Vaccines aren't dead, but your veterinary practice's fee schedule may be

Article

Follow these 10 steps to rejuvenate your practice's fee schedule and pricing strategy

"All glory comes from daring to begin."

— Eugene F. Ware

Do you remember hearing about the practitioner who charged $85 for a rabies vaccine? It wasn't that long ago.

In the 1980s, James F. Wilson, DVM, JD, championed the concept of free vaccines. He opined: "Do the physical examination and assessment, and give the vaccines for free." That idea sunk like the Titanic. But it may have been about 30 years ahead of its time.

Consider these trends:

  • Verizon tried to sneak in a $2 fee on phone bills paid online. When the company got slammed in the media, it backed off.

  • Bank of America tried to sneak in a $5 fee for ATM use. When the company got slammed in the media, it backed off.

  • Netflix tried to slip in a little increase in its monthly fees. When the company got slammed in the media, it backed off.

  • HP tried to split in two. When the company got slammed, it backed off.

Consumers have given us notice: The marketplace has changed forever. Consumers are smarter, more savvy and on the move. In fact, they're "fracturing" each dollar they spend.

What does that mean? Consumers are willing to split up their purchases on veterinary services for a perceived value. We can see it with an increasing use of Internet pharmacies. Wal-Mart's pharmacy pricing has gotten their attention, too. Additionally, we see local human pharmacies pushing to provide veterinary drugs to pet owners.

The traditional middle-market practice where high vaccine fees subsidize complex inpatient casework has created opportunities for niches to emerge. This single issue is one big reason wellness-only practices, spay/neuter clinics and vaccine clinics are viable. They can provide these specific services at a lower cost to the public, because they're not burdened with the extreme overhead of a full service and heavily capitalized traditional practice's inpatient zone.

Today, practice managers must price services based on the cost to deliver the various and specific services previously subsidized with a vaccine subsidy mentality.

Don't forget the law

When it comes to administration of rabies vaccines, life gets tricky. Some states require that a veterinarian give the vaccine. Other states require a physical examination prior to vaccine administration by the veterinarian. Some of these same states say that requirements aren't needed in the "vaccine clinic" setting. Consumers see this contradiction and increasingly seek value-priced options.

As was recently seen in Oregon, veterinarians are defending their turf on the physical examination as the precursor to the rabies vaccine. This is a little bit like the Titanic after the crash. Consumers object.

If a veterinary board were to face a legal challenge on the physical-exam mandate prior to vaccine administration or whether a veterinarian specifically must administer the vaccine (and not a licensed technician working for the veterinarian), we would expect these mandates to be overturned.

The court mandate would be likely based on three premises: 1) antitrust and unreasonable restraint of trade; 2) consumers' right and responsibility to select the "level" of care; and 3) the arbitrary nature of these rules.

You can go into Walgreens day or night and get a flu vaccine. There isn't a requirement for an appointment or physical examination. And the human vaccine reaction rates are higher for these products than what we see with modern rabies vaccines. Children can go to vaccine clinics, too. A nurse is permitted to administer vaccines in a pediatrician's office. And, most importantly, consumers notice this disparity.

As pet owners look for value-priced vaccines, the biggest danger to the veterinary profession is the lost opportunity to engage clients in meaningful discussions about preventive health care and the identification of medical problems before they turn into a crisis.

The biggest loser in this equation is the pet. In purchasing "value-priced" vaccines, clients don't receive the education they need to make informed choices about everything from preventive care to serious conditions.

The second loser is the veterinarian because it seems that about 50 percent of pet owners get their three-year vaccines every third year, period.

The cornerstone to growth and excellent care is client education. Make vaccines accessible, separate the vaccine fees from the professional services fees, and use this time and this issue to build consumer trust in your recommendations.

Here are 10 steps that can help:

1. Administer vaccines with the exam. A technician working with the doctor should complete the physical exam. When problems are identified, pick the most significant issue to be addressed and set up a separate visit. The visit might take place at the time of the appointment or at a future time.

2. Break up the year. Encourage clients to break their annual visits into three steps. Permit clients to complete the physical and vaccines separately, but separate out annual testing, too. It's easier to track the pet's weight with this pattern, and it helps your clients bond to your practice.

More than 50 percent of all "vaccine only" patients have issues to be addressed, but less than 5 percent will have an issue that precludes vaccine administration. So, do the screening, and recommend the follow-up care.

3. Perform real "annual" testing. Forget trying to do everything in one visit. A good and inclusive geriatric screen that includes CBC, SMA, MSU Thyroid, ESR, UA and ECG can be done during a slow time.

4. Create peak-time activities. Set up appointments for these inpatient activities. Try drop-off appointments, geriatric screening or testing days with technicians. Consider shuttling inpatient casework to a "slow time of the week."

Set up your monthly schedule to address long appointments like behavior, short appointments like suture removal, times for urgent care cases and other slots for elective orthopedics.

5. Start "escrow" accounts. They can help fund veterinary care throughout the year. The program encourages clients to put a set amount into their account at the clinic every month. You can start with $50 per month. This gives clients a line of "credit" at the clinic for needed services. Annually adjust the amount for the next 12 months as needed.

If desired, you could offer a 5 percent discount on this escrow account on all services.

6. Start slowly. Perhaps you should start by setting up vaccinations one afternoon per week. Only accept appointments, and only accept five cases per week.

7. Use a metric that focuses on the patient, not the client. Push down the average client transactions and push up the annual services per patient to get clients back in the front door. (See DVM Newsmagazine, "ACT Is Dead, Long Live ASPP; Sept. 2010.)

8. Make them obsolete. I'm referring to vaccine clinics. When one is faced with competition, the best strategy is to fight fire with fire. Beat the vaccine clinic prices for the rabies three-year vaccine. Give clients a reason to find you.

9. Danger is the mindset. No change means no progress.

10. Assess your situation. Where are you in terms of revenue: thriving, dying or stagnant? Consider your business plan, your direction, your future and your position in the community. Consider the issues presented in this column and evaluate how they might affect or benefit your practice strategy. Then, all you need to do is adjust your business plan. Get ready to smile at the results.

Dr. Riegger, dipl. ABVP, owns Northwest Animal Clinic in Albuquerque, N.M. He can be reached at nwanimalclinic.com, by e-mail at riegger@aol.com or by calling (505) 898-1491.

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