Why a wealthy veterinary clientele didnt work for me

May 21, 2019
Kyle Palmer, CVT
Kyle Palmer, CVT

Long-time dvm360 magazine and Firstline contributor Kyle Palmer, CVT, is hospital manager for VCA Salem in Salem, Oregon, as well as a practice management consultant for a number of other hospitals.

When I took a new job as hospital administrator after 26 years at a new veterinary practice, the differences in associate pay, standards of care and geography just didnt work for me.

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After working for 26 years at the same veterinary practice, I didn't seem like the type of person to explore other employment options. But significant changes at my workplace and the wishes of my longtime employer forced me to do just that.

While I never thought seriously about leaving my former practice, I did often wonder how other hospitals operated-how day-to-day tasks were done, how employees and clients responded to hospital standards and how the practice of veterinary medicine differed. As administrator at my new hospital, I saw firsthand how the variables in our industry affect the daily routine of veterinary staff, particularly with regard to how associate pay, practice standards and the hospital's location impact daily decisions. I also decided to leave. Here are the reasons why.

Contrasts in veterinarian compensation

At my first practice, veterinarians were paid a straight salary. The practice owner encouraged a common-sense approach to veterinary care and worried that paying doctors on production might incentivize them to treat patients differently. I shared that opinion, fearing that production-based pay would result in a noticeable increase in the average invoice and client concerns over that number at the bottom of their invoice.

My latest practice long used a combination of base pay and production bonus (ProSal). To my relief, none of the veterinarians ever altered their course of treating a patient to earn a bigger paycheck. I don't know if that's true in every practice that pays on production, but it definitely would have been a deal-breaker for me.

• People picking their days. That said, other aspects of practice are affected by how veterinarians are paid. I noticed early on that doctors were covering Saturdays but were wary of how many they worked and how that impacted their weekly schedule. At first I thought nothing of it-doctors rotated through Saturdays at my old practice, and I'm sure they'd rather have been home with their families or off doing something fun. As a reward for working Saturdays (and being on call), our doctors had always been granted the following Friday off with no reduction in salary.

An associate at my latest practice who was often asked to cover Saturdays asked if she could add Saturday to her normal weekly schedule instead of taking a different day off. I was surprised: Was she that altruistic (or crazy)? To be clear, she did say that not stiffing the practice with a whole-doctor reduction on what would have been her traded day was important to her, but that wasn't her only motivation.

When doctors are paid on production, the revenue they generate each day is part of their anticipated paycheck. A deviation from that schedule can amount to a cut in pay. The practice is open for two hours less on Saturdays than on the weekday that would typically be traded for working that day, so by that measure alone the veterinarian is “paying” to spend a weekend day at work. Add to that the fact that no anesthetic procedures are planned for Saturdays, making them a day with slightly less gross revenue/production even on an hour-by-hour basis, and it's not hard to see why someone would rather add the Saturday than trade for another day.

• Wellness isn't quite worth it. A common theme at my first practice was the anxiety veterinarians felt when they were greeted each morning with a full schedule of patients with problems. We tried hard to keep some balance and ensure that no single veterinarian shouldered all the difficult cases and that each had a share of wellness/vaccine visits to afford them some time to catch up. I was surprised to see just the opposite at my new practice.

While all of our veterinarians make sure patients are up to date on vaccinations, fecal examinations and needed blood work, those appointments represent a much lower rate of pay than seeing a patient who's been vomiting for two days. Whereas I used to hear doctors get excited about a day of easy vaccine appointments, the associates at my new hospital prefer those types of appointments to be scattered throughout the week.

• It's the doctor, not the practice. Lastly, production-based pay seems to incentivize a doctor-specific approach to scheduling. I've always considered a multidoctor practice to be one practice with several providers, not several one-doctor practices operating under the same roof. I know many clients have a provider preference, and at my first practice we honored that whenever possible, but it never exceeded about 30% of the appointment requests. In an environment where veterinarians are working as hard as possible to have a full day of appointments (again, that's how they get paid), it's easy to see why they would experience stress when a client continues to see a single practitioner rather than being funneled into a system where they're scheduled with whomever has an opening.

Additionally, once a veterinarian does have a full schedule each day, it's natural to start triaging what to do with any precious extra time. Do they see employees' pets that come along with a discount and thus bring in less revenue? Do they see animals from the Humane Society that receive a complimentary first exam and also generate less revenue? How much time should they spend answering questions about another provider's patients on a day when that provider is out of the office, theoretically representing zero revenue for that associate's time? Many dynamics come into play, well beyond concerns about how production pay impacts medical decisions.

 

How hospital location affects money and standards of care

I moved from my first rural practice to one in an affluent city in the Portland, Oregon, metro area, and I wasn't prepared for the differences in fee schedule. A large part of my previous job involved making sure clients could afford the care their pets needed. Sometimes that meant creative financing, sometimes that meant clients chose affordable care that didn't represent the clinical standard, and sometimes that meant we had to evaluate how the fee matched up with the particular situation and whether there was wiggle room. Veterinarians participated in those discussions and together we figured out how to move forward and provide care. I didn't always enjoy the process, but I was always proud that care was accessible for those who made less money and that everyone in our community could have the privilege of sharing their life with an animal.

In my new position, the fee schedule for some services was exponentially higher than I've ever seen, and adjustments to those fees are all but prohibited. Don't get me wrong. The fees are commensurate with the area-and likely with the entire Portland metro area excluding spay/neuter-only practices-but that just wasn't the world I'd been living in.

To be honest, I was a little excited about not having to negotiate with clients on a daily basis. What I wasn't prepared for was that my own involvement in the daily care process became transactional. I no longer needed to help clients determine how they would pay for services or which services they would elect to have performed. Clients came in, we provided great care for their pets, they paid their bill and they went home-all without my involvement or intervention.

I began to wonder what happened when someone couldn't afford our services. Surely not everyone in the greater Portland metro area had the budget to match up to veterinary fees in the area, did they? Weren't any callers seeking an appointment at our practice unable to afford one? Maybe, maybe not, but none were brought to my attention.

My former practice prided itself on recognizing that some clients needed a “low-cost vaccine afternoon,” that we needed to offer a “low-cost cat neuter day” once a month, that we should provide discount coupons to regional outreach associations and that we should offer some free services to the small homeless population. We felt it was our responsibility to reduce our overall profitability to ensure that everyone in the community had the chance to have a pet. That may not be conventional thinking, but I don't think it's unusual in smaller communities. None of that exists in these larger, more affluent areas, and I find myself missing it.

My own career and professional outlook developed and evolved over 26 years, and I took a lot of pride in that. I wrote articles about the need for options to be built into standards of care to increase affordability and for the need to help fight pet overpopulation and crowded shelters. I don't judge practices that don't practice this way but prefer to let someone else work there. That's their choice, and I honor that. What I didn't realize was how deeply that philosophy had become part of my value system. I've struggled to refocus my approach as I've sometimes felt that I'm doing “soulless” work because I can't provide outreach to those in need.

I guess that's part of the reason I decided to leave my new practice. I worked with an amazing team of professionals who practice with patients' best interests in mind. They provide extremely high-quality medicine and obviously have an established clientele who want and can afford it. As I mentioned, I never saw a single incident that would suggest that their standard of care was driven by anything other than the needs of patients.

Even so, now that I've worked in practices with both types of salary structure, I just don't see the upside for production pay. The answer is that whatever form of management, compensation and fee structure one chooses to use is up to each individual practice, but it's a much deeper discussion than I once thought.

Long-time dvm360 magazine contributor Kyle Palmer, CVT, is working as a practice management consultant for a number of hospitals.