is more likely to participate.
When our receptionists schedule and call to confirm the appointment, they remind the owner to bring a fecal sample (as all of our wellness bloodwork panels include a fecal float). In the exam room, we have posters explaining wellness bloodwork and show what each panel includes, the cost of the panel and the discounted savings to the client. It’s a great visual tool and shows the client the value they are receiving. Finally we use our EMR system to our advantage to create callback reminders for vaccines (if starting a series and needing boosters) and dental recommendations. The receptionists call owners reminding to set up their technician appointment for the booster vaccine or to ask them if they would like to set up the dental cleaning procedure that the doctor recommended at their exam. The follow up calls have increased client compliance and show our clients are commitment to wellness in their pets.
Especially in the first year of our wellness program, our clients felt slightly overwhelmed or unprepared for the cost of the wellness bloodwork. Because of this, we allow clients to set up appointments with our technicians within 3 months of the wellness exam to take advantage of the blodowork prices and to have infectious disease testing performed without another exam by a doctor. Many clients enjoy this option as it allows to discuss it with family members at home or to spread out cost over two visits.
Showing clients the value — sharing stories of success
Our hospital has certainly seen the value of the wellness program along with our clients. Not only have we established “baseline” bloodwork values for patients who appear healthy, we have also detected early or subclinical disease in a number of patients. We have diagnosed early stage chronic renal failure where a diet change is the only treatment needed, instead of discovering it when the patient is severely azotemic and clinically ill. Additionally, we have revealed hyperthyroidism and diabetes mellitus before patients have developed hypertension, heart murmurs, weight loss and ketosis. By far one of the most rewarding examples of the success of wellness bloodwork was a case in which we diagnosed thyroid cancer in a dog whose only clinical sign was a three pound weight loss. We relay these stories of success with all of our clients in the exam room. We emphasize how animals can “hide” disease and that early detection is the key in the management of most chronic conditions. By detecting disease early, we can increase a patient’s quality of life for longer and most likely for a lower cost to the client as well.
Overall, the wellness program at our hospital has been a win-win situation. Our patients are receiving a higher standard of care and their owners are becoming an active participant in their pet’s health. Many hospitals already recommend and perform many components of a wellness plan, but making it visible and valuable to the client is the key. A straight-forward comprehensive plan will help move your practice towards success with preventive medicine.
Cold laser therapy holds a place in human and animal pain management and wound healing as non-invasive, effective therapy. Veterinary patients benefit from its ability to promote healing and relieve pain in surgical incisions, stomatitis, extractions, degenerative joint disease, intervertebral disc disease, acral lick granulomas, anal sac tumors, and rhinitis. The benefit to patients includes the decreased need for anti-inflammatory agents and analgesics. As veterinarians compete with on-line pharmacies, this face-to-face modality increases patient comfort and healing, client trust and reliance, and veterinary success and satisfaction.
Furthermore, cold laser therapy empowers veterinary technicians in a modality that they can administer and gives them the opportunity to earn praise from clients. Veterinarians and technicians can learn the principles and techniques in a few training sessions. Veterinarians diagnose the animal’s conditions and prescribe the therapy for technicians to administer. Laser sessions average 15 minutes or less, and occur frequently in the first few weeks and either heal the wound or abscess or continue at a regular interval for chronic pain management.
Veterinarians certified in acupuncture can implement laser acupuncture for patients who are needle phobic or too restless for traditional needle therapy. Hospitals that offer both modalities have a tremendous advantage in pain management for patients, therefore inspiring great trust from clients.
Cold laser therapy and acupuncture maximize options for analgesia and healing in general practice. The initial investment in acupuncture training is in time and education for the veterinarian. The initial investment in laser is in the equipment. The beauty of cold laser is that every medical person in the hospital can learn it quickly and easily. The general public is perhaps more readily accepting of the non-invasive nature of cold laser and aware of its use in human physical therapy. Veterinary hospital open houses to introduce cold laser treatments offer good business opportunities for the veterinary staff to demonstrate the comfort of the modality and to socialize with clients.
Even as veterinarians find ways to streamline inventory and pricing to compete with on-line pharmacies, hospitals that offer hands-on treatments with acupuncture and/or laser keep clients and patients walking in the door.
This blog is part 3 in a three-part series on acupuncture and laser in general practice.
Written By: Brian Miller, Receptionist and Social Media Specialist, Liverpool Animal Health Center
Working as a receptionist at Liverpool Animal Health Center provides me with a unique opportunity to gain perspective that may not be as apparent within other departments of the hospital. Aside from witnessing the comings and goings of virtually every pet and owner that walks through our doors, I am also constantly answering phone calls. At least once a day, and usually more, I will receive a call from someone who believes that they are reaching one of the other local hospitals. This, in large part, is due to the fact that there are two other hospitals located on the same stretch of road that we are, and these offices each begin with the word “Liverpool.”
The mere fact that there are other offices within such close proximity to ours means that it is imperative to not only provide the best care possible, but also to make each experience rewarding and educational. It also means that we need to find a way to separate ourselves from our competition by providing services that allow us to rise above the rest. In these areas, LAHC excels, serving as one of the few offices in the Central New York region that treats wildlife patients and non-traditional (exotic) pets.
When Jean and Lenny Soprano founded Kindred Kingdoms Wildlife Rehabilitation Center in 1989, they were initially met with resistance when they set out to find a local veterinary practice that would treat wildlife animals that needed a doctor’s care. According to Ms. Soprano, “Even though practices used wildlife rehabilitators when their clients called about an injured or orphaned wildlife species, they would not treat the animal or allow their clients to bring them into their offices.” Fortunately for the injured patients and for the Soprano’s, Liverpool Animal Health Center was eager to help. Practice owner Dr. David Clegg, as well as the doctors that were here at the hospital when Kindred Kingdoms was founded, were really interested in helping out these wildlife patients. “It all started because there was a need, and we were able to fit that need,” according to Dr. Clegg.
In their early days, Kindred Kingdoms helped rehabilitate a seemingly endless variety of species. Now, they focus primarily on birds of prey (although they still care for baby bears in an enclosure that is completely devoid of human interaction.) This works well for our doctors and patients, because it ensures that rabies vector species are not coming into the hospital for care. When asked what species she has needed veterinary care for, Ms. Soprano lists: coopers hawks, sharp shinned hawks, redtails, rough-leggeds, kestrels, merlins, screech owls, barred owls, great horned owls, saw-whet owls, snow owls, turkey vultures, osprey and Bald Eagles. “LAHC provides us with complete diagnostic care, which includes x-rays, blood work, and eye exams,” says Ms. Soprano. “The radiographs ascertain what fractures are present, and whether or not the animal has been shot, swallowed fish hooks, or has any other foreign body internally. Blood analysis determines heavy metal toxicity, red and white blood cell counts, PCV etc. This allows us to choose the proper medication for the animal. A thorough eye exam may reveal retinal detachment, blood in the eye, and corneal or lens damage.” “The relationship is mutually beneficial,” says Dr. Clegg, “we help provide them with care for their rehab patients, and when they are out doing their demonstrations, when asked, they let people know that the animals are cared for by Liverpool Animal Health Center. This is some of the best marketing we can ever have. They are great people to work with.”
Currently, Dr. Marla Lender and Dr. Nicholas Wolfer are the two veterinarians at LAHC who care for the wildlife patients. “The number of cases rehabilitators handle is huge, and many of the animals they accept have terrible injuries or illnesses,” says Dr. Wolfer. He goes on to say that “In situations of toxicities, fractures, neurologic damage and eye damage, it often requires the facilities (laboratory, radiographs, etc.) and expertise of a veterinarian working in conjunction with the rehabilitator to determine an animal’s prognosis, and to guide treatment.” Dr. Lender adds, “Illness and injury among wild animals is frequently the result of indirect contact with humans. We commonly see animals that are injured by gunshot, traps, fishing hooks or lines, toxins, motor vehicles, electrical wires, and our pets. While it would be best to prevent these sorts of injuries, I do believe we have an obligation to take care of the world we live in and the creatures we share it with. Providing veterinary care to injured wild animals is one way in which veterinarians can do that.”
Dr. Wolfer and Dr. Lender not only see wildlife patients in conjunction with their regular case load, but also exotic pets as well. They are not the only doctors who have seen exotic patients within the practice, however. According to Dr. Clegg, Liverpool Animal Health Center has been attending to the needs of these patients from the time the hospital opened its doors, although “The volume, incidents, and frequency of visits is much greater now than it used to be.” When asked for the reason for this, Dr. Clegg says, “I think it is because we now have doctors who are very interested in and have further knowledge of the exotic world, which allows us to give proper care. Although our doctors are not specialists, we try to provide the best possible care we can.” He goes on to say, “All veterinarians are in the business to help animals, but treatment of exotic pets has gotten more specific and refined over the years. Long ago, most doctors would see exotic patients whereas now, it is done primarily by doctors who have an interest and passion in treating them. These doctors are now more educated, have better knowledge, and possess the ability to better care for these non-traditional companions.” This is illustrated by the fact that Dr. Wolfer and Dr. Lender both took elective courses and clinical rotations focused on exotics and wildlife at Cornell University. They also learned about treatment of exotics through other veterinarians in practice, clinical experience, written resources, and continuing education.
Both Dr. Wolfer and Dr. Lender feel that it is vital for our hospital to provide care for exotic pets. “They are an underserved group of patients, and in many ways, their owners are underserved as well,” states Dr. Wolfer. “They are often purchased on impulse, and the owners are given little or incorrect information on proper care. Consequently, the majority of the disorders we see are due primarily to poor husbandry conditions that could be easily avoided or corrected.” Much like the Soprano’s found difficulty in finding a practice that would assist with wildlife, owners of exotic pets often have difficulty finding a doctor that is willing to see their pet. Because of this, it puts these pets at a disadvantage. This is one of the driving forces behind Dr. Lender’s decision to treat exotic pets. “When I learned of the challenge people have in finding veterinary care for exotic pets and of the rampant misinformation people receive from pet stores, breeders, and the internet, I felt a responsibility to do my part to educate and assist them, with the goal of improving the quality of life of the animals.”
Stayed tuned for my next blog around how we work with government agency dogs in the area!
As mentioned in the last post, the Bayer study identified a number of attributes that practices which continue to grow during this post-recession economy have in common. Not entirely surprising is that two of those attributes are marketing related: the first is a belief by the practice owner that marketing and advertising were critical to the practice’s success and, secondly, that the practice is an active user of social media such as Facebook. The study also looked at attributes associated with practices who are experiencing declines in visits and found that both of those factors were marketing related: the veterinarian felt that advertising undermines his/her credibility as a veterinarian and the practice lacks referral arrangements with other pet service providers.
What IS surprising is that 74 percent of veterinarians do not completely agree that marketing and advertising are important tools in running a successful practice today. Without that commitment, it’s unlikely those practices will be effective in using marketing strategies to attract new clients.
What do you think? How much time do you spend on marketing and advertising? What have you found to be most successful?
Written By: Emily L. Elliot VMD. Chippens Hill Veterinary Hospital
While a veterinarian is learning veterinary acupuncture, offering treatments to pets belonging to staff members gives both the veterinarian and the staff member confidence in the treatment and the results. Once certified, the clinician offers treatment to clients’ pets, and it is easy for the staff members and colleagues to endorse the modality they have seen achieve results. In the typical case load of general practice, there is ample opportunity to treat epileptics and geriatric pets with degenerative joint disease, for example, in conjunction with medication and nutritional supplements. Acupuncture is particularly beneficial for animals who have impaired hepatic and renal function for metabolizing medication, since acupuncture gives them pain relief that allows the owner to give fewer drugs.
Typically, animals come to the clinic weekly for initial treatments, which are later scheduled less often once the animal is stable. Typical chronic conditions need a monthly maintenance treatment, which allows practical monitoring of the animal’s weight, body condition, and blood work. The other benefit of acupuncture in general practice is the opportunity to communicate with the client. While the animal’s acupuncture needles are in place for 10-20 minutes, the veterinarian and the technician have time to educate the client in disease management, and give the client tremendous confidence in the care and concern the office has for customizing the care of the individual animal.
Acupuncture further maximizes the veterinarian’s time, since once the clinician gets a progress report, evaluates the patient, and places the needles with the technician holding the animal and talking with the owner, the veterinarian can move on to another exam room to see another patient, returning to the acupuncture patient in 10-20 minutes to remove the needles and schedule the next visit. Record keeping for acupuncture is straightforward, and fees can vary with demographics but should reflect the investment in time and training required to learn the skill, and the time of the technician assisting with the treatment. Once skilled, veterinarians can reach out to individual colleagues or present talks at local veterinary associations to explain the benefits of acupuncture for referral cases. Establish a consultation fee for referred clients at their first visit in addition to the fee for acupuncture. Of course, respect for the referral relationship gives colleagues trust so that they continue to send cases for acupuncture treatment.
In the third installment in this series, I will compare acupuncture and laser therapy.
Written By: Emily L. Elliot VMD. Chippens Hill Veterinary Hospital
Acupuncture is a growing part of veterinary practices today and many pet owners are turning to this method of treatment for their pets. There are several reasons to consider adding acupuncture to your list of services at your veterinary hospital.
Veterinary acupuncture offers management for pain, seizures, immune support, and gastrointestinal therapy that can be used in addition to medical and surgical treatment and sometimes even instead of it. Animals respond well to acupuncture and there is no placebo effect for them, though it is important to guide their owners through objective evaluation of response to therapy. Veterinary acupuncture cannot be bought on the Internet and it increases client visits to the hospital. The overhead in acupuncture supplies is minimal after the initial investments of time and education.
Education in acupuncture takes place usually in four sessions of four days each over about a year and can be found in a variety of locations and institutions around the country. Beyond the basic education, certification by the International Veterinary Acupuncture Society, IVAS, provides credibility via requirements for education, examination, mentorship, a case log, and a peer-reviewed case report. A veterinarian learning acupuncture makes a significant commitment in time and study of this centuries old medicine.
Once a veterinarian is qualified to offer acupuncture in practice, the support of staff and colleagues comes easily since the animals’ response to treatment gives visual results. Internal referrals of existing cases in the hospital build the use of acupuncture quickly. Animals with chronic conditions such as degenerative joint disease, intervertebral disc disease, and epilepsy do well with treatment and generally need long-term maintenance. Acute cases needing short-term treatment include animals undergoing dental procedures, hospitalized patients with refractory vomiting or diarrhea, and post-op surgical patients. All have better pain management and faster healing with acupuncture as part of their care.
In the next two installments in this series, I will compare acupuncture with laser therapy and discuss implementing acupuncture in general practice.
The first question that people ask is: “Why do I need to look at my profit and loss statement?” The answer lies in an old cliché that says “If you can’t measure it, you can’t manage it.” While it is easy to ignore clichés because you’ve heard them so many times, these phrases are generally clichés for a reason—they are widely applicable truths that should not be ignored. Obviously these specific words have to be taken with a grain of salt—it’s not necessary to count the paperclips on a daily basis in order to manage the purchase of office supplies but managing most areas of a veterinary hospital well means you need to measure the activities involved. Your veterinary hospital profit and loss statement (aka “income statement” or “P&L”) is a good starting point for revenue and expense analysis.
In most hospitals’ P&L statements, revenue is only displayed as a single number called something like “Fees-professional services.” While comparing this figure for a month or year to the prior month or year and calculating the percentage change gives you some idea about the magnitude of revenue growth or decline, the profit and loss statement doesn’t have a whole lot of other information about revenue. In order to analyze revenue more deeply, it’s necessary to look at some of the metrics related to the drivers of revenue—transactions, average transaction charge, revenue by doctor, new client numbers and revenue by category.
In comparison, the profit and loss statement is an excellent source of information for expense analysis. You’ll get better insights, however, if the information from the income statement is put into a spreadsheet that allows for comparison of changes over periods of time and allows the expenses to be reviewed as a percentage of gross revenue, not just in absolute dollars.
The key data points on which most of your time should be spent are the high-dollar items–labor costs (both doctors and staff), and drugs and medical supplies expense. However, don’t forget the smaller items–all expenses should be examined in detail at least once a year.
The first comparison to be made for any given expense is between the current period (month, quarter, or year) and the prior period; for example, support staff costs are compared from 2013 to 2014. Expenses that generally fluctuate with revenue changes are better examined by looking at them as a percentage of revenue rather than as a direct dollar comparison. Support staff costs may have declined dollar-wise from one year to the next but if revenue is declining as well, the support staff costs may actually have gone up in proportion to revenue. If you only look at dollar amounts, you won’t see this.
This internal benchmarking is often the easiest kind of analysis to perform because the data is readily available—it’s all internal. However, there is no guarantee that improvement means a practice is doing well; it may simply mean they are doing less badly than before. Some comparison to outside benchmarks is important to make that assessment.
AVMA, AAHA and Advanstar all collect and publish a fair amount of financial and operational metric information that can be used for this kind of comparison purposes. No practice is going to be exactly like the practices included in the study population but this analysis is very beneficial for most practices. For example, if your drugs and medical supplies expense is 17.1% of gross revenue and one of the published studies says this expense is 17% in a typical practice, you aren’t going to get too worried—it’s a minor difference. However, if your expense is 25%, then you should do some investigating. If the majority of practices can keep their drugs and medical supplies expense at 17%, why can’t you? Improving your inventory control could drop a lot of money to the bottom line.
Once you have a handle on which expenses seem high, you need to look at the drivers of those expenses. For example, if your staff compensation looks high, are staff working too many hours? Is there too much overtime? Are they overpaid? Some additional metrics to look at in sorting out the issues are staff hours per transaction and staff hours per day (particularly in comparison to doctor hours/day.) Does this fluctuate per week or month? What can be done to increase efficiency?
The last item to discuss is the “net income” figure on the P&L. This is what’s left over after expenses are subtracted from revenue. Perhaps the most important indicator of financial success in a veterinary practice is the true operating profitability. Unfortunately this is the most difficult number to get because it doesn’t show up on any report a practice regularly receives, even when those reports are properly prepared. The net income figure on the P&L is generally a meaningless number and doesn’t represent the operating profit.
Why is net income usually a meaningless number? Net income (i.e. the operating profit) should represent what’s left over after all of the normal and necessary expenses of the veterinary practice are paid at fair market value rates. Often times, not all of the expenses in a veterinary practice P&L statement are “normal and necessary” or they are not “paid at fair market value rates. Some common examples are:
Practice owner compensation that is not calculated based on the medical/surgical/management work the owner does but instead is just a random amount determined by how much money is in the bank
Perks (trips to Tahiti, dry cleaning bills, liquor store bills, airplanes, personal lawn service, etc.)—i.e. expenses that are not necessary for the operation of the practice but are paid by the practice in order to gain a tax advantage
Salaries for family members that are not paid at fair market value rates
Facility rent that is not representative of fair market value
There are usually 8-12 adjustments that need to be made to an income statement to determine what true operating profit is. You will generally need to get help from someone with veterinary practice financial expertise to know how profitable you are.
The P&L statement is a great source of information for making better management decisions. A monthly review will help you identify problems early on when it’s easier to correct them.
When looking to make any expansion changes at your veterinary practice there are a few things to consider to make sure you are making the best choice for your hospital. The first question to ask when you’re thinking about expanding is: What is the problem you are trying to solve?
• “Clients are stacking up in the reception area and have to wait too long”
• “We are turning away business because we are fully booked”
• “Our workflow isn’t very efficient because we don’t have enough exam rooms”
• “We’re tired of stepping over boxes of medical supplies every time we enter the restroom”
Before launching forward with any solution, you want to be sure it will solve the problem you have. For example, if clients are stacking up in the reception area, you first need to figure out why. If it’s because you have a doctor ready to see them but there aren’t enough exam rooms, then this may really be a space problem. But if it’s because all the doctors in the practice spend 30 minutes with a client in an appointment scheduled for 20 minutes, then adding exam rooms won’t help. Instead you have a scheduling issue or a doctor efficiency issue. If you’re turning away business because you are fully booked, adding another doctor or using technicians more efficiently may be the first step in solving this problem. Do you have to have more space for these extra appointments? Maybe or maybe not; before launching forward with the expansion, make sure you are using your current space to its best advantage.
Assuming you really have a problem that will be solved with extra space, the next question to ask is: What will be the impact on cash flow of expanding? If you’re expanding to accommodate more clients, you will likely see a dip in cash flow in the short-run but a later increase as more pet owners visit the practice. If you’re expanding simply because the space is too cramped but don’t expect much client growth, then the dip in cash flow may take longer to recover from. This isn’t always a bad thing; simply having room to turn around can be worth the extra bucks. If you will need additional clients to make the project pay off financially, you need to be confident you can attract them. The days of “build it and they will come” are behind us. Of course, you can borrow the money needed for the expansion but unfortunately, lenders want to be repaid at some point and you need to make sure you’ve got enough of a cushion to weather any dip in cash flow once you have to start repaying the loan.
Answering these two questions in depth will help you make the right decision in determining it it’s time to expand.
Dr. Karen Felsted is a senior advisor to Community Veterinary Partners.