CEO, Blue Heron Consulting
Stith Keiser is the CEO of Blue Heron Consulting and an adjunct faculty member at several veterinary schools. His passion for the veterinary profession extends into his role as managing partner in a handful of private hospitals. In his free time, Stith and his wife enjoy the outdoors with their dogs and horses.Read Articles Written by Stith Keiser
I’ve been fortunate to wear various hats in my career — hospital manager, veterinary association business manager, adjunct faculty member, consultant and small animal practice owner. The first one, which I’ve never removed, is the now-weathered, dusty, black felt Stetson of a mixed animal practice owner. That’s why I cringe every time I hear someone say, “You can’t make a career out of mixed animal practice.” I’ve heard it from burned-out practitioners as well as veterinary students who had been told there’s no future in mixed animal practice. Don’t get me wrong, though. The model of rural practice needs to evolve, but I don’t believe that those employed in it are doomed to fail.
I’m not here to discuss the philosophical merits of rural mixed animal practice. Instead, I’ll dive into the practical lessons I’ve learned and the strategies for creating a viable, sustainable mixed animal business. Whether you’re an aspiring or current mixed animal practice owner or even a small animal hospital owner, I hope you’ll walk away with actionable tips. So, let’s start by defining what a viable and sustainable practice is not.
I spoke with a mixed animal practice owner — let’s call him Dr. Smith — from the Pacific Northwest. He was at the tail end of a long career as a solo practitioner serving a small community and outlying areas. He had spent nearly three decades building relationships and meeting the need for large and small animal services. He hadn’t planned to retire (“I’ll work until I die.”), but health issues and unexpected living expenses necessitated a sale.
Unfortunately, Dr. Smith, his four team members and their hospital are a prime example of the traditional model of rural mixed animal medicine — that is, trying to be everything to everyone and doing it all on a budget. Dr. Smith was lucky to have built a good team, and everyone made a decent living. But sadly, nominal profit margins and the poor chance of recruiting an associate veterinarian, even in a region qualifying for student loan repayment, meant that Dr. Smith most likely would sell the assets and his hospital would be no more.
Practice owners like Dr. Smith exist from coast to coast. They found a rural area needing veterinary care but failed to create a business that would live on after they quit.
Fortunately, we don’t have to be in Dr. Smith’s shoes. The first hospital where I worked was a seven-doctor mixed animal practice in Colorado. After a few years there, I threw caution to the wind and partnered in a one-doctor mixed animal hospital in rural Nebraska. We were almost 50-50 small and large animal, primarily beef cattle and ranch horses. When the seller handed us the keys, he cautioned: “The small animal work — farm dogs and barn cats — gets us through the seasonality of large animal medicine. People don’t care to spend much on those pets, and even if they did, there isn’t much money to be spent.”
I often tell that story to veterinary students and say that when we bought the Nebraska hospital, its gross annual revenue was just under $500,000, with a small animal average doctor transaction (ADT) of $93. One year post-purchase and without touching our fees, the gross revenue grew to almost $750,000, with an ADT of nearly $197. All in an area where, we were told, “People don’t care to spend much on” farm dogs and barn cats.
The experience lit a fire in me and incited my desire to explore how viable and sustainable mixed animal practices could have a lasting impact on the rural areas they serve.
Over the past several years, in addition to remaining in mixed animal practice, I’ve worked under the direction of Dr. Melinda Frye and her team at Colorado State University as part of a federal Veterinary Services Grant Program. The team and I surveyed several hundred rural mixed animal practices across the Rocky Mountain and Plains states. We accessed financial records and learned about staffing and business models.
The results were encouraging. Our survey confirmed my belief that the mixed animal hospital isn’t a thing of the past. Indeed, it is alive and well from coast to coast, operated by those willing to evolve their business model, their medicine and, probably most important, their mindset. For anyone considering a career in mixed animal practice or currently in it, and for those watching from afar, I present these five discoveries.
1. Need and demand are not the same thing.
Whether you’re considering a start-up or hoping to hire an associate veterinarian or seeking to join or buy a hospital, understanding the difference between need and demand is essential. In laymen’s terms, which fits my level of comprehension, need is based on a population of animals, small or large, that needs veterinary care. Many rural areas have the need. On the other hand, demand relates to a client’s willingness to spend enough money to meet that need so that we, as veterinary professionals, can make a living and build a business. Often, the need exists, but the demand is absent or is undermined by our animal care philosophy and assumptions.
The American Veterinary Medical Association’s handy Market Share Estimator (bit.ly/3G8oWi4) can help you assess the need and demand. While primarily small animal- and equine-centric, it’s a valuable tool. Aspiring mixed animal practice owners can use the resource, in conjunction with cattle numbers from the U.S. Department of Agriculture, to test the waters. In addition to good old boots on the ground (speaking with and surveying producers), a veterinarian can determine the need and demand for services in general and run a litmus test on adding any.
2. When a segment of patients, small or large, is an afterthought, the quality of care, client experience and hospital viability suffer.
The seller of my former Nebraska hospital was a prime example of that principle. He didn’t particularly enjoy working with dogs and cats, and it was reflected in the thoroughness of care, how he trained his team and how he scheduled his workday. The same is true when large animal patients are secondary.
My current mixed animal practice in southeast Idaho faced the same challenge before I came aboard as a partner. The two seasoned, predominately large animal veterinarians had little interest in small animal medicine, so their attitudes reflected the protocols, level of care and client experience. Over time, as the doctors aged, the hospital swung from large animal predominant to small animal predominant as new associate veterinarians preferred the lifestyle, production and schedule of pet care. What was once a vibrant mixed animal hospital had become more of a small animal business.
Upon joining the team and renewing the practice’s commitment to mixed animal medicine, I helped assess the need and demand for large animal services and used the information to take a measured risk and make a series of investments. We hired a large animal predominant veterinarian to complement our mixed animal veterinarians and upgraded the equipment and facilities. The new associate, fueled by a passion for large animal medicine and armed with the resources she needed — medical, marketing and staffing — grew our large animal revenue by over $100,000 in her first six months.
The lesson? I am not suggesting that practitioners suddenly become passionate about something that doesn’t get them going. Instead, whether your preference as a mixed animal practice owner is small or large animal medicine, you owe it to your community to assess the opportunity. Then, if the results are favorable, invest in the people and resources to grow your business, unencumbered by your preference or mindset for how much a client should spend on a dog, cat, horse or cow.
3. You can’t be everything to everybody.
You’ve heard that line from small animal colleagues, and it applies to mixed animal practice, too. In this case, I’m not talking about the type of patients you see, but the type of client. Being in rural practice attuned me to practice owners who say they can’t practice thorough medicine because of the demographic they serve. Like the rest of the country, Rural America has A, B and C clients. If you want a high-volume, low-touch hospital that provides basic, affordable care, it’s generally possible in mixed animal practice. If you want a hospital built on relationships, thorough care and a consultative approach, it’s possible as well.
My old Nebraska hospital was in the county with the highest number of people on welfare in the entire state. That reality presented a significant challenge for us, but it didn’t sway our commitment to the level of care we wanted to offer or the role we wanted to play in the community.
Last summer, I was leading a veterinary student externship in eastern Kentucky when we visited a hospital in a county with a median household income 39% below the state’s already low median income. But guess what? The hospital’s compliance rate on preventives was four times the national average, and its prices were in line with national benchmarks. Will the hospital expand to five or six full-time veterinarians and gross millions upon millions of dollars in the near future? Probably not. However, it’s a multidoctor hospital with respectable and sustainable gross revenue and profit margins.
The externs were shocked at the hospital’s success. The two DVM owners shared that when they moved back to the area, they decided that not every client was right for their mission. They focused on consistently offering and delivering the highest quality of care in the area. That helped them build a thriving, rural mixed animal practice.
Whether you’re in mixed or small animal medicine, a practice owner or an associate, consider your personal “why” and ensure that the economics work. Then, focus your time, team and medical philosophy on your targeted clientele.
4. Prepare two profit and loss statements.
I learned that principle the hard way after beating myself up for years when I couldn’t get my cost of goods sold (COGS) where I expected them. A much smarter mentor suggested that even though the mixed animal hospital was one business, we should run two P&Ls to identify profit centers better and the opportunities for expense mitigation. Such a strategy ties into a much larger discussion on prices, but we now use the dual P&L approach to drill down into our product markups and fees. From orthopedic surgeries to farm calls, a detailed P&L allows practice owners to dive to a granular level, identify loss leaders and make price adjustments based on the clinic’s mission and the area’s support.
5. Schedule strategically.
Many traditional mixed animal practices want a veterinarian to split the day into small and large animal appointments — maybe cat and dog surgeries in the morning and on the farm in the afternoon. However, those of us in mixed practice know that any emergency (large or small animal) doesn’t wait.
Many of you probably heard from a large producer who suddenly decided he wanted you at the ranch the next morning. Do you reschedule the next morning’s small animal appointments, or do you tell one of your biggest clients to wait? It’s a rhetorical question that many of us have had to answer. The solutions to such a predicament will vary based on the number of doctors in a practice, but I’ve found that what works well (and have seen in a study) is to dedicate separate small and large animal doctors each day. This approach gives veterinarians the variety they want as mixed animal practitioners and allows a hospital to minimize the shuffling of schedules.
Efficiencies in scheduling and staffing also emerge when a doctor and the team can dedicate days to small or large animals. For example, when our caseload couldn’t support a full-time large animal veterinarian each day, we blocked a couple of hours first thing in the morning for haul-in appointments before starting small animal appointments. Then we blocked a couple of hours at the tail end of the day and into the early evening for farm calls. In addition, Friday was a large animal day. I don’t recommend what we did as a long-term solution, but it’s an example of how we grew the caseload to the point where we could support a large animal veterinarian each day.
“You can’t make a career out of mixed animal practice.” Au contraire. The considerations, strategies and resources I mentioned can refine the viability of mixed and small animal practices. There’s no one-size-fits-all approach, and I didn’t go into every strategy or tool, but what I outlined is a start. Success — as defined by financial stability, life in and out of the hospital, the ability to serve your community and the opportunity to build something sustainable — is within reach of every aspiring and existing practice owner.
To give clients the maximum time and improve efficiency, consider staggered appointments. That means switching from one daily schedule column per doctor to two or three columns. For those unfamiliar with staggered appointments, which are not the same as double-booking, the first 30-minute appointment might start at 8:30 a.m. and the second at 8:45. No. 3 is at 9 and No. 4 at 9:15.
The key to making everything work and not compromising client relationships or the quality of care is having an appropriate number of exam rooms and team members. A veterinarian can serve more patients when a hospital has the optimum physical plant and doctor-to-staff ratio. A doctor can rotate between two exam rooms while being supported by a technical team of three or four people. All that can keep the day on track.