'Would you like to supersize that?' Dr. Bailey plods slowly into the next exam room.


Bob, an 8-year-old West Highland Terrier is waiting. Bob used to be 'Bobby' but the years have aged him. Bob's owners, John and Sarah, have been somewhat neglectful of Bob.

Bob, an 8-year-old West Highland Terrier is waiting. Bob used to be 'Bobby' but the years have aged him. Bob's owners, John and Sarah, have been somewhat neglectful of Bob.

When Jennifer, the exam room tech, took the history it became apparentthat they were feeling a bit remorseful as to Bob's overlooked condition.Bob hadn't been to the vet in two years. This was primarily because Johnand Sarah had been busy moving to a new house. Nonetheless, they wantedto get Bob up-to-date and are willing to do whatever is now necessary tomake him healthy.

Veterinary stupor

Dr. B now spied the "shots" on the table and the negative resultsof the heartworm and fecal tests already marked on the chart and inwardlysighed with relief.

"This will be easier than the horrible set of ears that I just muddledthrough," he thought to himself.

After a cursory exam he gave the vaccinations and pronounced Bob to behealthy.

Sarah looked puzzled and apprehensively asked Dr. B if he would lookat Bob's ears.

"Oh, yeah!" he said.

Dr. B bit his lip knowing that he had overlooked this. As he lookedbriefly at the ears, Sarah asked him if he had noticed the smell comingfrom Bob's mouth and added that he seemed to have been itching and has scabsall along his tail and legs.

As if jolted from some veterinary stupor, Dr. B. now starts a more thoroughexamination, which results in a re-appraisal of Bob's overall health. Dr.B now more confidently informs John and Sarah that Bob has fleas, seriousdental disease, ear mites and what Dr. B called a "grass allergy."

Sheepish at his oversight, Dr. B uses a dental scaler and removes theworst of the tartar from the upper arcade of Bob's teeth. In spite of thefact that Dr. B is sitting on $5,000 worth of flea products in his backroom, he combs the fleas out and asks if they have any flea shampoo at home.He then asks Jennifer to get up some prednisolone for Bob. Dr. B forgetsabout the earmites.

Distressed client

Sarah is distressed at the news of these problems. She asks Dr. B ifvitamins would also help. Finally John gets his two cents in and noticesthe toenails are really long. He asks if they need to be trimmed. Jenniferand Dr. B quietly respond to these requests, discharge the patient to thefront desk and move on to other things.

Dr. B is convinced that he had done a good job with Bob. He smiled andwent to his office and stared at a large pile of unpaid bills lying on hisdesk.

"They can wait," he thought to himself.

He knew he had a few free hours now in the afternoon before his finalclient. He could use that time check his e-mail and his bids on eBay. Unfortunatelyfor Dr. B, John and Sarah may take Bob elsewhere.

Four points jump right out at you:

* This veterinarian's examination is unsatisfactory from bothsides of the table.

* John and Sarah are dream clients.

* This veterinarian is unprepared to meet their needs.

* Chances are this veterinarian and his staff are poorly compensated.

This scenario or some variation of it may be more common in your hospitalthan you may like to admit.

Dr. B's practice could use a lesson in economics from McDonald's.

Break even

Please don't quit reading now simply because the subject matter at handis usually boring... read on.

You have been told by certain advisors and other kind- hearted soulsthat somewhere out there during the day or month you are going to "breakeven" and everything else will be profit. Some advisors will crunchyour practice numbers into a formula to tell you "on this day of themonth or that hour of the day" you broke even.

This ostensibly is a predictor of future profitability at a given pointin the month or a given point in a workday. A common hour of the day is3 p.m. every afternoon, etc. It is good to remember that even Kenny Rogers'Gambler "broke even."

Defining break-even

What is the break-even point? It is that point where your productivityresults in a zero profit. Less production-you lose money and can't paybills and payroll. More production-you become profitable and can pay yourbills, make payroll and pay yourself.

What is valuable to know is there is indeed a break-even point somewhereout there in your day or month.

The important part is knowing that if you do not produce (in our caseveterinary medical income) beyond this point you are losing money-a.k.a."you are going broke". What really matters is getting above andbeyond this break-even point.

Where is break-even?

Some will say, you must know where that break-even point is in orderto improve productivity.

In a world where you can easily change the economic behavior patternsof poorly compensated veterinarians, I would agree. However, from a practicalpoint of view, a veterinarian should intuitively know that he/she is underachievingfinancially simply by examining the turnover of his or her staff and lookingat last year's income statement. If they don't know this intuitively, thenthey should spend less time on 'Yahoo' and more time with their accountant.

Marginal revenue product

McDonald's and every other large business in the private sector knowsthis fact in spades: Every unit of business sold beyond the previous unitis more profitable than the previous unit.*

For the most part, the more you sell to an individual or to an accountat a given point, the more net revenue will be generated by the last itemor unit sold. Car salesmen are told to sell more options on a car and workersin a fast food restaurant are told to ask customers to "supersize"their orders for this very reason. This is because there is more profitin the last items that are being sold. Why? Because in most cases theseadditional sales are beyond the break even point resulting in maximizationof profits. Economists call this marginal revenue product.

Bringing it home

What has this got to do with veterinarians?

Dr. B has missed one golden opportunity after another to reduce the sizeof his pile of bills. The reality is that Dr. B and every other veterinarianin the world sees clients one at a time. Each client creates an opportunityfor moving beyond the break-even point. This is so important when you lookat overall productivity and its economic returns to you and your staff.It is crucial to serve each and every client to the capacity requested.

Now let us look at Bob the Westie. The procedure that generated the mostnet revenue was the last one done; it was the lowly toenail trim. Now ifDr. B had been on his toes he might have spent the next hour doing thosethings that would completely satisfy the client and fulfill Bob's needs.This would have still left him an hour to do his computer thing.

In addition, any one or a combination of these procedures would haveeither moved Dr. B toward that nebulous break-even point or beyond it.

For instance, it may have been a good idea to do a variety of tests andfollow-up procedures including:


* thyroid and a full biochemical profile.

* ear swab and culture

* skin scraping and/or cytology

* dental scaling and ear flush

All Westies are potential candidates for skin testing. Additionally,Dr. B missed out on the sale of professional products. Like it or not anduntil further notice, a great deal of profits in veterinary medicine arederived from product sales. In spite of the fact that Sarah and John wantonly the best of Bob, Dr. B suggests a home flea remedy. It cannot alwaysbe determined whether a veterinarian wants to save the client a little moneyor he or she just doesn't want to spend the time to properly inform theclient. Either way if you don't believe that your products are superiorto what is readily available in retail stores, you should not carry themat all.

(* There are exceptions, which are beyond the scope of this article.)

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