A decade ago, shorthanded practice owners hired a relief veterinarian they knew to cover the days when a doctor was away. The cost was reasonable, and nonemergencies could wait until the doctor returned. Over the years, as the demand for veterinary services increased and clients became more willing to spend extra on their pets, the supply of veterinarians entering the profession did not keep pace, leading practices to hire relief veterinarians to cover shifts on an ongoing basis. Fast-forward to today, and I see many hospitals whose DVM labor costs are much higher than historical norms and, in some cases, financially unhealthy.
How We Got Here
The growing use of relief help is a case study of supply and demand. As clients adopted record numbers of puppies and kittens during the pandemic, a four- to eight-week wait for a new-patient exam or wellness appointment became acceptable and commonplace.
To handle the demand, practices competed for full-time associates, driving up DVM salaries. Sign-on and retention bonuses became the norm. Put simply, client demand for services was greater than the supply of associate DVMs seeking full-time employment.
At that point, many practices became reliant on relief veterinarians, which, in turn, led to hospitals paying them rapidly escalating hourly and daily rates. The introduction of for-profit relief companies drove the prices higher. Per-diem rates went from $450 to $650 a decade ago to $1,000 and sometimes $2,000, depending on the shift and hospital.
Making It Work Financially
The heightened cost of relief veterinarians isn’t inherently bad for practice owners, but understanding the financial impact is critical. While associate DVMs might receive 20% to 22% of their production, payroll taxes and employee benefits amplify the labor expense. In contrast, practices don’t incur payroll taxes or provide fringe benefits to relief veterinarians. Therefore, paying fill-in doctors 25% of their production often works well financially for the practice.
The downside is that some clients might want to wait for their regular doctor to return to work rather than see a veterinarian they don’t know. In addition, some relief veterinarians don’t perform surgery or dental services, which places a burden on the staff to keep the appointment book full and ensure the locum doctor is as efficient as possible in the exam room.
For practices that regularly hire relief help, I recommend the following:
- Track their production in your practice management software.
- Compare their labor cost to their production, using a goal of 25%.
- Work with your front desk team to schedule full days for the relief doctor.
Bad Math
If your calculation of the cost of relief veterinarians at your practice is 30% or higher, you have a financial problem. The solution lies in the current demand for veterinary services.
Suppose you have two relief doctors, each working one day a week. Their cost compared to their production is 30% or higher. Here are two scenarios and the solutions.
Scenario 1
The first opening for a new patient is more than two weeks away. You are booking soft tissue surgery and dental procedures more than four weeks out.
Solution 1
- Make sure the front desk team encourages clients to schedule appointments with the relief doctor. (Don’t assume it always happens.)
- Talk with your DVMs about their workload, as well as their willingness to work additional hours or their openness to adding an associate.
- Revisit hiring a full-time associate veterinarian. While finding one is easier said than done, a significant source of candidates recently involves associates leaving corporate practices for privately owned clinics.
- Understand that a full-time associate typically does not cost much more than two relief days a week. The additional coverage provided by a full-time DVM can help reduce appointment backlogs. It also creates capacity for sick patients and helps cover other doctors’ time off.
Scenario 2
Tomorrow’s appointment book has holes. Even after same-day sick visits, some will go unused.
Solution 2
- Ensure your front desk team encourages clients to forward-book appointments and accommodates sick pets to the greatest extent possible, given the doctors’ capacity.
- Ask your associate DVMs about their workload, willingness to work more hours and openness to hiring less relief help.
- Consider schedule changes that would allow you to reduce your reliance on relief doctors.
Take a fresh look at how your practice uses relief veterinarians. If their client service is excellent and their cost is reasonable, fantastic! If you are struggling to keep them busy or their production doesn’t support their cost, reevaluate your need for them.
ONE LAST TIP
Some veterinary practices have seen declines in patient visits as more product sales move to online channels. If that’s happening at your hospital and your relief veterinarians are not producing enough to support their labor costs, first focus on growing the number of doctor visits. If that doesn’t work, you may need to reduce your reliance on relief help.