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Surviving in today's economic jungle
There's nothing unethical about trying to increase average client transactions.
There's nothing unethical about keeping close watch on your average client transaction and trying to increase it. In my experience, charlatanism and unethical medicine in the veterinary profession are rare to non-existent.
Increased monitoring of average client transactions is just one weapon of defense in a profession where excessive competition is the result of excessive graduation of private small-animal practitioners.
Daily I must seek locations for aspiring practitioners in a congested market. There is a plethora of small-animal practitioners in many areas of the country and a paucity in others.
The reason for a deficiency of service in large areas of the country is clearly economic.
It used to take a population of 4,000 to support each practitioner, but today that number is approaching 6,000 as clients more and more frequently opt for essential services only.
Thus an area that could support three DVMs can now support only two.
Result: The real income of each practitioner will decline in coming years.
It's still realistic to achieve a rewarding career in veterinary medicine, but one just has to be far more selective in the area one chooses to serve and more cautious in spending for construction and overhead.
Future "Practice of the Year" awards will go mostly to merged practices. Mergers are becoming the only practical way to afford castles dedicated to animal health.
Change, a buzzword for the times, is sorely needed, starting at the high-school guidance level. Veterinarians "never made a lot of money," as my prospective mother-in law was happy to relate to her friends many years ago. Show me a wealthy veterinarian today, and I'll show you a lucky real-estate investor.
There are few mature practices that are not suffering a decline in client transaction numbers and revenues.
Therefore it is important to maximize our per-client revenues ethically by being thorough in our examinations and communications to provide an improvement in the welfare of pet and client alike.
Polls indicate that clients are willing to give up new gadgets, sporting events, big vacations, expensive clothing and cultural events before important lifestyle changes like gym membership, dining out, premium cable and care of their pets.
Even so, the 15 percent of practices poorly managed before the recession will fail to survive the next five years. Graduates entering the profession will find fewer private-practice opportunities as they compete with a growing number of former associates from practices that were forcibly downsized.
While our veterinary colleges keep claiming that more graduates are needed to fill the country's needs, I must disagree.
When I was applying to veterinary colleges in — must I say it? — the 1960s, the need was for food-animal practitioners. Some colleges required six months of farm experience in an effort to shift the balance from small-animal medicine. That failed miserably, as more and more large-animal practitioners became first mixed-animal and then predominantly small-animal and finally small-animal exclusive.
That was a matter of practical economics when it became obvious that to pay a veterinarian $80,000 per year, clients must be billed $5 for each minute of service, and even a half-hour round trip to the farm meant $150 in non-recoverable income.
Today, the pressing need appears to be in government service with the Department of Homeland Security. Who among the freshman classes at our colleges today dreams of a career with the government?
I dreamed of being a zoo or circus vet, but reality intervened. Today, some 40 percent of graduates are going on to advanced studies, increasing their debt service, according to reports in this publication.
In human medicine, we are told that a physician should be able to settle his/her school debt by age 50. I believe many of our new graduates are going to work well into their 60's to meet their obligations.
Indentured servitude is very much alive today. So, what are some action steps for today's new graduate?
First, realize that the world has changed. Practices are striving to meet payroll with fewer clients coming in. A fixed-salary contract may be a dinosaur in today's economy. Productivity compensation is in. That's a good thing because everyone deserves to be rewarded for additional diligence and thoroughness in history-taking and communication with clients.
One of the first questions you need to ask is, what is the potential number of transactions available for me in this practice? If the current transactions are less than 12 per veterinarian per day, then potential compensation may be disappointing. A decade ago, a practitioner was not considered fully employed unless he or she was seeing 15 to 18 clients per day. Times change.
As transactions per veterinarian drops, so do income and employment.Look for at least 1.8 technicians per veterinarian. That is an indicator of services such as radiology and drawing lab samples being done by paraprofessionals, releasing veterinarians to diagnostic medicine and surgery.
Seek areas of growth, predominantly in the South or West, as tens of millions migrate from the North.
Divide the population by 6,000 to determine the number of veterinarians supportable in the area. It's no different than your school years. Homework and research are important.
Look for a practice with older owners seeking an exit plan for retirement and have stable or increasing revenues indicative of sustainability.
Practices selling for a year's revenues in the 1970s are now worth only half as much, cutting retirement income.
The Department of Commerce cites large numbers of veterinary-practice owners reaching retirement age, but you might be well advised to buy a pith helmet, because it's a jungle out there.
Dr. Snyder, a well-known consultant, publishes Veterinary Productivity, a newsletter for practice productivity. He can be reached at 112 Harmon Cove Towers Secaucus, NJ 07094; (800) 292-7995; Vethelp@comcast.net; fax: (866) 908-6986.