Some financial changes could have short-term gains but long-term losses
Editor’s note: All names and businesses in this dilemma case are fictitious, but the scenario is based on real occurrences.
Vista Veterinary Center is a big place. It is privately owned, but it is not a specialty center; it is just a busy general practice. It is true they have a weekly visit from a cardiologist, a staff member skilled at ultrasonography, and a veterinary dentist. Nevertheless, the 9 veterinarians and 45 support staff pride themselves on being a highly service-oriented general practice.
A clinic of this size is a managerial challenge. The 3 hospital managers, in consultation with the owner, were charged with maintaining a cutting-edge medical practice and simultaneously turning a significant profit. As a result, a large accounting firm assisted the Vista Veterinary Center in the management of all financial issues. They didn’t only do basic balance sheet accounting but also advised on recommended expense parameters and income projections.
Recently, the accounting firm recommended it would be more profitable to decrease the number of veterinary technicians for each veterinarian. Previously, a hospital manager had assigned 2 technicians to each veterinarian while they were on duty seeing patients. The financial consultants recommended 1.5 technicians per veterinarian. In addition, they recommended an electronic call-screening service to efficiently answer all clinic calls while decreasing the amount of receptionists handling this duty. Finally, they suggested that after-hours calls to a designated doctor on duty should be eliminated and forwarded to a local emergency care facility. These recommendations would result in substantial savings and enhance the bottom-line profit for the veterinary center. Answering the phones with a computerized introduction that directs a call and offers the ability to leave a voice mail is
The clinic’s administrative team arranged a meeting with their financial consultants to discuss these recommendations. Administrators clearly understood the potential and intent of these suggestions. However, they disagreed with the recommendations, believing them to be excellent profit-making ideas but also seeing them as short-term gains and long-term losses. Reducing the technician to veterinarian ratio would certainly save money, but it would also decrease the productivity of the doctor by reducing their technical support. Most importantly, receiving care from 2 technicians was perceived by the pet owner as more personalized treatment.
The administrators used the analogy of a veterinary clinic being like a pediatric office. Their clients appreciated the phone being answered by a courteous and caring person rather than an electronic entity. Administrators also suggested the removal of after-hours access to staff veterinarians would be shortsighted. After-hours calls relieved client anxiety, offered viable solutions, and were valuable to building the practice.
The administrators believed the cost-saving recommendations would negatively affect the culture of the practice. This culture is what preserved the loyalty and goodwill of the practice’s clients. As a result, the administrators encouraged the accounting firm to continue making cost-saving recommendations. Their objections were based on experiences that clinic team members had observed that could not be accurately expressed in the spreadsheets of the accounting team.
Do you think the administrators were wrong to resist these money-saving recommendations? We would like to know.
There are many ways to achieve an ideal bottom-line profit. Cutting staff and increasing computerized client interaction are certainly effective; however, we must remember that veterinary practices are in it for the long haul. The culture of the practice ultimately leads to a growing client base and an increased bottom line. Pet owners want to be up close and personal with their animals’ caretakers. A thoughtful mix of modern technology and personalized veterinarian/client interaction will serve both the practice and its bottom line.
Marc Rosenberg, VMD is director of Voorhees Veterinary Center in Voorhees, New Jersey. Although many of the scenarios Rosenberg describes in his column are based on real-life events, the veterinary practices, doctors, and employees described are fictional.