Growing a veterinary practice can be daunting. Many pet owners haven\u2019t seen improvement in their disposable income in awhile, new-client visits have declined and internet pharmacies pose increased competition.<\/p>\n
Meanwhile, your current clients are valuable assets. But when you present to them a plan to diagnose and treat their pet\u2019s chronic condition, they go into sticker shock.<\/p>\n
It\u2019s understandable. Some veterinary consultants say charging a 100 percent markup in acute cases for one-time diagnostics, medical services and medicine is standard. But with lab work intervals for chronic conditions occurring at 15, 30 and 90 days, the markup at every visit can erode the client\u2019s value perception.<\/p>\n
The client might opt to euthanize when proper management could have given the pet a good quality of life.<\/p>\n
To avoid this scenario, the veterinarian might want to consider a chronic disease treatment business model. This means charging a smaller-than-usual markup for services that must be frequently repeated for the rest of a patient\u2019s life.<\/p>\n
\u201cThe typical 100 percent markup can become a burden to clients dealing with a pet\u2019s chronic disease,\u201d says Fritz Wood, CPA, CFP, a veterinary financial and business consultant based in Lenexa, Kansas. \u201cCharging less in the short run can keep the client returning for routine exams, vaccinations, parasiticides, professional dental cleanings.<\/p>\n
\u201cHere\u2019s the deal,\u201d he says. \u201cIt\u2019s hard to measure what you don\u2019t get. How many people stop treatment because of cost? Remember, 100 percent of zero is zero.\u201d<\/p>\n
Peter Weinstein, DVM, MBA, of PAW Consulting in Irvine, California, agrees. He has promoted a similar protocol and takes Wood\u2019s suggestion one step further. His model parallels wellness plans but is developed for ongoing disease monitoring.<\/p>\n
\u201cWith chronic diseases such as kidney failure, diabetes, Cushing\u2019s, Addison\u2019s and feline hyperthyroidism, you can offer the owner a package of services and treatments that include tests, medications, office visits,\u201d Dr. Weinstein says.<\/p>\n
\u201cWe know what the basic treatment and testing costs are, so by having a pet owner commit to the package at a discount, you can help the client, improve compliance and care for the pet.\u201d<\/p>\n
Using the typical markup may drive clients to price-shop, especially for medications, warns Dr. Weinstein.<\/p>\n
\u201cWhen the client must bring the patient back for visits and tests, she can decide that there is only so much she can afford and opt to put the animal down,\u201d he says.<\/p>\n
In fact, Wood adds, \u201cThe more expensive the product or lab test, the lower the markup should be. The inverse is also true: With an inexpensive item, we should expect to see a higher markup.\u201d<\/p>\n
Pet nutrition companies do something similar with therapeutic foods for chronic conditions by setting the suggested retail price at lower markups.<\/p>\n
As clients\u2019 options evolve, veterinarians need strategies designed to retain chronic prescriptions and offer value-based chances for owners to treat their pets. Be willing to try something different, Wood says.<\/p>\n
\u201cLook at the last dozen chronic cases you diagnosed and see what happened,\u201d Wood says. \u201cNothing speaks like your own history.\u201d<\/p>\n
How many of your clients have declined treatment of a chronic condition? Assess the value of those lost services and medications.<\/p>\n
If offering a lower margin on laboratory testing and medications, while maintaining a professional margin on services, could have led to the pet owner to say \u201cyes\u201d to your treatment plan, consider what size markup might have led to their agreement.<\/p>\n
Maybe it is a 50 percent markup, Wood says. Run a few scenarios with different markups and see what it does to the treatment costs, and at the same time look at the potential profit from treatments that owners have declined. A declined treatment plan yields no profit.<\/p>\n
If you choose the lower markup for chronic illness, promote it to the client, Wood says.<\/p>\n
\u201cSay, \u2018We\u2019re doing these tests as inexpensively as we can because we know it\u2019s an expensive illness,\u2019\u201d he says. \u201cLet the owners know you\u2019re in this with them. And be encouraging, especially when treatment offers a good prognosis.\u201d<\/p>\n
Continuing education sessions, contracting with a practice consultant and joining a business management study group are ways to help develop your business model.<\/p>\n
Endocrine diseases can be properly managed to allow pets to have dramatic turnarounds in their quality of life, but only if the client agrees to your treatment plan.<\/p>\n
Because each practice is different, veterinarians need to figure out what markup is fair and still allows them to maintain a healthy business, and at what cost pet owners find value and keep coming back.<\/p>\n
Ultimately, that\u2019s what we all want, Dr. Weinstein says.<\/p>\n
\u201cIf it improves compliance and patient care and gives you income and profit that you might not otherwise have been able to attain, why not?\u201d<\/p>\n
This Sponsored Content article was underwritten by Dechra Veterinary Products of Overland Park, Kansas.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Because each practice is different, veterinarians need to figure out what markup is fair and still allows them to maintain a healthy business, and at what cost pet owners find value and keep coming back.<\/p>\n","protected":false},"author":66,"featured_media":1674,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[90],"tags":[],"class_list":["post-1673","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-online","clinical_topics-sponsored"],"acf":{"hide_sidebar":false,"hide_sidebar_ad":false,"hide_all_ads":false},"yoast_head":"\n