The Mega Study showed clearly that in supply and demand, through lack of knowledge, all decisions are made on cost. The "elasticity of demand" concept used in the study was "as price goes up, demand goes down". This is a known misnomer in the healthcare of family members, including pets, but what do you expect from the accountants who did the survey tabulation? Nevertheless, they also reported that in an educated market quality counts, and elasticity varies substantially with client veterinary IQ, wishing a long-term provider relationship.

More Significant than Price

 Kind and gentle doctor.

 Doctor respectful and informative.

 Reputation for high-quality care.

 Past experience with practice.

 Range of services.

 Location.

 Convenient hours.

 Recommendation of friends/neighbor.

 Price was number nine on the list.

The International Conference on Work Teams conducts an annual seminar on "Why Teams Fail". It is interesting to note that money is the lesser of the evils, just like the Mega Study showed. The reasons that plague veterinary medicine are the same ones being reported in industry. The numbers below in parentheses reflects the percentage of managers having said their teams failed for that specific reason:

 Goals unclear (fifty-five percent).

 Changing objectives (fifty-five percent).

 Lack of accountability (fifty-one percent).

 Lack of management support (forty-nine percent).

 Lack of role clarity (forty-seven percent).

 Ineffective leadership (forty-five percent).

 Low priority of team (forty percent).

 No team-based pay (thirty percent).

The Mega Study's gap between supply and demand was based ONLY on the premise of increased demand to increase in prices. Veterinary pet insurance reimbursement tables and the AAHA Fee Guide can do the same today, if we start to use them as yardsticks, instead of competing with each other. Increased demand for companion animal veterinarians will be thirty-two percent and twenty-four percent FTE by 2015. They have forecasted that professional FTE demand will exceed supply about 2015, but again that was with the veterinary linear thinking paradigms that have already gotten us into this dangerous position. The entire supply and demand model of the Mega Study falls apart if a team-based veterinary healthcare delivery model was used and client-centered patient advocacy replaced the doctor-centered linear inefficiencies. Production per doctor would increase, due to leveraging the doctor's time, and, therefore, the income for doctor and staff salaries would increase. The Mega Study's model is the example of old habits defining failure, rather than changing the old habits for success.

Consumer prices: The Mega Study reported that veterinary medicine relative prices were above the consumer price index until 1992, forming the opinions of the existing tenured owners. But now they are below, allowing a rethink of price-setting structures.

 1990s: There was a seven-point-two percent increase in veterinary spending in a two-point-nine percent consumer spending period.

 The next fifteen years: There was a five-point-one percent increase in veterinary spending, with two percent consumer spending.

You can't tell how fast a jackrabbit will run by the length of its ears. You must measure the right things, at the right time, for the right reason(s).

For companion animal practices, seventy-four percent of the clients would use the same veterinarian if they raised prices by ten percent, and fifty-eight percent if by twenty percent. Seventy percent of the $100,000 households would continue with their veterinarian with a twenty percent fee increase. The study also reported that sixty-eight percent of pet owners and seventy-three percent of horse owners rated veterinary fees as very low compared to the value of animal. Also, only ten percent of the pet owners said they switched veterinarians to find lower fees, but we know in most practices, that about twenty percent are "D" clients.

 Horse owners: Insensitivity to price was far stronger than in companion animals. Eighty-nine percent of horse owners would stay with a ten percent fee increase, and seventy-seven percent would stay with their veterinarian with a twenty percent fee increase.

With a seventy-five percent chance of successful recovery, pet owners would pay $688 on average. Horse owners would pay $1827 and would pay $3314 to keep a favorite horse from dying, but $2010 for a least favorite horse. Pet owners would pay $1042 to keep their favorite dog from dying and $657 to keep their favorite cat from dying.

You can't tell a horse's gait till she's gentled and rode.

The Mega Study used focus groups, which have a wide margin of confidence, as well as a bias, based on the interviewer/facilitator's perspective. One set of focus groups stated that veterinary students need more communication in school or before acceptance, and that the students need to know the diversity of professional routes.

Women were seventy percent-plus of the students and thirty-six percent-plus of practicing veterinarians in the study group. Reportedly, women were working shorter weeks and only three to four hours shorter on average. There were fewer women owners, so the numbers must be adjusted before they are used as comparisons for negative thinking.

The study reported that fifty-eight percent of all households have pets, and eighty percent for households with children had pets. There is very little correlation between people's income and the degree of attachment to a pet. Income potentials are far greater, when the human-animal bond is a recognized element of healthcare decisions.

 Ninety-three percent would be upset if anything happened to their pet.

 Eighty-five percent believe pets are becoming more like family members.

 Pet owners would pay $92 per month to keep a pet healthy, and $165 per month for horse owners.

The study talked of excess capacity but it was actually linear thinking that provided the limitations that showed the average companion animal practice could:

 Increase caseload twenty percent before extending hours.

 Increase caseload twenty-two percent before hiring a new technician.

 Increase caseload forty-two percent before hiring another doctor.

 Positive relationship between open hours and revenues per doctor.

The study showed the average large animal practice could:

 Increase caseload twenty percent before extending hours.

 Increase caseload thirty-one percent before hiring a new technician.

 Increase caseload forty-five percent before hiring another doctor.

Anyone can give you a "low bid" on a "due out" product. When in doubt, let your horse do the thinking.

Key Focus Points for the Future

Regardless of the practice model, a business team will become essential for maximizing profit potential and advising the practice leaders. This team will include a tax accountant (CPA), corporate attorney (JD), banker/certified financial planner (CFP), and a veterinary-specific consultant (CVPM, MBA, MHA, or Diplomate, American College of Healthcare Executives). As you implement Chapter Six of this text, this team will most likely be essential in tracking the practice's improvement progress.

In multiple-doctor practices, a practice management model, without depending on veterinarians, will become essential for increasing operational effectiveness. The text Veterinary Management in Transition: Preparing for the 21^st Century provides the theory, tools, and eleven self-assessment surveys to help a practice evolve this philosophy. The chief of professional services may serve as the medical director, a traditional AAHA position, but that will become a position centered on patient advocacy, standards of care, quality healthcare delivery, and continuity of veterinary diagnostics and care.

Any business/practice needs a monthly validated balance sheet and income statement, the P&L report. Numbers must be accurate, not percentage estimates, to allow effective management decisions. Income centers must be aligned with corresponding expense centers to determine net income potentials of programs and services. The VCI® Signature Series Monograph, Profit Center Management has a full spreadsheet on CD that is automatically driven.

Cash management requires the practice overhead, including P&L expenses, less doctor monies, less occupancy expense, and less ROI, to stay below fifty percent of gross income every month and below forty-seven percent of gross income each quarter. The VCI® Signature Series Monograph Fundamentals of Money Management provides many internal control programs, plus an expanded AAHA-compatible chart of accounts on CD.

A capital expense budget, those monies programmed for technology upgrades, new equipment, and facility improvements, is required, with both mid-year and end-of-year procurement made from prioritized equipment lists, which have break-even analysis of the program/service upgrade caused by the purchase. The appendices supporting Chapter 4, "Program-based Budgeting" of the text Building The Successful Veterinary Practice: Programs & Procedures provides examples of how these balance sheet fiscal obligations can be added to the budget.

Practice growth must be at least the Consumer Price Index (CPI), plus six percent each year, to maintain viability and investment potentials. In lieu of blind fee increases, the twenty-six appendices of the text Promoting the Human-Animal Bond in Veterinary Practice provide twenty-five separate programs that staff can implement to create additional practice traffic and income. This increases the client bond with the practice and establishes a better defined image or market niche within the community. The text Veterinary Healthcare Services: Options in Delivery provides a wide-spectrum look at many of the variations and alternatives available to better tailor programs to your community and practice format.

Staff must have a participative role in the practice evolution. The text Building The Successful Veterinary Practice: Programs & Procedures, Chapter 6, introduces proactive quarterly performance planning, instead of retrospective annual performance appraisals. The VCI® Signature Series Monograph Staff Performance Planning and Goal Setting provides supplemental mentoring techniques, plus the various performance planning forms on CD for easy tailoring by the practice. The text Building The Successful Veterinary Practice: Innovation & Creativity is designed around adult learning and creating a self-directed team environment.

Personal compensation must have a savings plan outside the practice setting. For example, ten percent of take-home monies each pay period. Investment outside the practice setting is required for economic security and retirement protection. The VCI® Signature Series Monograph Compensation Strategies for a Client-Centered Quality Healthcare Delivery Team provides a foundation for these types of practice benefits. Small format practices must learn to grow their net income, rather than just increase gross or increase their average client transaction (ACT). The VCI® Signature Series Monograph Standards of Patient Care in the Bond-centered Veterinary Practice provides the logic and program implementation techniques to significantly grow net income without having to increase fees, although non-quotable fees may need to be increased, which adds additional income to the practice liquidity. There are key portions of these concepts in Chapter Four of this text.

Healthcare delivery must become team-based, leveraging the doctor's time, and increasing individual provider productivity. The VCI® Signature Series Monograph Zoned Systems & Schedules for Multi-Doctor Practices provides the overview, as well as the implementation of, an integrated training plan. There are key portions of these concepts in Chapter Five of this text.

With minimal effort, veterinary professionals and veterinary healthcare delivery systems can have a much larger role in community leadership. The VCI® Signature Series Monograph Leadership Action Planner provides the step-by-step methodology to assess core values and personal life vision/direction for the veterinarian, as well as the practice. These tools are supplied on CD and can be used for community civic activities, as well as the practice setting.

As I read the above "needs" and the references I have offered, I know I am doing what I said I would do in the introduction, but it still seems like too much crowing. This reminds me of some of the "assessments" of those hands, who worked the chutes of the rodeo circuit in Montana during the early days, when my bones were not as fragile. I wanted this text to integrate all the resources I know are out there, to put them into perspective. But sometimes, when the references come so fast and furious, it sounds like:

Some folks have their good points but they keep jabbin' you with 'em, like they was spurs and the horse ain't movin' down the trail right.
or maybe
It's a self-made man that usually worships his creator.

Maybe so, and pride does proceed the fall in many situations. Fact is, we have tried to bring new thoughts and techniques to this profession from business and other healthcare professions. We publish our cutting-edge leadership and management material, so it is in public domain for consultants and practice owners alike. Most often, we see our past suggested changes come into acceptance about ten years after we introduce them. The profession is not moving down the trail to success like we would expect. The old adage, "Insanity is defined as doing the same thing over and over and expecting different results on successive attempts", sure does live in this profession. As profession leaders, our fear of failure is so high that new ideas have a hard time taking root in this rock-headed group of trend setters. It is the trainers (associations and consultants) and riders (practice owners), as a team together, who need to change what has been our professional paradigm.

The rider of a rough string may be short on brains, but not guts.
or maybe
It's a sure sign of bad luck to bet on a lame horse