What the heck do I charge for digital radiographs?
Denise Tumblin, CPA
Denise Tumblin, CPA, is president and owner of Wutchiett Tumblin and Associates, a Columbus, Ohio, firm offering management advice as well as valuation and acquisition services to equine and companion-animal practices. Tumblin merges her business skills, farm background, and personal interest in companion, equine, and food animals to assist clients in achieving their goals.
Figure out the best approach for your practice to meet your veterinary clients' needs and keep your practice financially healthy.
Photo courtesy of Steve Dunwell, Steve Dunwell PhotographyCalculating the cost of services such as digital radiography presents a challenge for veterinary practices. You have to factor in labor, the cost of all necessary materials and supplies, facility and equipment costs, and administrative overhead. This exercise might seem like a lot of work, but it provides a huge reality check for you and your team on the expense side of the pricing equation. Do your fees truly cover your costs, or are you in the red? Traditional thinking related to setting fees looks like this:
Cost + profit = price
When your costs increase, the easy solution is to raise your prices to maintain a reasonable profit. But this strategy might not be feasible if your community is economically challenged or your fees are the highest for the area. These scenarios might require a different approach. You start with the price the clients will accept and manage your costs to maintain the desired profit margin:
Price – cost = profit
(Also, don't forget that it's essential to talk to your cash-strapped clients-and isn't that really all of us these days?-about alternative payment options, such as pet insurance and third-party payment plans.)
If you want to be one of the best, there's no need to dream it up yourself.
You spend all kinds of time and energy healing animals and keeping clients happy. But you know you need to focus on those other feel-good things ... like increased revenue, better leadership and a practice that runs smoothly.
And you think you have to figure that out all by yourself.
Guess what, dear reader? You don't. You get your hands on Benchmarks 2016: A Study of Well-Managed Practices. And you let those all-star practices-the ones that provide top-notch animal care while making serious bank-show you the way.
Benchmarks 2016 has action steps to ...
> increase profits (and client and patient benefits through communication)
> fuse leadership and management (for a team-based culture with empowered employees)
> take advantage of technology (developing your goals and mapping out a strategy)
> get ready for transition (by prepping yourself, your practice and your buyer to ensure your practice's legacy)
Here's another strategy. At WTA Veterinary Consulting we have figured out the ratio between some diagnostic imaging fees and the exam fee for Well-Managed Practices. Here they are:
Your exam fee x 3.067 = Your price for digital radiography (two views, 8 x 10)
Your exam fee x 1.306 = Your price for an digital radiograph (additional view, 8 x 10)
Your exam fee x 4.875 = Your price for an abdominal ultrasound
For even more input, check out the median diagnostic imaging fees from Well-Managed Practices in the chart below.
Diagnostic imaging fees from Benchmarks 2015
Service Median fee Digital radiography: 2 views, 8 x 10 $160 Digital radiography, additional: 1 view, 8 x 10 $60 Digital radiography: 2 views, 10 x 12 $155 Digital radiography, additional: 1 view, 10 x 12 $59 Dental digital radiography: 1 view $32 Dental digital radiography: 2 views $45 Dental digital radiography: 3 views $63 Dental digital radiography: 4 views $80 Dental digital radiography: 5 views $89 Dental digital radiography: 6-8 views $90 Abdominal ultrasound $260 Chest ultrasound $265 Chest and abdominal ultrasound $375 Ultrasound-guided biopsy collection, liver $150 Outside interpretation, radiograph $85 Outside interpretation, ultrasound $102
Source: Benchmarks 2015: A Study of Well-Managed Practices
Denise Tumblin is president and owner of WTA Veterinary Consulting in Columbus, Ohio, and author of the Benchmarks series of Well-Managed Practice studies co-published by WTA and Veterinary Economics. This article is adapted from Benchmarks 2015: A Study of Well-Managed Practices.