PRACTICE MANAGEMENT. Steven D. Garner, DVM, DABVP
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1 PRACTICE MANAGEMENT Evaluatin f the effectiveness f VetPlan sftware implementatin in the facilitatin f prcess change and prductivity within the veterinary practice Steven D. Garner, DVM, DABVP Objective T test the effectiveness f the VetPlan TM knwledge management sftware tl fr guiding the cmmunicatin prcesses within the veterinary practice. This effrt is designed t determine the effects f the VetPlan prcess change n client cmpliance, practice prductivity and wrkflw change. Prcedure - VetPlan TM embdies a practice management prcess fr imprving the practice f veterinary medicine and elevating pet wner experiences with veterinary medicine. The VetPlan TM sftware is a tl fr implementing and managing business practices. In this regard, the VetPlan sftware facilitates a nvel apprach t the cllectin, recrding and cmmunicatin f diagnstic and treatment infrmatin within the veterinary clinic. Design VetPlan was installed in 81 veterinary practices f variable size and demgraphics and implemented with variable amunts f team training Results VetPlan implementatin resulted in immediate increases in average transactin value (21% increase) and verall practice prfitability (frm 15% t 20% grss prfit). The grss sales increased by an average f 21% ranging frm 47% t 8% within the first year. The number f visits slightly decreased within the first year f peratin (4,170 t 4,140). Vet- Plan als increased the client cmpliance with recmmended wellness items including heartwrm/flea/tick medicatins (21% increase), healthy pet labratry (28% increase) and pet fd recmmendatins (15% increase). These results are averages and d nt represent the exceptinal grwth experienced by sme hspitals wh fully embraced the cncepts embdied in VetPlan. Cnclusins VetPlan is an effective tl fr increasing client cmmunicatin resulting in increased sales, increased cmpliance and increased health care team utilizatin. VetPlan cupled with wrk-flw and scheduling changes and prper training results in maximal effect. VetPlan Prcess The VetPlan infrmatin system changes veterinary business prcesses in existing veterinary practices resulting in dramatic increases in revenue prductin. This increase in revenue results frm the fllwing changes in the veterinary business prcess: VetPlan facilitates the dctr in recrding examinatin findings and subsequent medical recmmendatins fr cmmunicatin t the client, thereby increasing client cmpliance with the dctr s recmmendatins resulting in increased revenues. VetPlan facilitates the recrding f the veterinary medical recrd and autmates the creatin f custm client infrmatin literature describing the dctr s medical prcedures, surgeries and treatments and hme care instructins t the client. VetPlan enables the hspital t effectively market the practice s standardized wellness recmmendatins (immunizatins, examinatins, diagnstic tests, preventative medicatins, dietary recmmendatins etc.) t clients thereby increasing bth revenues as well as number f subsequent visits per pet. VetPlan s creatin f these custmized client infrmatin reprts greatly facilitates client cmmunicatins by the nn-veterinarian staff and supprts a multi-tasking wrk-flw similar t what ccurs in many dental ffices thereby increasing the capacity t see clients. VetPlan facilitates the marketing f the veterinary practice thrugh clr, take-hme reprts displaying the practice s name, lg and cntact infrmatin that has a lng shelf life because f the pet s pht and custm infrmatin. VetPlan Benefits T the veterinary clinic: annual revenue and perating prfit increases fr years 1-5 fllwing purchase; resulting return n investment; nn-mnetary benefits, e.g. imprved satisfactin frm veterinarian time allcatin and staff invlvement in practice management T the VetPlan clinic s custmers: better preventive care, imprved treatment fr injuries and disease, advanced cmprehensin f pet care needs and pririties. Methds VetPlan has been installed and functining in veterinary practices ver a perid f time ranging frm 4 mnths t 30 mnths. This implementatin has invlved training and supprt which has varied frm an intensive cnsultative prcess t a single day f training. Adptin f VetPlan in these practices has als varied frm whlehearted embracement t cmplete rejectin. The initial 12 VetPlan installa- Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 1 f 6
2 tins ccurred as a result f a mre r less intensive cnsultative prcess. In this grup 2 practices rejected the implementatin all tgether and never used the prcesses r the sftware. Others used it t varying degrees and have in general received the best results frm the VetPlan prcesses. The fllwing 12 VetPlan installatins averaged three days f training with sme receiving fllw up training at a later date. One f these practices failed t use the sftware at all. The next grup f 60 practices received nly ne day f training and had minimal cnsultative relatinships prir t implementatin. Financial results have been slicited frm all practices but have nt been received frm all practices. The fllwing results represent the average f all practices whse results are knwn when nrmalized n a per dctr basis and include sme practices wh admit t nt using the sftware r prcesses at all. VetPlan training invlves three stages: Buttnlgy This is instructin n hw t use the keybard t create clients, pets and visits. HealthMap - This is the primary cmpliance tl which is used t keep track f the lifelng wellness recmmendatins f the pet. The HealthMap is a pwerful cmmunicatin tl that enables health care team members t participate in the client educatin prcess. Wrkflw - Wrkflw training invlves hw t mre efficiently schedule clients t wrk with the VetPlan prcess. This training may be accmplished n ne day r is best spread ut ver several weeks t anchr the prcesses and behaviral changes int the practice peratins. Practice Prductivity Results The fllwing results demnstrate hw VetPlan transfrms the practice prductivity ver time in key areas resulting in higher perating prfit margins: VetPlan is installed in 81 veterinary practices. The fllwing table and graphs represent a statistically significant summary f these practices business results fr the first year f VetPlan peratin, fllwed by prjected incmes apprximating the ideal practice as represented by Safari Animal Care Centers where VetPlan was develped. This chart is nrmalized t represent the prductin and financial results fr ne veterinarian wrking in an average veterinary hspital. Other subjective results are listed in the discussin sectin f this paper. PRACTICE MANAGEMENT 5 Year VetPlan Implementatin - Practice Prjectins* Per Dctr Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 SAFARI Visits Per Day Visits Per Year 4,170 4,140 5,280 6,420 8,210 10,000 12,000 New Clients per Day Average Client Transactin $74 $90 $93 $95 $98 $100 $100 Pet Fd Sales $20,206 $23,213 $34,188 $42,693 $56,033 $70,000 $84,000 Flea/Tick/Heartwrm $24,426 $29,677 $39,072 $48,792 $64,038 $80,000 $96,000 All Lab Wrk $23,778 $30,510 $43,956 $54,891 $72,043 $90,000 $108,000 Grss Incme $308,463 $373,505 $488,400 $609,900 $800,475 $1,000,000 $1,200,000 Fixed Csts $74,116 $74,701 $83,028 $85,386 $88,052 $89,000 $84,000 Variable Csts $61,693 $74,701 $97,680 $121,980 $160,095 $200,000 $240,000 Dctr Salary $61,693 $74,701 $85,470 $91,485 $100,059 $105,000 $120,000 Staff Salaries $61,693 $74,701 $109,890 $152,475 $220,131 $300,000 $360,000 Operating Prfit $49,268 $74,701 $112,332 $158,574 $232,138 $304,000 $396,000 * Year 1 Incme based n Actual Results frm VetPlan Installatins. Table 1 This table indicates that the use f VetPlan significantly increases sales and perating prfit within the veterinary practice during the first year f use. Prjected increases in sales in fllw-n years cme primarily as a result f changes in numbers f clients scheduled per dctr.: Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 2 f 6
3 PRACTICE MANAGEMENT $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- Operating Prfit Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Operating Prfit as a Percent f Sales 35% 30% 25% 20% 15% 10% 5% 0% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Graphs 1 and 2 shw the prjected perating prfit and prjected perating prfit as a percent f sales. These results anticipate increases in numbers f client transactins generated thrugh referrals. First year sales result frm increased cmmunicatins/marketing t the current veterinary clients within the practice. Ntice that the ttal number f visits decreases slightly while the per visit revenue increases frm $74 t $90. This is the by prduct f each client transactin taking mre time and resulting in mre value withut changes in the existing practice wrkflw. As client value and appreciatin increase, referrals increase, resulting in increased yearly visits. The average clinic has 0.75 new clients per dctr per day which are prjected t increase ver time as mre clients are expsed t the VetPlan value prpsitin culminating in up t 3 new clients per day. Previus studies shw that each client wns an average f 2 pets which visit the clinic an average f 2 times per year resulting in 4 visits per client per year. As client numbers increase, transactin numbers increase and VetPlan is anticipated t supprt the change in wrkflw t invlve mre health care team members leveraging the effectiveness and prductin f the veterinarian. These efficiencies are prjected t drive perating prfit frm an average f 16% t ver 32% while increasing the salary t the prducing veterinarian. Within the first year, sales increase withut changing the business prcesses ther than the use f VetPlan n existing clients. As client numbers start t rise it is prjected that Vet- Plan supprts the change frm a single file wrkflw t a multitasking wrkflw t accmmdate the increased vlume. This wrkflw requires mre staff members yet better utilizes the existing physical plant. Staff salaries are prjected t grw as a percentage f sales frm 20% t 30%. The dctr s salary as an abslute number grws frm $60K t $120K but decreases as a percentage f sales frm 20% t 10% ffsetting the increase in nn-veterinary staff. As sales increase, the percentage attributed t fixed csts reduces and drps t the bttm line. Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 3 f 6
4 Operating prfit therefre is prjected t increase in tw dimensins becming a larger percent f rising revenues. Within five years the average single veterinarian increases the perating prfit frm $46k t $315K. VetPlan generates grwth in market categries such as pet fd, flea/tick/heartwrm preventins and labratry revenues. VetPlan als changes market share within these categries thrugh standardizatin and individual brand recmmendatins resulting in the preferred VetPlan prduct reaching 80% share within the practice. Discussin VetPlan Cmmunicatin Prcess Change VetPlan facilitates dramatic changes in the business prcesses f the veterinary hspital enabling imprved client cmmunicatins, client wrkflw, and health care team empwerment resulting in a highly leveraged veterinary asset. VetPlan enables the health care team t participate alng with the veterinarian in three stages f the client transactin centered n the veterinary exam. Befre the Exam The VetPlan HealthMap TM reprt is generated and delivered t the client by the health care team member (receptinist r technician) detailing the fllwing: The client is infrmed by the staff member that this HealthMap TM represents the dctr s recmmendatins fr keeping their pet healthy and happy in an effrt t increase the quality and quantity f their pet s life. The HealthMap TM recmmendatins are graphically divided int fur quadrants representing the wellness health care f the pet as well as a majrity f the services ffered by the veterinary hspital. Typical recmmendatins are listed belw. Examinatins and Immunizatins Exam frequency increased t tw times per year Immunizatins custmized by risk factrs and age f pet Preventative Diagnstic Tests Windws int the bdy determining things that cannt be determined by physical exam alne. Bld tests, urine tests, EKG, Glaucma Screening Based n breed and age risk factrs Preventative Therapeutics Standardized heartwrm, flea, tick and wrming recmmendatins Dental disease recmmendatins Quality and Quantity f Life Standardized Diet recmmendatins Spay/Neuter recmmendatins Behavir Issues Planned care r Insurance Issues These recmmendatins are designed t greatly increase the ability f the health care team t participate in cnsultative marketing with the veterinary client resulting in higher awareness and acceptance f the dctr s recmmendatins generating higher per visit sales while freeing valuable dctr time. During the Exam The VetPlan Exam Reprt details and explains the veterinarian s findings in client friendly scripts. The VetPlan exam is perfrmed by the dctr verbalizing his/her findings while the health care team member recrds the findings n the VetPlan Exam Frm. The prcess change invlves the health care team member using the VetPlan sftware t recrd the dctr s findings freeing the dctr frm writing in the medical recrd. The wrk-flw then invlves printing a cpy f the reprt fr the client. When the staff member enters the examinatin rm with the reprt, the dctr then exits allwing the health care team member t g thrugh the exam and dctr s recmmendatins with the client. The dctr can then enter anther examinatin rm effectively duplicating the effectiveness f the dctr. The Exam Reprt is easy t create, requires minimal typing, and generates value t the client as well as the clinic. Lgic within the VetPlan Sftware links the dctr s exam findings t medical recmmendatins, such as diet changes, diagnstic tests, dental cleanings and medicatins that may be indicated based n these findings. The resultant Exam Reprt cntains these recmmendatins enabling the health care team member t cnsult with the client n the dctr s findings, resulting in increased exam value and increased fllw-n sales. After the Exam The VetPlan Release Reprts recrd, detail and explain in client friendly language the results f diagnstic prcedures and tests, hspitalizatin and medical care. These reprts are rapidly created using pre-designed lgic that links disease presentatins r labratry results t exam findings, and therapeutic ptins. Surgery reprts, hme care instructins, labratry interpretatins are used t cmmunicate the value f the veterinary visit t the client. The creatin f these reprts is easily perfrmed with minimal typing and results in the creatin f the veterinary medical recrd at the same time. These reprts can be delivered by any health care team member at any time freeing the veterinarian t see mre clients, perfrm mre surgeries r have a better quality f practice life. PRACTICE MANAGEMENT Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 4 f 6
5 PRACTICE MANAGEMENT Veterinary Practice Capacity Veterinary practice grss revenues are determined by tw factrs, the number f pets served per dctr per day and the revenue generated per pet visit. The capacity t schedule clients determines the individual dctr prductivity mre than any ther single factr affecting the clinic. The revenue per visit is determined by the capacity f the veterinarian and health care team t cmmunicate the health care recmmendatins t the client. VetPlan dramatically affects bth factrs. Typical Dctr Visit - The number f pet visits per dctr per day is the primary rate limiting factr t dctr prductivity because the dctr perfrms mst f the actins invlved in serving a client. The average practice schedules abut 14 visits per dctr per day. The current scheduling prcess is based n scheduling the dctr in a single file manner averaging 30 minutes per pet. Little r nthing is cmmunicated t the client prir t the dctr exam. The dctr checks the medical recrds and determines the immunizatin and rutine wellness care requirements f the pet. The dctr perfrms mst f the exam rm activities with little assistance frm the health care team members. The dctr gives qutes (usually ff the cuff), assigns charges t the visit and writes in the medical recrd befre ging t the next visit. Clients leave with nly verbal infrmatin; verbal exam findings, verbal qutes and verbal instructins. The client is usually respnsible fr scheduling subsequent visits t fllw up n the dctr s recmmendatins r remembering they are due fr preventative medicatins befre they leave the hspital. Discussins abut diet, preventative diagnstics and many ther care issues are dependent n the dctr s time allcated t each visit. Increased Visit Capacity - VetPlan increases capacity t schedule visits and increases capacity t build value fr the visit. The VetPlan Prcess and reprts enable the practice t create value in the eyes f the clients resulting in referrals f new clients that drive the need t increase the capacity t serve clients. VetPlan enables the receptinist t enrll the client in wellness recmmendatins prir t the exam using the wellness HealthMap TM thrugh an educatin prcess. These discussins include all quadrants and all recmmendatins f the HealthMap TM, every visit every time: Preventative Recmmendatins fr Heartwrm, flea and tick preventative medicatins. Diagnstic Recmmendatins fr bld tests, urine tests and ther breed related r risk factr related tests. Diet recmmendatins Dental Cleanings Specific Dctr Recmmendatins fr tday s visit. With VetPlan, the dctr uses the health care team t recrd the examinatin findings saving valuable veterinary face time. The health care team member uses the VetPlan reprts t educate and market t the client while the veterinarian is in anther exam rm. This educatin results in acceptance f mre recmmendatins and scheduling f mre fllw-n visits. With VetPlan the veterinarian can simultaneusly schedule three clients per 30 minute perid effectively tripling the dctr s prductivity. VetPlan creates written reprts, written recmmendatins, written qutes and written instructins that enable the health care team t participate in the client educatin prcess while increasing the perceived value f the visits. VetPlan Facilitated Practice Grwth The typical mature veterinary practice is grwing in revenues at abut 6% per year while the industry as a whle is grwing at the rate f 11%. This lw grwth rate typifies the steady state created in mst practices by the limited capacity t serve clients. Net numbers f client visits are als falling in mst practices fr the same reasn. VetPlan has the ptential t dramatically change these statistics. The visit transactin value will increase by an average f 21% in the VetPlan enabled practice driving the visit value frm $75.00 t ver $ Mst veterinarians see abut 4,000 visits per year at $75.00 per visit resulting in abut $300,000 in revenue prductin. With VetPlan the visit value increases t $90.00 generating $360,000 in revenue frm the 4,000 visits. The infrmatin packed VetPlan reprts have been shwn t create exceptinal client value that typically results in referrals and practice grwth. The typical VetPlan enabled practice grws by ne additinal new client per dctr per day frm these referrals. One new client wns an average f 2 pets, which will visit the clinic an average f 2 times per year resulting in 1,200 additinal visits per year. These 1,200 visits will result in a yearly increase in per dctr sales f ver $120,000 having the prjected cumulative effect f increasing dctr prductin frm $300,000 t $1,000,000 in 5 years. Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 5 f 6
6 The prcess change facilitated by VetPlan is represented by the reprts (client handuts) that enable mre team members t participate in the client educatin. This change facilitates a multi-tasking wrkflw enabling the scheduling f multiple clients simultaneusly per dctr accmmdating the grwth in client numbers. Implementatin Barriers VetPlan represents a prcess change that significantly affects the prductivity f the veterinary practice; nevertheless, prcess change is the mst difficult change t implement. The fllwing are subjective findings with regard t VetPlan implementatin. Successful veterinary practices that have been established fr lnger perids f time have mre inertia and are therefre mre difficult t implement permanent changes in prcess. Veterinary practices with mre dctrs and health care team members are mre resistant t standardized prcess change than single dctr facilities. VetPlan implementatin training is best cmpleted in three stages spanning several weeks t mnths. Standardizatin f wellness recmmendatins amng all dctrs in the practice is a barrier t implementatin. Wireless netwrks are inherently unstable and while they are nt essential t VetPlan implementatin, they can be a significant barrier t cnsistent use. VetPlan is mdern sftware requiring cnsiderable cmputer hardware resurces and this investment can be a significant barrier t the implementatin f the business prcesses represented by VetPlan. Optimal VetPlan use requires the utilizatin f the health care team and a certain level f leadership skills, team trust and mentring is necessary t develp an ptimal use envirnment. Summary VetPlan is a sftware system that manages the knwledge within the veterinary hspital. This system effectively enables this knwledge (nrmally cnfined t the n duty dctr) t be distributed t multiple health care team members thrugh the VetPlan reprts (client handuts). Because the dctr creates the knwledge abut the case at hand and because there are certain standardized wellness recmmendatins authrized by the dctr within VetPlan; VetPlan can be used by the health care team t duplicate the effectiveness f the veterinarian. Once the examinatin is cmpleted a printed VetPlan reprt enables a technician t review the findings and recmmendatins with the client. This prcess increases cmpliance with the dctr s medical recmmendatins while enabling the dctr t see mre clients r perfrm ther valuable tasks fr the practice. In the care f sick pets, VetPlan creates detailed instructins that increase the value f the care received and create a cnsistent cmmunicatin t the client fr increased cmpliance with hme care instructins. This prcess change and the subsequent infrmatin cmmunicated t the client, results in a much higher verall impressin f the value f the visit resulting in increased visitatin statistic as well as referral f additinal clients t the practice. The referrals drive practice grwth which is accmmdated by the efficiencies f the multi-tasking wrkflw enabled by VetPlan team empwerment. VetPlan increases the efficiencies f the existing physical plant, health care team and dctrs resulting in grwth in peratinal prfit frm 15% t a prjected value f 32% ver five years. Immediate results are achieved frm increased client cmmunicatins and marketing resulting in a 21% increase in grss sales within the first year. VetPlan represents a prcess change which faces certain barriers t implementatin including behaviral change, cst f implementatin and training that are nt insignificant and which have caused sme clinics t abandn the effrt. Nevertheless, VetPlan ffers substantial gains in practice prductivity that cannt easily be achieved in any ther way in the veterinary prfessin. The success f a veterinary practice depends n gd medicine, quality client service, and sund business practices. Rarely des ne instrument s psitively impact all three. But such is the case with the prcesses invked by the Vet- Plan knwledge management system. This duplicatin f knwledge has the effect f changing the business and cmmunicatin prcesses in the veterinary hspital. Nw, valuable cmmunicatins can, and will, ccur befre the veterinary examinatin between the health care team and the client increasing the client s understanding and cmpliance with the dctr s healthy pet recmmendatins. Center fr Applied Veterinary Practice Management Nvember 1, 2004 Page 6 f 6
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