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Practice for Profit
Organizational procedures can help a practice deliver consistent, quality care.
The hip bone's connected to the thigh bone. The thigh bone's connected to the shin bone ..." Believe it or not, these lyrics were part of a top 40's music sales when I was but a tadpole.
Gerald Snyder, VMD
Even cavepersons of ancient lore had to know some anatomy, even if it was to know where to aim the spear when a wooly mammoth was in the neighborhood! To be a successful surgeon, a thorough knowledge of anatomy is vital. Without that, you cannot restore any system to normality.
While we might have a half dozen anatomy texts on our shelves, management texts that point out the specific areas of strength a practice needs to prosper are few and far between. You might want to go online to my last three columns on the mathematics of successful practice to catch up, but today we list the "Do's of practicing successfully." The do not's are readily available to see. Just check out that practice down the block!
So, because it is near impossible to know how you and your practice have performed without written goals, here is a list of goals that I truly believe are attainable for every practice in America, provided that it opened where there are enough people interested in high-quality medicine, that it is well managed in a town with the demographics that can support a practice in your location.
With established goals, a monthly review will let you know whether you are closer or further away from the practice you desire.
Check off those that you are now attaining and what's left is your practice improvement program.
- 1. Fourty to 45-hour work week for all veterinarians.
- 2. Saturday is a family day for all staff in a solo practice. Any sick pet on Saturday got sick on Tuesday.
- 3. Emergencies are seen at emergency clinics properly staffed and equipped to monitor overnight.
- 4. Three weeks vacation for all veterinarians after two years of service.
- 5. Three weeks vacation for all paraprofessional staff after five years of service.
- 6. One week of paid continuing education time for all. (Not part of vacation.)
- 7. Highly effective non-veterinarian practice manager in place.
- 8. All personnel and non-medical business matters are handled by the practice manager according to an established and recently updated hospital policy manual without distracting veterinarians from their essential role of practicing medicine.
- 9. At least 2.5 qualified technicians per veterinarian.
- 10. Exam room technicians are used for all outpatient visits to assist veterinarians and record data.
- 11. Veterinarian does not enter estimates, services or fees into any computer.
- 12. Exam room technicians get nutritional and medical history before veterinarian arrives in the examination room.
- 13. Every outpatient has plaque disclosing solution applied before the veterinarian arrives.
- 14. All clients leave the practice with a written report card listing all of the areas examined and those abnormal findings requiring treatment.
- 15. $450,000 in professional income per veterinarian (includes pharmacy income).
- 16. $100,000 of paraprofessional income for each veterinarian in practice (boarding, grooming, diets and other retail sales).
- 17. Receptionists are knowledgeable about all over-the-counter items and are able to clearly explain to clients the pros and cons as well as the proper usage of these items.
- 18. Thirty-five percent to 45 percent net profit after rent and before veterinary compensation.
- 19. Fair rent (12 percent of appraisal) paid to practice property owner. Housing costs of a mature practice less than 9 percent of revenues.
- 20. Less than 10 percent annual staff turnover. No staff member is paid less than the hourly salary specified at httpwww.salary.com for an entry-level records clerk working in your zip code.
- 21. Health insurance with co-pay is available to all staff.
- 22. A mid-week, one-hour luncheon staff meeting is scheduled every other week.
- 23. All meetings have a prepared agenda, and minutes are kept as an appendix to every staff members copy of the policy manual received at inception of employment.
- 24. All staff has professionally prepared training materials and trains no less than two hours per week while on the clock.
- 25. Employees are tested on knowledge as part of the training program. A minimum passing grade on training is required for advancement in compensation and position.
- 26. Hospital staff payroll, excluding veterinarians, is 12-15 percent of monthly gross revenues. Hospital total revenues are five to seven times staff salaries.
- 27. All associates have employment contracts that include a liquidated-damages clause (check with your attorney. Never use a non-compete clause) for competing with the practice within a given distance for a given time after leaving the practice employ.
- 28. Associate salaries are based on a percentage of their dollar production.
- 29. Associate's vacation, continuing education, health insurance and any other benefits are included in and never additional to his or her percentage compensation.
- 30. Quarterly performance reviews of all staff members are performed to give staff feedback on how they can improve their skills where applicable and to commend staff for exemplary performance.
- 31. Four percent of annual gross is budgeted for new equipment updating existing equipment.
- 32. Laboratory revenues exceed 15 percent of gross revenues.
- 33. Dentistry revenues exceed 4.5 percent of gross revenues.
- 34. Radiology revenues exceed 4.5 percent of gross revenues.
- 35. Urinalysis and E.R.D. tests exceed 2 percent of gross revenues.
- 36. Urinalysis is performed at a minimum annually.
- 37. E.R.D. tests are performed on all puppies and kittens for purchase exams and biannually after 4 years of age.
- 38. One-hundred percent of all non-emergency anesthetic procedures have pre-anesthetic laboratory safety screens.
- 39. All fees are based scientifically on the applied demographics of the immediate hospital neighborhood and the average families' ability to afford quality medicine.
- 40. Sick pet examination fee is derived from the formula (53 x 10-5 x 2004 average family income x predicted area growth rate for 2004-2009).
- 41. Each doctor's average transaction fee for patients examined and treated exceeds 4.25 x office visit.
- 42. Hospital average transaction fee (all revenues including doctor's services, boarding, grooming, retail (year to date) divided by invoices (year to date) exceeds three times the demographically calculated sick pet exam fee.
- 43. Non-shopped fees are increased 2-3 percent per quarter to counter inflation (currently 8-9 percent in veterinary practices).
- 44. Shopped fees are increased at least five to seven percent per year.
- 45. Practice gross from diets, boarding and grooming income never exceeds 20 percent of total income.
- 46. Accounts receivable (not including held checks) does not exceed three weeks gross revenues. No patient is ever discharged without payment in full or held checks covering complete balance. All held checks are stamped on back with a notice "In the event that, for any reason, my bank fails to honor this check, the full amount and any additional bank fees may be charged to my credit card # __________.
- 47. No hold checks are accepted from any client not having a valid charge card.
- 48. Numbers of new clients are tracked and are steady or increasing.
- 49. Practice owner is able to place 10 percent of annual salary in a secure retirement vehicle.
- 50. Practice is valued as for sale every three years to assess management and feasibility for retirement asset.
Go for it! Check off what you have accomplished so far and have staff meetings to let your talented staff help you accomplish the rest.