A Large Animal Veterinary Practice’s Case for Production Pay

After reading Dr. Stacee Santi’s article, “The Shortcomings of Production Pay,” I had to weigh in on our practice’s experience. We are a large animal — primarily dairy — practice located in central Wisconsin. There are nine partners. The senior partner — myself — has ownership of 1/25, and all the other partners are 3/25 owners.

The article identified a number of shortcomings, but I think it is important to list the positives we have experienced during the past five years. On balance, our practice has grown significantly by using production pay, and it has led to a more team-like atmosphere. Some highlights:

• All partners and associates are treated the same. Partners split profits periodically. Associates have production reduced by 20% to cover 6% employer-guaranteed retirement contributions, partnership contributions to Social Security and Medicare, workers’ compensation, medical insurance, and other employment costs that partners have to cover 100% after they take production pay.
• On-call work is subsidized with a stipend for a night or weekend. About half the nights, there are no emergencies, but there is still a payment. If older partners want to trade or if younger vets want to do extra emergencies, they get paid. There is no “You owe me a night.” The practice loses money on emergency services but retains clients. The veterinarian is also paid production for the services provided during emergencies.
• If a veterinarian goes to an on-farm breakfast, or a school or 4-H club to present, they are paid by the practice for their time. We also pay an extra stipend for taking a veterinary student with you for a day. You are expected to slow down and invest time in that student.
• We pay for vacation, provided no calls are run that day, with no exceptions.
• We reimburse for continuing education time. If you go to a meeting, or you do it online in the evening, it is your choice; the pay is based on CE credits obtained.
• When associates move to production pay, their billing time and accuracy always improve.
• Before production pay, some veterinarians would disappear for extended periods. This no longer happens.
• Payment requires an elaborate spreadsheet program and a detailed general ledger, but it can be run in two hours each month.

Like every situation, there are downsides to production pay. But for our practice, the pros far outweigh the cons.