Before you start marking up prices, take a hard look at your veterinary client compliance.
Dr. Karen Felsted, CPA, MS, CVPM, and Brakke Consulting's Jessica Goodman Lee, CVPM, helped practice owner Dr. Jane Felgo attract new clients and reverse a shrinking patient list (dvm360.com/whatif) . Now they're focusing on her average transaction charge.
Average transaction charge (ATC) is the average amount clients spend each time they visit the practice. There are two calculations that provide critical data:
1. Total practice revenue ÷ Total number of transactions = Practice ATC (This figure is the average of all invoices generated by the practice.)
2. Total medical revenue ÷ Total number of medical transactions = Doctor ATC (This figure is almost always higher than Practice ATC, since it excludes smaller transactions.)
Dr. Felgo discovers that her Practice ATC in 2012 was $125 and her Doctor ATC was $148. These figures increased about 3 percent from 2011, but she raised fees 3 percent in 2012
After reviewing Benchmarks 2011 data (dvm360.com/benchmarks), Dr. Felgo learns that the average Doctor ATC in those practices was $167—well above the $148 in her practice.
Dr. Felgo doesn't want to rely on fee increases to improve revenue, so she analyzes client compliance. Log on to dvm360.com/compliancesheet to download a spreadsheet to help make these calculations at your veterinary practice.
Compliance is worse than she thought. Dr. Felgo prints the most recent AAHA/AVMA Preventive Healthcare Guidelines (partnersforhealthypets.org) and schedules team meetings. Her next step is to put together a task force to tackle the following projects:
> Review the practice software reminders.
> Write preventive care treatment plans at every wellness appointment.
> Create a wellness exam template in the practice software to prevent error.
> Set up "Recommended" or "Declined" codes in your practice software to track recommendations.
> Schedule staff lunch-and-learns on preventive care.
> Begin a staff-training program on preventive healthcare to ensure that all new employees are well educated on the practice protocols and reasons behind them.
> Review all of the current client education materials in the practice and make recommendations for improvement.
Next month, you'll meet a veterinarian with a No-Lo practice—a hospital with little to no profitability—and learn how to recover revenue.