Value Added Healthcare Services
Promoting the Human-animal Bond in Veterinary Practice
Thomas E. Catanzaro, DVM, MHA, FACHE, Diplomate American College of Healthcare Executives

The uninformed consumer will compare using prices; it is the only thing
they know which is comparable. The client who receives a value-added
service learns more than price for comparisons
. Dr. T. E. Catanzaro

For more than 30 years, veterinary medicine has thrived in a seller's market, a safe profession in which a prestige product was offered to a relatively unsophisticated consumer. The traditional veterinary practices worked hard to keep clients from seeing themselves as customers and from seeing their patient care as a competitive-based service. The underlying reason rested in the practitioner's, and the professions, self-perception. Most veterinarians view their work as a field of practice -- a professional occupation rather than a small business in a specialized industry.

Our profession has changed. These changes in consumer selection and competition are a function of the current generation's needs. They cannot be ignored nor can the perceived needs be changed. With the coming of regulatory and government intervention, coupled with an increase in graduating veterinarians during the past decade, that psychological paradigm of our professional heritage has been destroyed, probably forever.

The veterinary healthcare marketplace is dramatically different today and so is the spectrum of consumer choices. It was not long ago that just hanging out a clinic sign caused a full reception room. But now, more options exist for the consumer. Our clients have begun to base their decisions not only on visual images and technology but also on other factors, such as service and psychological bonding.

In the past decade, books by James Herriot provided our profession a Teflon-coating that would make Reagan envious. But it won't stop the educational changes seen in our clients. The veterinary I.Q. of the average client increases daily. We need to be current in our healthcare delivery techniques. But what of the future? In what way will practices serve with service? How can we be ready to meet the community needs that will emerge during the last half of the 1990s?

Reality Check #11

When the first edition came out (circa 2001), there were 70.8 million cats and 61.5 million dogs. As of last year (circa 2007), there were 81.7 million cats and 72.1 million dogs. Over 17% of the cats are over 11, while 14% of the dogs are over 11 years of age (more cancer care is needed with aging populations).

In communities under 100,000 population 70% of the households have pets, while as communities grow, pets get less; In communities with populations above 2 million, only 55% of the households have pets. The "national average is 59% of all households have pets.

 Dog households average 1.7 pets, averaging 2.6 visits to their vet each year

 Cat households average 2.2 pets, averaging 1.7 visits to their vet each year

Some surveys have attempted to delineate pet ownership, using terms like family members, companions, child status, and pets are property. The consistency is in pets is 9-11, this number has dropped to 2.1% of the pet owning households.

Consider using the above demographic information when profiling your medical records for client and patient access and ownership rates.....most practices have been so complacent, they don't know their own community demographics, much less their own client/patient demographics. Be unique, start doing demographic trend analysis for your own practice; try to understand who your clients are, why they come, and what will bring them back more often.

Client Relations

To manage the demand for service we must be ready to re-tool the internal operations. Quick fixes won't suffice. If you add a tie to your daily wear, it does not provide for better service. Putting the AAHA logo on your door and following their Standards only for the week before the survey does not meet the intent of quality care for companion animals. Converting 5" x 7" medical record cards to ANCOM or PROFILE pocket files with multi-colored tabs did not dial the phone nor train the staff in patient advocacy communication; going from paper to electronic records, while often improving internal documentation access, still does not reach out and bond a client to the practice, increasing prices based on some consultants "compatible with office call charges" does not convey the perception of value nor does it select the wrong priced items. Unless we actively promote our services, we will always be in a "product based" price competition with each other. Then no one can win!

Old practice management messages and training has been towards: errorless task performance, external solicitation promotions, retrospective performance appraisals, and similar status quo activities. These old habits must be erased. Today's practice requires an environment of continuous quality improvement (CQI), one that promotes individual problem solving, creativity, and expansion into new healthcare ventures. Veterinary hospital directors must understand that internal operations are far more than cash register productivity and budget. The better practices today realize that effective internal operations means to recognize that service must be proactively managed.

For a veterinary client relations program to be effective, the veterinarian must first conceptually understand that the client comes with a "social contract", one based on trust and "do no harm". The patient deserves the best of care for what is "needed", but is not just a potential to be harvested by adding more fertilizer. We must insure that patient advocacy is the goal. The needed healthcare must be offered. The client has the right to know what is the best level of care available to meet the pre-existing need. We also need to remember that our clients have the privilege and right to waive or defer a service for their pet. That deferral or waiver must appear in the documented medical records to ensure the continuity of care. As the attending veterinarian, paraprofessional team member, or even as the hospital director, you must be fully committed to and have a passion for patient advocacy as well as client-centered relations. You cannot purchase or lease client-centered relations; you must listen. After listening and finding out what the client is really asking, it is the way you live, work, and think.

Today's practice manager has many responsibilities: good staff relations, good internal client relations, good patient advocacy, professional quality healthcare, veterinarian satisfaction, good staff teamwork, and effective maintenance of state of the art medical and surgical services. There are many techniques in today's management literature to help reach these practice goals. Here are a few key elements to consider when you build a client relations program:

 Realize that client relations exceed guest relations. Clients are stressed and must trust you. Guests only want to be entertained and pampered. The foundation for client satisfaction and subsequent practice bonding is a system which is founded on listening. The good Lord gave each person two eyes, two ears, and one mouth - remember that ratio when using the senses with a client!

 Veterinary team members are supported, managed, rewarded for listening and responding to client needs; the caring leader is one who intervenes only when appropriate.

 Make hiring decisions that are service-oriented as opposed to entirely technology driven. Hire for attitude; train to a solid trust-level of competency. Create job expectations and performance standards that are service specific. Have tenured staff members re-write existing job descriptions annually, to incorporate the new client bonding goals, so there is no such thing in the practice staff as a bad attitude.

 Emphasize positive reinforcement of simple tasks. Unfortunately, most veterinarians still think that if you are technically competent you are technically good. Veterinarians are usually high achievers, they assume that simpler things -- phone calls, interactions, greetings at the desk -- should just happen. You must participate regularly in role-playing scenarios and have the staff evaluate the communications for both patient advocacy and client-centered, caring, service messages. Front desk interactions should also be observed for body language messages, so on-site role-playing is essential.

 Begin managing by holding every staff member accountable for client-centered service, not just higher productivity and "doing more with less". If necessary, be prepared to fire (or desire) someone who doesn't use the phone correctly after repetitious training. Recognize that a verbal communication style does not equate to effective communication, just as a concise delivery style may not convey concerned patient advocacy.

 The follow-up actions with the client will speak loudly about the practice, so ensure each staff member is given the opportunity to show what they understand. While you are listening, have them place a "real" phone call that is based on patient advocacy, such as: "Ms. Jones, now that you've been home a couple of days, the doctor and I just wanted to say thanks for visiting our practice and we also wanted to see if you had any questions now that you've had some time at home." - or -"Ms. Jones, this is Vicki at the Successful Veterinary Hospital. We know you'll be back in ten days for the follow-up appointment (next booster), but just wanted to be sure that we answered all your questions and concerns".

 Start to accept client questionnaires as tough management data and not as quarterly "nice to know how things are going" reports on public relations. There are only two ways to get a true line on client attitudes: 1) a short targeted survey completed at home with a return stamped-addressed envelope, and 2) a Council of Clients, where the discussion is eyeball to eyeball with a client group (confidence in numbers). The home survey generates a 32 percent to 64 percent response (dependent upon client loyalty) and helps bind your practice to the client. It shows you still care. The Council of Clients gives you a way to improve immediately, since it closes with the question, "What can we do to be of greater service to the community?" A newsletter mailing helps maintain client loyalty but the personal concern with their feelings helps build the bond.

 Emphasize value in your products in the services, and in the patient advocacy role of your practice. Don't feel pressured to be the lowest-cost provider. You can be on the higher end of the cost spectrum, but only if the market perceives an association between your services and value. Concurrently, know your costs. Don't ever attempt to operate in a fixed price environment (e.g. quotables) without knowing costs of providing services. Be prepared to invest in effective cost accounting systems.

Wellness, the HAB & Practice Liquidity

In a general companion animal practice, many equine practices and exotic animal care programs, client-bonding is a critical component of market differentiation. At the base of that client-centered practice effort, lays the human animal bond. The human-companion animal bond has been fostered by the animal stewards, not our profession; it must be respected. While it can be nurtured by a healthcare delivery team, the simple recognition of the animal's important in the family's life is all that is needed to understand the power of the bond in client acceptance of care and return rates. There are a few key statistics to understand when looking at wellness as a practice initiative:

 Current surveys show that 89 percent of the companion animal households consider their pets "members of the family".

 A third of those households give their pet "child" status.

 About 66 percent of the companion animal owners will seek veterinary care more often to extend their pets life.

 About 54 percent of the companion animal owners will seek veterinary care more often to detect disease earlier.

 In most general practices, the top 30 percent of the clients leave about 80 percent of the money; pet parents are the reason for net income occurring within the potential levels of care.

 About 73 percent of the companion animal practice clients are women, and have different communication needs from men (who have established most practice paradigms).

 We kill about 6 million dogs a year for behavior problems, breaking the HAB and decreasing the practice patient population.

 An average companion animal veterinary practice makes about 70 percent of the income from outpatient for about 30-40 percent of their overhead; inpatient care accounts for 30 percent of the income, and 60-70 percent of the overhead.

 The AVMA mega study showed a kind, caring and informative healthcare provider was why clients selected their veterinarian, and even in the face of a 10 percent fee increase, over 80 percent would not change their veterinarians. Good medicine is good business.

Third Party Payments Help Affordable Pet Care

As any veterinary practice calibrates their fee schedule to a national standard, such as the AAHA Fee Survey® for their region, the AAEP® Fee survey, the Veterinary Pet Insurance (VPI) reimbursement schedule, or even the NCVEI Exam Room web site (available to AVMA and AAHA members for free), one thing usually become very obvious - the practice's prices have been too low. The most recent information from VPI® states that reimbursements are only about 60 percent of the established indemnity reimbursable rates.

Care Credit® takes a different approach, where they pre-qualify a client and issue a credit line; 180-days same as cash. The client who wants to "charge" care should be offered this option, since if they are "turned down" by Care Credit®, your team members are not the "bad guys", but you have been alerted to a potential accounts receivable problem if the practice allows them to use your money for free. The cost to a practice of taking the Care Credit® credit card is about the same as American Express. The time it takes to pre-qualify a client for Care Credit® is usually less than 30 seconds on the telephone, so it is ALWAYS a great idea to ask, "How are you planning to pay today?" when the client initially accesses the veterinary practice (especially for urgent care when they are first time patrons).

Pet insurance is becoming better known, especially with the advent of wellness care reimbursement. In Australia there are 5 respected pet insurance companies, all with the same underwriter; in the U.K., I stopped counting at 45 pet insurance companies. In the USA, there are three nationally respected pet insurance companies (these are based on "property insurance" coverage for pets (indemnity insurance), with no discount or practice payments).

 VPI® offers over $210 of wellness care reimbursement to the owner for less than $100 per year premium; the wellness reimbursement basically pays the client wellness care reimbursements which exceed the total premium for animals under five.

 PetsBest® offers a flat-80 percent reimbursement after the deductible, and better than double the wellness premium in reimbursements without deductible, so practices know what is being subsidized, and has quarterly renewals, to better respond to client concerns.

 Pet Care has aggressively penetrated the shelter market using a multi-layer support plan (e.g., software, microchips, direct clinic reimbursement, etc.).

These three insurance companies are making the miracles of modern veterinary medicine available at affordable prices, and should be the answer to price sensitive clients rather than designing an internal discount system that requires net to be lost. In the next budget cycle, consider becoming professional in all the professional marketing efforts of your practice. Practices that are melding the use of Care Credit® money with the VPI® reimbursements, which are usually received before the first Care Credit® payment is needed, are finding that pet health care is now affordable at the higher fees needed to promote veterinary medicine as a career to staff and doctors.

Help the veterinary medical profession by helping yourself and your practice; accept the value of third party payers. Learn to market niche, not just undercut prices. Instead of saying, "Our clients cannot afford that (so the patient suffers)", start saying, "How can I help my clients afford that! (so the patient never suffers)". Consider developing a practice-specific line of veterinary healthcare services, not a line of discounted services and coupons; include methods of payment as well as methods of delivery. The sequence is often developed as follows:

 The doctor discusses the left hand column of an "estimate" (which we call a healthcare plan for obvious reasons), while the outpatient nurse is running a travel sheet through the computer to get a pre-printed healthcare plan (AVIMark® allows to the practice to change the name, and with 5.0 update, Cornerstone® allowed the change also).

 The doctor closes the discussion of services needed (and wellness value of each service) with, "Is this the level of care you wish for Fido today?" (In marketing, this is called a "trial closure", since it is not yet a commitment to buy anything).

 If it is a positive reply, the doctor turns to the outpatient nurse and says, "Let's get the paper work signed and schedule Fido for an admission." Then the doctor departs the room.

 The Outpatient nurse presents the Healthcare Plan (computer driven estimate from the veterinary software), now with the costs following the services discussed by the doctor, and presents the hospital admission consent form (see AVMA Directory).

 She waits for signatures, and then asks, "Will this admission be better today or next week for Fido and you?"

 If it is a negative reply (as in, "We cannot afford this today."), the doctor turns to the outpatient nurse and says, "We are deferring care for Fido for a week while we try symptomatic care; let's schedule a follow-up call for this symptomatic treatment, and a recheck visit to ensure we have restored wellness." Then the doctor departs the room:

 The Outpatient nurse presents the Healthcare Plan (computer driven estimate from the veterinary software), now with the costs following the services discussed by the doctor, and asks, if they want to look at alternative payment methods today or next week when they return.

 She waits for a reply, and then states, "Let me get our practice manager in here so she can explore alternatives with you today."

When we discuss "needs" there is no "optimal care", no "recommended care", no "alternatives"; it is needed care and we do not confuse the client with unclear words. When a client defers care, or asks for symptomatic care, a caring practice increases the surveillance unto well ness is restored; this is called being a patient advocate (respecting the human-animal bond as well as the practice's mission focus). Differentiate yourself and your practice by caring enough to be the best in whatever you stand for.....not just the cheapest!

Affordable pet care is an extension of the charter "to do no harm"; the first rule of medicine. It is a commitment to help the client find alternative ways to pay for the needed care before the crisis occurs. We have discussed Veterinary Pet Insurance® as one option, and Care Credit® as another. Some practices establish a working relationship with a local bank who wants more business, to assist clients on a case by case basis. Some practices do extend credit to established and preferred clients, but add an initial billing fee as well as a monthly percentage to each bill they send. Some practices take "hold checks" or "hold credit card slips"; never post-dated, just held per verbal agreement. And then there are those practices who do not have a credit policy, who try to make different decisions on different days based on different doctors in different moods; this is called frustrate the staff while building accounts receivable.

Become a client-centered practice. Promote patient advocacy. Establish a fee schedule based on nationally known fees, not the guy down the street. Build pride in the staff by ensuring they know where you are to the National fees (Standard Care with VPI® is at approximately 50% expected fees, and Superior Care with VPI® is at approximately 80% expected fees (they are "indemnity insurance" programs, so they "risk sharing" and have ceilings on reimbursements). The days of a doctor-centered practice are coming to an end, as are the days of below standard fees. The technology and scope of services for tomorrow cannot be procured with yesterday's discounting habits. Practices deserve to be able to pay their staff a living wage, and new graduate veterinarians deserve adequate income to pay off six-digit school loans. Affordable pet care is an extension of the Human-Animal Bone Mission, as well as the medical charter "to first - do no harm" We have a "social contract" to help the client find alternative ways to pay for the needed animal healthcare services before the crisis occurs. We have a calling, it started as "tend to the animals of the land" (it never said for free or at a loss). To do less (with services and fee-for-services) is to ignore our sacred duty as veterinary professionals.

Any wellness initiative is not a gimmick, it is a commitment to client-centered patient advocacy. The primary goal of a wellness initiative is to provide practice healthcare teams the information they need to understand it is more than prevention, more than vaccine protection, and more than intensified diagnostic. The needs of animals change with age, breed, species, sex, and genetic predispositions, as well as environmental, family culture and surrounding community factors. Each practice must establish wellness as a core mission focus, and implement within their own programs, as truly a rubber-to-the-road integrated healthcare delivery program.

Wellness Mission Focus of a Bond Centered Practice

Client centered patient advocacy to enhance and extended the quality and duration of life of the companion animal.

Speaker Information
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Thomas E. Catanzaro, DVM, MHA, FACHE, Diplomate American College of Healthcare Executives