How to turn a profit with veterinary telemedicine

September 29, 2020

A look at the economics of incorporating virtual care in your hospital, and how to make it worth your while financially.

One of the primary hurdles veterinarians face when adopting telemedicine in their practice is that virtual care traditionally has been free. At the inaugural Veterinary Virtual Care Summit in August, Cherice Roth, DVM, vice president of veterinary operations at ask.vet, Beth Fritzler, DVM, CVPM, managing partner at Cascade Heights Veterinary Center, and Aaron Smiley, DVM, chief of staff at 2 Indiana veterinary hospitals, talked about the economics of incorporating telemedicine into veterinary practice, and how to profit from it.

The hurdles

When it comes to telemedicine, the hurdles do not appear to stem from pet owners. Clients are appreciative of the service because they perceive value in virtual care and are willing to pay for it. The resistance comes from the veterinary side.

Shifting the mindset

It is not easy to change the mindset of veterinarians and staff to start charging for something that typically has been offered for free. The first step is to remember that your knowledge has value and that you deserve to be compensated for sharing that knowledge, Roth told summit attendees.

It also helps to make the process more structured. Instead of informal callbacks or text-message responses, tell the client that you agree that the pet’s issue needs to be addressed, and that you can give them your full attention during a virtual appointment. Because the conversation has transitioned to a formal (albeit virtual) appointment, the owner sees greater value in it. It also provides a template for staff to explain the telehealth process and fees to owners.

Fritzler reminded attendees that human patients typically cannot talk to their physicians so easily. Instead, they typically receive a callback from a nurse, or set up a recheck appointment if they need to speak to the doctor. “We can easily expect the same in veterinary medicine,” she said.

Clinical and social confidence

Another hurdle facing veterinary teams is a lack of clinical and social confidence. We have spent years learning to become proficient clinicians, Roth said, and pet owners are paying for our knowledge and experience, not just a 10-minute chat. In other words, we need to believe that our words have power and value.

To practice telemedicine, veterinarians and staff must make time in an already busy schedule to learn new technological skills, and so should be compensated for this time. Further, incorporating virtual visits into the normal daytime schedule results in less nonbillable time spent after hours returning phone calls to pet owners. When these calls are incorporated into virtual visits during normal appointment hours, the practice is not losing money.

Financial benefits

Neither Roth nor Fritzler has experienced lower average transaction rates for virtual visits compared with in-person visits. Roth did note that owner compliance and willingness to pursue additional diagnostics are often higher when the visit is virtual, a fact that she attributes to the virtual visit allowing more time for education and discussion about why certain diagnostic tests are important. When recommended during a virtual appointment, owners can bring their pet in for a technician visit for diagnostic tests. If the virtual visit requires an in-person evaluation, then the client is credited the amount of the virtual visit and the appointment is converted.

Fritzler noted that virtual visits tend to be quicker than in-person visits because there is no need to put the pet in a room or to clean the room after the appointment. The increased number of visits per hour offsets any potential decrease in revenue per transaction. For this reason, daily revenue per doctor may be better than average transaction per doctor.

Finally, because virtual visits lower the barrier for receiving care for some new pets, they may help to bring in new clients. For example, an owner who is really reluctant to bring a pet into the clinic may start with a virtual visit and establish a relationship with the veterinarian. Subsequently, when they do need in-person care, they continue the relationship.

How to charge for virtual visits

Smiley mentioned 3 options for charging for virtual visits: subscription services, per appointment, or per unit time. All 3 veterinarians on the panel charge per appointment, and their fee is the same whether a visit is in person or virtual. That said, Roth noted that many younger clients seem to prefer subscription-based services, so that may be a pricing model to consider.

The panel agreed that triage services should remain free. It should be clearly stated that while triage can be provided at no charge, if the owner would like to talk to a doctor or if the pet requires medical expertise, a virtual appointment will be required and charged for. In addition, to offset the time spent sending text updates about patients, Fritzler adds a nominal fee for all hospitalized pets or those undergoing procedures. This allows doctors and staff to be compensated for their time without specifically billing for providing updates to owners.

Charging for virtual visits appears to be straightforward, but what happens when a virtual visit needs to be converted to an in-person visit? Smiley learned this lesson the hard way. Initially, when he recommended that a virtual visit convert to an in-person visit, he would waive the fee for the virtual appointment and instead charge the in-person visit fee. However, when a subset of patients recovered and no longer needed an in-person visit, that revenue was lost. Instead, he now charges for all virtual visits, but if an in-person visit is also required with a doctor (versus a technician appointment for diagnostic tests), he credits the cost of the virtual visit during the in-person visit. Costs are the same for virtual and in-person visits, but the timing of the charge is different.

Roth noted that one of the biggest hurdles for adopting and charging for telemedicine remains state-specific veterinary practice acts, and whether a veterinarian-client-patient relationship can be established solely by virtual means. The other hurdle, as Smiley reiterated, is for veterinarians to believe in our sense of worth and remember that clients are willing to pay for our expertise. We must remember that we have value.

Rebecca A. Packer, MS, DVM, DACVIM (Neurology/Neurosurgery), is an associate professor at Colorado State University College of Veterinary Medicine and Biomedical Sciences in Fort Collins. She is active in clinical and didactic training of veterinary students and residents and has developed a comparative neuro-oncology research program at Colorado State University.

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