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The Root of All Evil

We talked about Cancer; we talked about Death. Now it’s time to discuss the one last topic no one wants to talk about: Money.

Money, money, money! It’s a necessary evil that worms its way into almost every decision we make. EVERYONE, regardless of wealth or status, cares about the cost of pet care. When someone bursts into my office crying, “I don’t care what it costs!” I know they have no intention of paying.

No one seems to budget for their pet’s health care, particularly not for unexpected accidents. Some of us hedge our bets with pet health insurance. The rest of us dig in to savings we’d intended for more enjoyable purposes. When we have no savings, we whip out the plastic. When we have no credit available, we’re in a terrible jam.

Why can’t veterinarians offer delayed billing? Because people don’t pay us. It really is that simple. I wish it were otherwise, but after 28 years in business I can assure you, there is no better way to ruin your relationship with someone than to allow them to owe you money.

Here is truth: The first rule of veterinary practice is “Make A Profit.” My employees are dedicated, caring professionals… and the day I stop paying them is the day they stop coming to work. PG&E will not light my hospital, nor will my suppliers continue to send me supplies if I fail to pay my bills when due. Without those employees and lights and medications I am incapable of helping your pets, regardless of my compassion or skill as a veterinarian.

But why is everything so expensive? Despite government statistics claiming an annual inflation rate of 2.1% in 2012, my drug suppliers typically increase their prices 3 to 5% every year. Energy and insurance and regulatory fees go up and up, while average veterinary practice revenues have declined about 11.5% since 2009.

Consider the new veterinarian, just out of school and beginning to practice: These fresh-faced young doctors carry an AVERAGE debt of roughly $150,000. Student loan interest rates will soon double to 6.8%, so this debt generates a payment of $1,150 a month for 20 years – and the parents co-signed! The new veterinarian will earn, after eight years in college, a salary of about $45,000 per year. Many graduates seek additional training in internships and residencies because the alternative is unemployment. The cost of pet care may seem high, but the money is not going into the pockets of veterinarians, particularly not the young ones. Remember these facts the next time your child tells you she wants to become a veterinarian when she grows up.

My $50 office visit fee has not increased since 2005, but some practices ARE making serious money. The large, multi-specialist, 24-hour hospitals are earning vastly higher returns than small locally owned veterinary hospitals. One reason for this was made clear to me during a recent consultation with a management specialist. “Don’t give your clients choices,” the expert told me. “Recommend what you feel is the best practice and don’t offer alternatives.” I was somewhat taken aback by this approach. I mean, whose money are we talking about, anyway? Don’t people have a right to choose between alternatives? Apparently not.

Then it dawned on me: A “best practices” approach to every patient means that every animal has a blood panel performed before routine spay or neuter surgery, because that’s the “best practice” to maximize safety. And I agree, except for a nagging detail: Far fewer than one in a hundred routine blood panels show anything abnormal. If the panel costs $100 (cheap), then the cost of finding that one patient with an abnormality is at least $10,000. Whose money are we spending, anyway? Isn’t it up to the pet owner to decide what level of risk they are willing to accept? Too often, “best practices” are simply a means of keeping the lab machines exercised, with a profit made with every blood panel performed.

This is just one example, but illustrates how many large, corporate-run veterinary practices increase per-patient net profits. The pet owner isn’t offered a choice. If you’re having surgery, you also have the required blood panel and all the other bells and whistles that go with it. Other considerations, such as the patient cost-to-benefit calculation, are ignored in deference to “best practices.” It’s easy to see how so many emergency visits to the big corporate veterinary hospital end up costing $3,500.

Your small, local veterinary hospital operates under sharply different rules. We understand that you can easily go elsewhere for care, and we want you to come back. Patient recommendations are based upon patient needs and you, the pet owner - not some corporate bean counter - decides what the “best practice” will be for your pet.

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