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Less Is More

Fine-tune how your hospital is run so that you don’t have to work so hard.

Less Is More
Having an appropriate management team in place would fall under the umbrella of practicing smarter, not harder.

A great catchphrase is: “Practice smarter, not harder.” But what does it mean exactly? Here’s what veterinarians and practices can do to bring the concept to life.

Leverage Your Team

Leveraging has to do with the number of full-time support staff you have compared with the number of full-time doctors. The “normal” practice has a ratio of 3-to-1, while a highly leveraged practice might be 5-to-1. One difference between the two practices is that in a 5-to-1 hospital, a veterinarian can generate from $100,000 to $300,000 more per year. This is because veterinarians in a 3-to-1 practice likely do their own cytology, place IV catheters and take radiographs, which should not happen in a 5-to-1 practice. The doctors in the 5-to-1 practice have more time to focus on medicine and surgery and can delegate more tasks to the support team.

A highly leveraged environment can be more challenging and fulfilling for the team, and it allows doctors to spend more time doing the things they most enjoy.

When I speak of leveraging, I do not mean a practice should simply hire bodies to achieve the desired ratio, but instead, the intent would be to hire, train and develop highly skilled health care team members. The team must be very well trained.

This brings me to my second thought on practicing smarter, not harder: Too many practices view employees as replaceable commodities and don’t devote the necessary time and resources to training and staff development. I believe in investing in your team and recommend a phase training program, which takes all the duties and responsibilities an employee will be expected to know and breaks them into four-week modules. A phase training program is formatted so that each skill can be taught or evaluated by the employee’s supervisor and verified by management.

I have developed phase training programs for almost every conceivable position in a veterinary hospital, from kennel attendant to veterinarian and everything in between. There is not a better or more comprehensive way to train team members. It does take time and effort, but the rewards are great.

Develop a Management Structure

No matter the size of your practice, you need a management structure. A smaller practice might employ only an office manager, while a larger practice might have an office manager, team leads, human resources manager and hospital administrator, to name a few. The bigger your hospital, the more sophisticated your management structure will be, but every practice needs one.

Most veterinarians do not wish to be managers. They wish to be veterinarians and they should be, yet the management of the practice needs to be addressed. Ask yourself what tasks you do daily or weekly that could be delegated to someone else. Do you do inventory, payroll, accounts payable or performance reviews – or pick up paper towels at Costco? Would your time not be better spent doing medicine or surgery, or just enjoying time with your family? So, having an appropriate management team in place and effectively delegating tasks would certainly fall under the umbrella of practicing smarter, not harder.

Watch the Numbers

Some veterinarians look at their checkbook balance at the end of each month and decide then whether they are doing well. I do not consider that to be practicing smarter. On the other hand, unless you are a person who really likes numbers and wants to spend a lot of time working with them, the number crunching can be overwhelming.

Many CEOs of Fortune 500 companies use a dashboard or scorecard. They come up with key economic indicators that they watch when monitoring their companies. If the indicators are negative, the CEOs find out why and work to hopefully correct the situation.

What are your key indicators? What do you look at to know whether your practice is doing well? (Hopefully, your answer isn’t your checkbook balance.)

Key indicators should keep you informed of your practice’s financial health. They are easy to obtain from your veterinary software and accounting program. If you have a manager, he or she should report the information to you monthly. If the numbers are not what they should be, or they start to go in the wrong direction, you can then dig further to find out why and correct the problem. Keeping yourself informed and on top of the hospital finances will help you to practice smarter, not harder.

Partner With Vendors

Some business activities are better outsourced than done within the practice. Examples would be client reminders, payroll, social media and website management.

When practices switch from doing reminders in-house to using an outside service, you will see an increase in reminder effectiveness. Furthermore, you have the option of email, text or postcard reminders that can be sent weekly. The benefits far exceed the cost and doing it will free up some of your team members for other projects.

Outsourcing to a payroll service is great, too. Many practices attempt to do their payroll in-house, or even worse, a practice owner will take the payroll work home or enlist their spouse. Payroll services are one of the best bargains out there. You provide the company with the employee hours or salary amounts and the vendor will issue checks or, even better, make direct deposits. Payroll taxes, quarterly returns and year-end W-2s are handled as well.

Turn Little Numbers Into Big Numbers

One key economic indicator that needs to be monitored in a practice is the doctors-per-client transaction. This number is derived by looking at the services a doctor provided and the income generated from those services. In order for a service to be counted as production, the doctor must be involved in its delivery. Therefore, if a refill prescription is authorized and the doctor did not talk with the client but only noted in the record that the medication can be refilled, the doctor would not receive production credit for the refill.

A full-time veterinarian can generate 3,000 to 3,200 invoices a year. The average professional client transaction was about $200 in 2020 nationwide. So, if you had 3,000 invoices a year at an average of $190, you would generate $570,000. Or you could have an average professional client transaction of $290 and only do 2,000 invoices a year, which would generate $580,000. Which would be practicing smarter, not harder?

When a veterinarian’s transaction number is around 3,000 a year, the hospital is what I normally call a “fire engine practice.” It is very busy, clients are waiting and the focus is on getting pet owners in and out so that the practice doesn’t fall further behind. Some practice owners enjoy that environment, but many do not.

I also find that when a practice is in fire engine mode, the doctors’ average professional client transaction goes down. If the veterinarian can slow the practice, they can spend more time with clients. Many times, this leads to further client education and the offering and delivery of additional services.

To be clear, I am not advocating the offering of services just to increase one’s professional client transaction. However, if more time is allowed, the doctor and team have time to educate clients about procedures such as the need for dentistry or bloodwork or make sure the pet is up to date on vaccines, flea control and heartworm prevention. Just as important, many of my clients report that they enjoy this type of practice environment more and feel less stressed and more fulfilled at the end of the day.

Little numbers can indeed become big numbers. If you increase your professional client transaction by just $20, you could boost your income by $60,000 a year without seeing one additional client. If you have multiple doctors in your practice, you should compare their PCTs.

Let’s take the concept of practice smarter, not harder from a catchphrase to reality. Are you practicing smarter or are you practicing harder? What can you change in your practice that would add to the quality of your personal and professional lives? Now would be the time to do it.

Practice Smarter columnist Mark Opperman is the president and founder of Veterinary Management Consultation Inc. and the founder of the Veterinary Hospital Managers Association. He assists veterinarians and their management teams with consultation services, seminars, webinars and a practice management school. His column won first place in the Florida Magazine Association’s 2020 Charlie Awards.


Some of the most important financial indicators in veterinary practice are:

  • Total income by month
  • Total expenses by month
  • Profit/loss
  • Average client transaction (ACT)
  • Number of new clients per month
  • Each doctor’s professional client transaction (PCT)
  • Number of transactions
  • Aged accounts receivable
  • Total accounts payable
  • Bank balances
  • Support staff costs as a percentage of gross revenue
  • Inventory costs as a percentage of gross revenue