The recessionary economy is real.  Do not believe the government stated unemployment rates of 4.5% to 4.9%.  If the person has been forced out of their job during the Global Financial Crisis (GFC) of 2007-2010, and the job does not reappear, the out of work employee finds they have no skills for the new marketplace, so they decide NOT to gain employment, the rate of UNEMPLOYED is closer to 24% in most catchment areas.  The veterinarians doing traditional “curative” medicine will not really notice it, since people will not allow their pet to continue bleeding, continue vomiting, or continue limping.  The veterinarians who have been escalating prices for wellness care without escalating the value of that care will be the first to feel it.  The second level of veterinarians to feel the recessionary economy may be the newer specialists in town, unless preventive action is taken.  This article is about reasonable alternatives for prevention of major liquidity drain.




A recent survey of 1000 practices show that the two major distractors from using the specialists in town are timely communications and fear of the costs to the client.  Some communities have seen their veterinarians open the Pandora’s box of advertising and no one can get it closed; the extra net is being eroded by advertising and discounting.  Our profession has had a long time love affair fixation with the gross and average client transaction, rather than net income, return visits, and referrals for best quality of care.  There is one national consulting firm which advocates couponing and discounting to such a level that they will not publicize net gain, only gross income changes, since virtually all the net is to be reinvested in more advertising (and their consulting fees).  Some of the newest “practice assistance” companies are ONLY discounters, requiring the practice to discount more than their net earnings per client, just to receive new clients from the company’s “advertising referral” programs, which will cost the practice lost net for every new client they gain.  Have you wondered why virtually every Pet Club (“if you discount to our members, we shall refer to you”) which has started in the past couple decades has ceased to survive?  The “discount OR die” has rapidly been replaced with “discount AND die”!


The discounting (or couponing) logic is an attempt to increase trade (traffic).  Let’s look at a simple table of the alternatives available in the discounting market and what sales increase is required to maintain current levels of profitability in an average general companion animal practice (pure net is usually ~ 9-15%, and computed AFTER reasonable rent, clinical compensation, and appropriate return on investment has ben paid):



10%                               5%                                                        100%

10%                             10%                                                     NEVER

10%                             20%                                                     NEVER

15%                               5%                                                        50%

15%                             10%                                                     300%

15%                             20%                                                     NEVER

20%                               5%                                                         33%

20%                             10%                                                       100%

20%                             20%                                                     NEVER

25%                               5%                                                         25%

25%                             10%                                                         67%

25%                             20%                                                      500%


Specialty practices have a bit larger margin, but it is usually provided the specialist and staff in compensation.  While a general companion animal practice can afford to obligate up to 43% in W-2 compensation (Australia and New Zealand is about 5%-7% lower) and still make budget, most specialty and emergency practices can afford to obligate up to 50% in W-2 compensation, due to the higher fees, and still have a workable budget (e.g., 10% of the gross obligated to shareholders).


Now it is easy to see why the ethical consultants on the lecture circuit tell you that a 10 percent discount means you need to at least double your business to remain at your current level if income; it also tells you why the less-than-ethical promotions only speak of changes in gross revenue potentials.  In some cases, the practitioner will say, “my net is 40% so this does not apply to me”; in most every case, this person has not yet deducted their own clinical salary from the net, and in some cases, has not deducted a fair rent from the net either.  The above table assumes a fair clinical salary for each healthcare provider, all family members working in the practice are paid, a return has been paid on tangible asset investment monies, and a reasonable occupancy expense, has been deducted, before stating the actual available practice net. 




In today’s veterinary market, the role of the referral veterinarian (RDVM) is critical to the solvency of the specialist or emergency practice.  The trust the RDVM places in their referring specialists is directly proportional to the value the client perceives; a complaining client makes the RDVM think twice about the next referral, Sure, there are some specialty and emergency practices staffing with interns to “save money”, but they are losing the trust of the RDVMs in the process, so while they will show a short term cash net gain, in the long run, the loss of trust will reduce their growth potentials.


Courting the RDVM trust means taking off your special-interest shoes and walk in their moccasins for a while.   What professional services have you told them you want their practice to provide with a referring case?


  • Have you told them you want the screening radiographs, the baseline CBC and blood chemistry, and maybe even a baseline ECG?
  • Do you accolade the RDVM for referring the patient, rather than saying they waited too long? Do you endorse the quality of care provided by their primary veterinarian?
  • Have you spent time sharing with them how they can help your diagnostic search by doing the first diagnostic screening, so your specialty diagnostic procedures and identify trends sooner?
  • Have you discussed with each RDVM your practice’s method of pain scoring, including pre-emptive pain scoring, so they will understand what you are referring back to them?
  • Have you discussed the role of Pet Insurance and Care Credit® in helping clients access care faster (e.g., 56% faster access has been reported) and be willing to spend more (e.g., 46% higher spending has been reported)?




As most any general companion animal veterinary practice calibrates their fee schedule to a national standard, rather than the guy down the street, using such tools as  the AAHA Fee Survey® for their region, the various Pet Insurance reimbursement schedules, or even the VHMA® surveys, one thing usually become very obvious – the practice’s prices have been too low.  The most recent information from Pets Best® states that reimbursements are only about 60 percent of the established indemnity reimbursable rates.


Care Credit® takes a different approach, where they pre-qualify a client and issue a credit line; 90-days same as cash (or longer for higher levels of credit).  The client who wants to “charge” care should be offered this option, since if they are “turned down” by Care Credit®, your team members are not the “bad guys”, but you have been alerted to a potential accounts receivable problem if the practice allows them to use your money for free.  The cost to a practice of taking the Care Credit® credit card is about the same as American Express.  The time it takes to pre-qualify a client for Care Credit® is usually less than 30 seconds on the telephone (Care Credit® now provides 23 hours service a day, so they are serving the emergency community in a more timely manner), so it is ALWAYS a great idea to ask, “How are you planning to pay today?” when the client initially accesses the veterinary practice (especially for urgent care when they are first time patrons).


Pet insurance is becoming better known, especially with the advent of wellness care reimbursement. There are many national pet insurance companies; most of the reputable companies have been based on “property insurance” coverage for pets (indemnity insurance), with no discount or practice payments (they share the risk, they do not transfer the risk).


In the next budget cycle, consider asking your RDVMs to become professional in all the professional marketing efforts of their practice; offer affordable healthcare WITHOUT discounting.  Practices that are melding the use of Care Credit® money with Pet Insurance reimbursements, which are usually received BEFORE the first Care Credit® payment is needed, are finding that pet health care is now affordable at the higher fees needed to promote veterinary medicine as a career to staff and doctors.  In progressive practices, this information on Care Credit® and elected Pet Insurance companies are becoming a client “service” with their first visit, and repeated with most subsequent visits, especially when there is a clean Physical Exam, so Pet Insurance can be initiated before any pre-existing condition is noted.  In this manner, when any client comments about the “cost”, practice staff can show them the Pet Insurance superior/expanded plan reimbursement schedule for the same procedure(s), which is about 80 percent reimbursement, and show how economical the services have been.




Help the veterinary medical profession by helping yourself and your practice.  Learn to market niche, not just undercut prices.  Instead of saying, “Our clients cannot afford that (so the patient suffers)”, start saying, “How can I help my clients afford that!  (so the patient never suffers)”.  Consider developing a practice-specific line of veterinary healthcare services, not a line of discounted services and coupons; include methods of payment as well as methods of delivery.  The sequence is often developed as follows:

1)      The doctor discusses the left hand column of an “estimate” (which we call a healthcare plan for obvious reasons), while the outpatient nurse is running a travel sheet through the computer to get a pre-printed healthcare plan (EZVet®, AVIMark® and Cornerstone® now allows to the practice to change the name).

2)      The doctor closes the discussion of services needed (and wellness value of each service) with, “Is this the level of care you wish for Fido today?” (In marketing, this is called a “trial closure”, since it is not yet a commitment to buy anything).

3)      If it is a positive reply, the doctor turns to the outpatient nurse and says, “Let’s get the paper work signed and schedule Fido for an admission.”  Then the doctor departs the room/

  • The Outpatient nurse presents the HEALTHCARE PLAN (computer driven estimate from the veterinary software), now with the costs following the services discussed by the doctor, and presents the hospital admission consent form
  • She waits for signatures, and then asks, when applicable, “Will this admission be better today or later this week for Fido and you?”

4)      If it is a negative reply (as in, “We cannot afford this today.”), the RDVM usually  turns to the outpatient nurse and says, “We are deferring care for Fido for a week while we try symptomatic care; let’s schedule a follow-up call for this symptomatic treatment, and a recheck visit to ensure we have restored wellness.”  Then the doctor departs the room.  An alternative for the RDVM would be: