Look before you leap into wellness plans


Weigh the pros and cons before you commit to wellness plans in your veterinary practice.

I confess—I'm a wellness plan junkie. For years I've offered them in all of my practices, from traditional clinics to charter-owned Banfield hospitals. And I'm not alone on the wellness plan bandwagon. Many leaders in our profession view them as the cure-all for the myriad problems the profession suffers from, and quite a few practices have had good success with them. (See Dr. Karl Salzsieder's "What wellness plans can be for your practice," June 2011; dvm360.com/annualplan). But are they a cure-all for all practices?

Before you take the leap and jump on board with these package deals, it's critical to take a look at the specific needs of your veterinary practice. Here are some things worth considering.


Practice consultants have been beating "Don't discount your services!" into our heads for years. Most plans offer at least a 20 percent discount on all of the yearly wellness services and a 10 percent to 20 percent discount on most other services. And the hallmark of most plans is free exams—a big discount right up front. For years we've been trying to educate clients about the importance and value of an exam, and now we're not charging for exams at all?


What will happen to your practice statistics when you start wellness plans? When you take free exams, deep discounts, and monthly payments for wellness plans into account, won't you see a drop in your average client transactions (ACT) and average doctor transaction (ADT)? If you follow the standards for most practices today, you can throw all that out. You will now have to develop your own parameters to gauge how your practice is performing, with no one else to compare to.


Will you administer the plans in-house or jump on one of the plans being offered by several companies today? If you do it in-house, how much time and money will be involved? And what about doctors on production pay? How will monthly payments impact their pay and will it be hard to track? Will the uncertainty cause morale issues for these doctors? Will they happily give away free exams and discounted services?


One goal of wellness plans is to more evenly distribute the practice's cash flow throughout the year. Since many practices are seasonal in terms of revenue, this definitely holds appeal. But I find that most clients come in for basic wellness care in the summer and follow up with a semi-annual exam late in the year. Most of these exams generate very little revenue, so you'll be stuck with higher laboratory fees and payroll expenses.


There's no denying it—the wellness plan concept is good. Clients come more often and your practice benefits from consistent monthly payments. If you do it wholeheartedly, it's a practice transformer. But it's not a fit for everyone. I recently sold a practice to an associate of mine. After two months, he told me this: "I'm not sure the wellness plan is such a good thing. I had a great client come in today for a recheck and he walked out of here owing almost nothing. This was a client that would have no problem paying full cost. Why am I giving him a discount?"

He's got a point. In my experience, it feels like I've taken all of our A-plus clients—ones who didn't complain about cost—and given them at least a 20 percent discount. We've got so many clients on our plans now that there are days when it feels like we have no paying clients—especially during our slow season. The reality is that what works for some veterinary hospitals may not work for others. But I'm too entrenched and too much a fan of wellness plans to back out now. You've still got a choice—choose wisely.

Veterinary Economics Editorial Advisory Board member Dr. Jeff Rothstein, MBA, is president of Progressive Pet Animal Hospitals and Management Group in Michigan. Please send questions or comments to ve@advanstar.com

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