I think we as a profession need to give back to the community and help some of those clients and pets who might need our assistance. But I also believe there must be some limits put on how charitable we are.
Could your hospital be suffering from an overabundance of charity? Consider the case of a veterinary practice that I once consulted with. The hospital had just moved into a beautifully renovated new building. The owner, a solo veterinarian with two, full-time associate doctors was a great guy, an awesome veterinarian and, one might say, charitable to a fault. During my consultation, the practice was presented with a litter of 11 kittens that the owner did not want anymore. Add that to about six other cats that were also there for various reasons and four dogs, all of whom were being provided charity services. Now, I have nothing against a veterinary practice being charitable. In fact, I think we as a profession need to give back to the community and help some of those clients and pets who might need our assistance. But I also think there must be some limits put on how charitable we are. What I did not tell you about this practice was that they could not afford nice new chairs for their new waiting room, the owner had to dip into his own retirement account to pay the mortgage, and employees weren’t getting a raise or incentive bonus because the practice could not afford to make those payments. When does our kindness of heart affect our business to the point of its determent or demise?
Budget Your Charity Services
I would suggest that every veterinary practice establish a budget and decide exactly how charitable they wish to be. Maybe you would like to set aside 1-3% of your gross every year for charitable services. When you provide these services, enter the services into the computer as you normally would, charge normal fees, and bill out the charity organization. This will allow you to keep track of these services and how much you are doing while staying within your budget. Next, decide which specific organizations in your area you will work with. There might be a very good non-profit spay and neuter program in your area or a rehab center that you would like to support. Even so, you need to decide how much time and money you are going to expend working with these organizations. It is wonderful to work with these charitable groups but remember that you are a for-profit business and have a responsibility to your partners, employees, and ultimately, the patients in your care.
For your associate veterinarians, I have an awesome idea. We have been using this concept for many years and it really works well. Set up client accounts in the computer for each of your associate veterinarians. They should be labeled something like “Dr. Jane Smith – Charity Account.” You then need to decide how much you wish to fund the account with. I might suggest $1,000 to $3,000 a year. Tell your associate that you have set this account up for them and they can use it however they wish. If they have a case that comes in and the client cannot afford to pay for services, the associate can decide to use his or her charity account to help the client. Maybe the bill is anticipated to be $1,500 and the client can only afford $1,000. Well, the associate can take the other $500 out of their charity account and pay off the bill. With a charity account, associate doctors don’t have to ask anyone’s permission or talk to the owner or manager first. Each doctor has the freedom to use the funds in their charity account to provide charitable services. However, when the charity account is empty, so is their ability to offer charity services in the practice—unless they wish to pay for it with their own money. The beauty of this is that it allows associates to have some control over the offering of charity services, but it also puts a cap on how much. The message is that, although we wish to be charitable, we also need to control that if we are going to continue to be a viable business.
I recall one student who attended our VMC School of Veterinary Practice Management and was the manager of a veterinary practice owned by her father. When we discussed the charity account idea during school, this manager was very excited about the concept. She related how her dad was always “giving things away” and this was a big problem for the practice. So, when the manager returned to her practice, she talked to her father and they decided to set up a charity account for him, which they funded with $30,000. Amazingly, the account was depleted in only three months! The owner couldn’t believe he had given that much away in such a short time, but his daughter pulled out all the fee exception reports charged to his account. The practice owner verified each one and finally admitted that he had indeed given away $30,000. Over the next twelve months, the practice almost doubled their gross income, just from the knowledge of how much he was giving away!
Who Owns the Biggest Buildings in Your City?
There are ways you can help your clients and assist them other than just giving your services away. Think about this: who owns the biggest buildings in your city? Most likely, they are owned by the banks in your area. And how did those buildings get built? With the money they made by loaning money to other people. So loaning money is a profitable business. Yet, for some reason, many veterinarians and veterinary hospitals are very resistant to loaning money and creating accounts receivable.
There is nothing wrong with loaning money. The problem comes when you loan money and you don’t get repaid. Instead of saying no to all accounts receivable, it may be a better business strategy to develop an effective credit policy that allows “good clients” (clients who have been coming to you for years) to charge for services when necessary. Maybe it would be a good idea to take a little risk on a client whose pet needs an orthopedic surgery but can’t afford it right now. Of course, you also need to be smart about this and run a credit check or in some way determine if the client is creditworthy or not. Many veterinary practices have loosened their credit policies and allow clients to pay their bills over several months. As a result, these practices were able to render services that they might otherwise not have been able to and even make money on their money.
If you don’t wish to become a “bank,” then use some of the services we have available to us to help clients out. Like credit services that allow clients to apply for a line of credit and immediately find out if they qualify or not are excellent. If clients do not get approval, at least you will know that they are not creditworthy. Another option that is often under-utilized would be veterinary pet insurance. Pet Insurance has been around for a long time and there are some excellent companies out there. If a client has pet insurance, they are more likely to do whatever you suggest since price is no longer an issue and, hopefully, optimum services can be provided. Why then have we been so reluctant to promote pet insurance to our clients? There was a study done in Europe that found, if clients have pet insurance, they will spend 58% more than a client who does not have pet insurance. Maybe it’s past time to give pet insurance another look.
Don’t Reduce Fees to the Lowest Common Denominator
I also object to reducing our fee schedule to the lowest common denominator. There are some practices that get some occasional push back from clients about their fees. When you question these veterinarians, they will tell you the horror story about how a client yelled and made such a scene in the practice, it was terrible! The next question I ask these veterinarians is how many other clients did not complain and, in fact, may have thanked the practice for its quality of care and service. These are the clients we wish to serve. We will never make everyone happy, so don’t even try, but please don’t reduce your fee schedule because one or two people complained. In fact, I might be more concerned if you don’t hear a complaint than if you do. Charge fair fees for what you do, charge for everything you do and remember price is only an issue in the absence of value. Enhance the value of your services in your clients’ eyes, but don’t reduce your fees.
There are many ways we can help our clients without just giving our services away. I acknowledge there are circumstances when we need to be charitable and give back to our clients and communities– we just can’t do that to the determent of our practices, employees and future retirement.