Practice Smarter columnist Mark Opperman is the president and founder of Veterinary Management Consultation Inc., director of veterinary practice management at Mission Veterinary Partners, and founder of the Veterinary Hospital Managers Association. His column won first place in the Florida Magazine Association’s 2020 Charlie Awards.Read Articles Written by Mark Opperman
Every veterinary practice wishes to be charitable with nonprofit groups and disadvantaged clients, but the benevolence sometimes becomes a financial burden. In addition, having to turn down a charity or pet owner can be uncomfortable and stressful. So, let’s deal with these situations in a smarter, not harder fashion, devise a way to be generous and give back to the community, and be responsible to our practice.
I suggest you begin by establishing a budget for charitable contributions. The amount might be a percentage of your previous year’s gross or whatever you think is appropriate. Next, list all the nonprofit organizations you have worked with, along with others that might have requested services or donations. When you finish all that, choose the organizations you wish to support in 2022. Then comes the hard part: allocating the budget.
At this point, contact the selected organizations and tell them your practice will provide services or financial support and how much. That step is critical. Charitable groups need to know that while you want to be supportive, your practice does not have unlimited funds.
Be Upfront About Money
Let’s say you choose to work with an animal rescue organization. First, you need to advise the group that you will provide it with up to $15,000 worth of services in 2022, for instance. You then set up an account in your practice management software system and credit $15,000. As the rescue brings in animals, the practice provides the services and charges the standard, nondiscounted client fee. When services are rendered, the fees are charged to the account. Once the fund is depleted, the organization needs to pay standard fees for additional services. Then, when you plan for 2023, you can repeat the process and decide whether to work with the organization again.
If a nonbudgeted charity approaches you in 2022, respond that you set all donations at the beginning of the year and that you would be happy to consider the group next time. Such a statement might seem severe, but it’s necessary at many veterinary hospitals. We all wish to give back to the community and help pet owners who can’t afford our services, but yours is not a nonprofit business. You have obligations to yourself and your team members. Your practice needs to be profitable so that you can pay everyone well, provide fringe benefits, purchase equipment and update the hospital. Charitable contributions must be kept under control. If you don’t plan properly and you provide services and donations throughout the year without a budget, you might be surprised to learn how charitable you were.
Let Your DVMs Decide
Another area of concern is how your associate veterinarians handle charity situations. Clinicians are confronted with situations in which a pet needs veterinary care that the client can’t afford. Saying no to those clients is difficult, but again, you do not have unlimited funds.
One suggestion is to establish in your practice management software a charity account for each associate doctor. Then, decide how charitable you wish each doctor to be with your money. You might determine that each veterinarian is credited with $2,000 a year to be spent in whatever way the doctor sees fit. If a client cannot pay for services and the doctor wishes to charge the visit to the charity account, go ahead. Management’s permission isn’t necessary. Or if a client can pay only half the invoice and the associate wishes to charge the balance to the charity account, that can be done, too. The doctors must understand that no more money is available once their charity accounts are depleted. I’ve found that most practices fund each veterinarian charity account with $2,000 to $4,000.
Don’t Fiddle With Fees
What I outlined above raises another important issue. Should an associate veterinarian be allowed to alter prices or, in some cases, not charge for a product or service? No. Associate veterinarians should not vary from their practice’s standard fee schedule. They do not own the hospital. I have seen many employment contracts that state, in effect, “The employee must abide by the current and any future updates to the practice’s fee schedule. Varying from the established fee or failing to charge the established fee may result in disciplinary action up to and including termination.”
Such language might seem harsh, but as an employee, the associate veterinarian has no right to give away or discount services without the practice owner’s consent. This is why charity accounts can be so valuable.
I suggest you lock down your practice management software to prevent fee changes without management’s approval. Most software programs generate fee-exception reports. Say, for instance, your practice charges $95 for an IV catheter, but someone goes into the computer system and changes the fee to $65, assuming you permit such an action. In that case, you would see the altered change on the fee-exception report.
A Few Last Words
I am all for helping pet owners who are in financial need, but again, your generosity must have limits. Don’t forget that you can refer clients to commercial lenders or nonprofit organizations that assist pet owners financially or with services.
In the end, be charitable, but do so responsibly. Establish a budget for organizations you wish to support, set up charity accounts for your associate doctors, and lock down your computer so that the fees cannot be altered. Let’s make 2022 an awesome year for you and your practice.