When it comes to veterinary wellness plans, Dr. Karl Salzsieder is blazing the trail.
A few months ago Dr. Karl Salzsieder, JD, of Yelm Veterinary Hospital in Yelm, Wash., revealed the nuts and bolts of his practice's DIY monthly wellness program in the article "What wellness plans can be for your practice" (see dvm360.com/annualplan). Soon the Veterinary Economics inbox was flooded with follow-up questions—clearly this was a topic you and your colleagues wanted to know more about. So we compiled the questions into a list of FAQs and went right to the source for more information on this hot topic.
But first, a recap: Wellness plan clients pay a flat fee each month ($18 to $39, depending on level of the plan) for a variety of veterinary services. The idea is for Dr. Salzsieder's clients to bring in their pets sooner and more often, which amounts to better veterinary care and more revenue.
Let's say his practice charges $30 a month for its wellness plan and has 375 clients participate. That's $11,250 per month, or $135,000 per year, plus sign-up fees. The plan is set up to auto-deduct the fee from clients' checking or savings accounts on the first of the month, so the practice sees revenue without fail before the door opens that day, regardless of the season or the weather.
Of course, some practitioners worry that wellness plans are just discounts in disguise. While it's true that in most plans the total medical value of all services is discounted about 40 percent to 50 percent, clients don't always use all the included services. Plus, the demand for services generated by more frequent visits to the practice leads to additional revenue that more than exceeds what is lost through the discounts.
Dr. Salzsieder's wellness plans offer unlimited visits during office hours. That way clients can visit the practice to ask questions without worrying about paying; it's already part of the package.
Now that you know the basics of the plan, here are the answers to those burning questions.
1 DO CLIENTS ABUSE THE UNLIMITED OFFICE CALLS?
"I don't like to use the term 'abuse' just because a few clients come in once a month with questions they wouldn't normally pay to ask," Dr. Salzsieder says. In fact, he believes that the office call charge is the biggest barrier to pets receiving the veterinary care they need. So eliminating that charge is the ultimate barrier smasher—his clients no longer hesitate to come into the clinic and ask minor questions. After all, those "minor" client questions can sometimes shine light on bigger health issues.
The plan also keeps clients from skipping follow-up appointments. "Clients will say, 'My pet doesn't look bad. I'll just wait and see what happens,'" Dr. Salzsieder says. "Now folks come in more often. And when they do, they buy support supplements and treat minor issues they'd previously ignored, which generates a lot of income."
The unlimited office calls don't slow down his staff, either. Here's why: Clients make an appointment during regular office hours (weekends and holidays aren't eligible). Once they've seen the veterinary team and the pet has been examined, they must leave the pet at the clinic and allow at least four hours for any additional work necessary. Dr. Salzsieder also offers a comprehensive exam once or twice a year. This is also a drop-off appointment. That way staff members can work these patients in during slower parts of the day. You don't increase your labor costs because you're paying employees to be there anyway.
2 WHAT DO YOU DO IF A PET DIES OR A VETERINARY CLIENT MOVES AWAY? DOES THE CLIENT RECEIVE A REFUND?
Dr. Salzsieder's wellness plan contract clearly states, "No refunds." (See more details about the contract here.) However, if the pet dies or the owner moves away, the client has two choices:
> The veterinary client can pay retail value for the services used so far, including a charge for every office call, and receive credit for monthly payments made to date.
> The client can finish out the monthly payments until the end of the wellness plan contract.
The client chooses the option that's most beneficial to him or her. "If a dog got one vaccine and then got hit by a car, it would be better for the client to pay retail value," Dr. Salzsieder says. "But usually it's a lot cheaper to just finish the payments."
3 HOW DO YOU HANDLE MONTHLY PAYMENTS AND THE AUTOMATIC RENEWAL PROCESS?
When clients sign up, they're required to pay their first month's payment in advance plus the membership fee. Then, each month, the practice gives the list of client names to its bank, and the payments are automatically deducted from clients' checking or savings accounts. This process is conducted under the auspices of the National Automated Clearinghouse Association (NACHA), an organization that standardizes the automatic deposit and debit process for banks. If you tell your bank that you're interested in setting up a series of these NACHA transactions, they'll guide you through the process. Dr. Salzsieder's bank doesn't charge him extra fees because he's a longtime client, but some banks may charge for this service.
Dr. Salzsieder doesn't accept credit card payments for two reasons—it's expensive and it's labor-intensive. He tried accepting credit cards at first and quickly learned that it wasn't feasible. "My staff would have to manually process each payment," Dr. Salzsieder says. "I can't have my team sitting around processing hundreds of payments every month. Plus there was the additional credit card charge."
As a courtesy, his practice mails a warning letter 30 days before the client's contract automatically renews, giving clients a chance to opt out. However, very few cancel once they sign up. "We have an 80 percent renewal rate," Dr. Salzsieder says. "Once clients are on the plan, they don't want to quit. They love these plans."
4 WHAT PROMOTIONAL TOOLS DO YOU USE TO INFORM YOUR CLIENTS ABOUT WELLNESS PLANS?
Dr. Salzsieder hasn't spent a dime on public marketing, yet hundreds of his clients have signed up for the wellness plans. His secret? When clients are short on cash for, let's say, dental extractions, his staff explains how the plan can help cut the cost. "They say, 'If you sign up for a wellness plan, it includes routine dental work and it may cut the cost in half as far as today is concerned, depending on the extra work that is needed,'" Dr. Salzsieder says.
The practice also displays posters in its exam rooms explaining the wellness plans. If veterinary clients are interested in learning more, they ask, giving team members a chance to answer any questions and sign the client up if he or she agrees. Now that all his employees are trained, Dr. Salzsieder says, it only takes a few minutes to enroll each client.
Plus, a staff incentive motivates team members to spread the word. If the receptionist is swamped, team members can take care of the paperwork in the exam room so all clients have to do is pay at the front desk. "The staff is excited to do it," Dr. Salzsieder says. In order to earn the incentive, team members write down how many clients they sign up—or help sign up—every day. The staff incentive is paid as soon as the client signs up.
The plans encourage clients to come in year-round which, of course, benefits the pets but also your team. "Staff members call up clients during the off season and tell them what services they have left on their wellness plan," Dr. Salzsieder says. "Those calls get clients into the practice during slower months, and that way you don't have to send staff home."
5 HOW DO YOU ACCOUNT FOR PRODUCTION REVENUE FOR DOCTORS WHO ADMINISTER WELLNESS PLAN SERVICES?
The doctors that do the wellness work at Dr. Salzsieder's practice get production credit (just like for their other work) but on a fee schedule that is either 50 percent of the regular fee schedule or, due to negotiations, 70 percent of retail. "The 50 percent rate is about what the fees come to if clients redeem all the services offered in the wellness plan," Dr. Salzsieder says.
The doctors get their production credit when the work is done, at a rate of usually 22 percent. They don't get any production credit for office call examinations, because they're free with the wellness plan.
6 WHAT'S INCLUDED IN THE COMPREHENSIVE EXAM REPORT?
Dr. Salzsieder's wellness plans include two comprehensive exams a year for adults and one comprehensive exam per year for pediatric patients, complete with a nine-page evaluation of the patient for the client to take home. This feature is a great selling point because he doesn't offer comprehensive exams otherwise (valued at $135 for each examination)—they're only available with the plan. The comprehensive exam includes these components:
√ weight and body condition
√ coat and skin condition
√ presence of lesions
√ abdominal palpation
√ urogenital exam
√ rectal exam
√ ear exam
√ cardiovascular evaluation
√ neurological evaluation
√ flea control prescription (just to make sure the patient is current and that the products are working).
Click here for an example of the comprehensive exam report Dr. Salzsieder fills out and sends home with clients.
Dr. Salzsieder has offered the veterinary wellness plans for four years now at this clinic and more than 400 clients are on board. Clients aren't afraid to ask questions and his staff is busy year-round. "It's a great system," Dr. Salzsieder says. "Now, our doctor team gets to practice better veterinary medicine."
Wellness plans are an important way to smash through the barriers that keep veterinary clients away. They eliminate the cost per visit so you and your clients can focus on patients, and they could end up generating more revenue for your practice. Everyone wins.