Each fiscal quarter, CVP Member Network hospitals share their financial results with us. We ask them to do this so we can compile a benchmarking report. This report enables us to see how the CVP Member Network hospitals are doing in relation to their peers. These results are also a great way to see how your veterinary hospital is performing in relation to other practices.
In the second quarter of 2015, our Member Network hospitals continued to show positive revenue growth over Q2 in 2014. Of the 29 hospitals in our Member Network, 25 or 86% reported growth in 2015 over 2014! The average change in revenue that was reported was 8% extending above average growth patterns for a second consecutive reporting period.
Written By: Travis Meredith DVM, MBA, DIP. ACT- Community Veterinary Partners; Director of Member Services
In spending time with many successful practice owners, I always find it interesting to learn how each tracks the performance of his or her veterinary hospital. Some veterinary practice owners have a very sales oriented approach to tracking current and future success while others feel that they are able to trust their gut by looking at the volume in their waiting room. One thing I realized is that there is no one metric that everyone follows to measure practice performance.
How is it possible that various successful veterinary practices I know can be so successful yet track their performance so differently? In my opinion, the answer lies in looking and listening to your practice’s performance and the frequency that the “diagnostics” are run.
I was given the opportunity to leave hospital ownership to run a business unit for a major animal health company where I was mentored by one of the biggest data nerds I’ve ever met. Each morning he made it a habit to do a 30-minute review of the previous day so he always knew what parts of the business were going well, what areas were in trouble, and where potential problems may arise. In doing this, he was able to focus his energy on potential problems before they became actual problems. In following just a few key metrics each day, he taught me how to stay ahead of potential problems that may arise.
When I returned to managing veterinary hospitals, I took the simple tricks I learned with me. In looking at each practice type, I made sure to check for a few key metrics and just like the veterinary practice owners who run leading indicators or who reads the volume in the hospital waiting room; I followed those metrics every day. Over time, this gave me the ability to gain a true pulse of each practice. I was able to identified negative trends sooner, understand staffing issues more clearly, and be proactive to avoid potential problems and do things that make the practice more valuable.
Something to think about after reading this. Every morning when you arrive at your veterinary hospital you usually spend time evaluating each client and pet that is in the waiting room. It’s important to show the same dedication to your business each day by taking 20 to 30 minutes to follow the key metrics for your practice.
Each fiscal quarter we ask our Member Network hospitals to share their financial results with us. We then pull the data together and produce a benchmarking report. Benchmarking is a great way to see how your hospital is performing compared to your peers.
For the third quarter of 2014 (from June through September), our Member Network hospitals showed a strong recovery from a slow first half of 2014 Of the 25 hospitals in our group, 14 reported growth vs. the prior year. Across the network, the median change in revenue was 4 percent vs. Q3 2013 and ranged between -13% and +13% (for non-startup veterinary practices.)
A new national survey of veterinarian owners shows a majority of hospital revenues are up 2 to 5 percent this year.
Other key findings from the survey:
– Pricing appears to be slightly improved with more vets raising prices 3-5% and fewer raising 1-2%. However, 23% of respondents (9 of 40) did not raise prices, up from 15% (6 of 39) last year.
– Wage pressure appears to be increasing with 38%, or 15 of 39, expecting increases of 3-5% compared to only 23%, or 9 of 39, expecting over 3% increases last year (including some increases over 5%).
– More than half of veterinarians surveyed said they were increasing their use of generic medications.
– All owners were planning to keep prices flat or raise them in the next year.
The survey was conducted by First Analysis, a Chicago-based equity research firm. A link to the full research report is HERE.