Practice Management is an Expensive Hobby for a Veterinarian

By VHMA Admin posted 12-24-2019 11:02

  
Managing Vets

Practice management is an expensive hobby for a veterinarian. Management abilities aside, the loss of potential revenue that occurs when a veterinarian chooses management over medicine is $300 per hour (this figure includes the cost of hiring a hospital manager). If the average veterinarian only manages four hours per week every week, the annual loss to the practice is $75,000. Whether it is done by necessity or out of general interest, it is still a cost to the practice.

The key to maximizing revenue in a veterinary hospital is to keep the veterinarian busy practicing veterinary medicine. Maximizing production is the foundation of the argument for delegating technical tasks to a qualified veterinary technician; it frees up the veterinarian so she or he can move on to other veterinary-only responsibilities. This concept is embraced from a clinical perspective: delegate anything and everything that can be done by a subordinate para-professional. In the most productive hospitals, veterinarians perform surgery, make diagnoses and prescribe treatment. Everything else is delegated to a qualified non-veterinarian. 

Practice management is another story. Unfortunately, many veterinarians are reluctant to delegate management responsibilities. Possible reasons for this include lack of trust, lack of qualified personnel and, ironically, lack of time.

What is the cost of doing it yourself? According to the 2019 AVMA Economic State of the Veterinary Profession, the average companion animal veterinarian generates $603,969 in revenue annually or $300 per hour practicing veterinary medicine. Every hour that the average veterinarian is doing non-veterinary, non-revenue generating duties cost the practice $300 in foregone revenue.

The cost of replacing the veterinarian with a qualified hospital manager is a fraction of this figure. According to the Veterinary Hospital Managers Association (VHMA), there are three classifications of manager. An office manager whose duties include managing support staff and day-to-day accounting and personnel duties can earn $21.46 per hour* (median hourly wage). A practice manager who can have the responsibilities of an office manager and generally some authority in decision-making responsibilities. The practice manager earns $27.50 per hour* (median hourly wage). The highest level of hospital manager is practice administrator. An experienced practice administrator can literally run the hospital and earns an income that mirrors that of an associate veterinarian -- $36.05 per hour* (median hourly wage).

If each week, one veterinarian replaces four hours of practice management with veterinary medicine and hires a practice administrator to work full-time, the practice comes out ahead. This calculation does not even take into account the added benefits a manager can add - budgeting, marketing programs, staff motivation programs, etc.

How do you find the right person and how do you find someone you can trust? If there is no conspicuous person in your hospital presently, advertise your position in the VHMA's online Career Center or you can advertise locally and try to attract someone from another industry with general business management experience. Many successful hospital managers have come from retail, hospitality or banking backgrounds where they learned how to manage staff, clients, budgets, inventory, etc. Once hired, continuing education and a network of management colleagues can help them learn the veterinary specific aspects of the business.

The time spent locating and hiring a veterinary manager will pay off. Most veterinarians are reluctant to give up control but a new set of eyes on operations can enlighten. Managing a veterinary hospital from a business perspective may be just what is needed to convert an average practice into a winning one.

Darren Osborne, Director of Economic Research
Ontario Veterinary Medical Association

*2019 Veterinary Hospital Managers Association Survey of Compensation and Benefits for Hospital Managers. VHMA Members can download the complete report for free through the MemberConnect Community. Non-members may order the report(s) through the VHMA Store.

The AVMA Economic State of the Veterinary Profession Report can be found on the AVMA website.


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