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Revenue growth in September of 2022 compared to September 2021 wasn’t as strong as in August 2022 (5.7% vs. 8.4%.) Remember, however, that August 2022 had an extra day in it compared to August 2021, so the higher growth last month was somewhat driven by that. The number of workdays in September 2022 and September 2021 were the same. Growth for VHMA practices in September 2022 was 6.0% which is a little less than the average over the last 12 months of 6.7%. This indicates a softening in growth as we also saw last month. 

Revenue per unique patient increased 8.5% in September 2022 compared to the same month in 2021, however, patient visit numbers actually declined by 2.0%. The increase in revenue per unique patient is most likely due to fee increases and some degree of greater acceptance of medical recommendations by pet owners. New client numbers continue to decline. 

Another indicator of softening in revenue growth (in spite of greater than normal fee increases) is the decline in the rolling twelve-month average which has definitely declined over the last few months. In March 2022, revenue growth over the previous twelve months was 11.4% but this was down to 6.7% growth in the twelve months ending in September 2022.  There is certainly nothing wrong with 6.7% growth; it is higher than the growth in the overall economy as a whole and similar to growth in the veterinary profession prior to the pandemic. Growth may not be as easy to obtain as we move forward in a very uncertain economy and a difficult hiring market and practices will need to focus more specifically on marketing, productivity and efficiency, client service and practice culture. Creating an environment which is attractive to prospective employees and allows them to thrive is more important than ever.  

Creating an outstanding culture is as much an art as it is a science. Most of what is written about culture seems to focus on the “art” aspect. Without the “science” aspect, however, it’s almost impossible to get a good culture to stick. The “science” aspect is about creating the structure and processes upon which a healthy culture can then be built. No one wants to work in a chaotic environment, particularly when practices are as busy as they are today, and structure and process keep a practice running smoothly. Structure and process don’t replace culture in making a practice a place people want to work but they make it possible to create the culture. 

What are the questions a practice needs to ask of itself in order to create this structure upon which a healthy culture can be built?  

Great organizations of every kind are dependent on leadership which, like culture, can be difficult to define. According to Merriam-Webster.com, there are several definitions of leadership including “the office or position of a leader,” “capacity to lead” and “the act or an instance of leading.” While all of these are technically true, none are very helpful in providing insight into what is a good leader. Another definition with more insight is: “Leadership is a process of social influence, which maximizes the efforts of others, towards the achievement of a goal.”ⁱ This definition does a good job of emphasizing that leadership is not about job titles or process but about the ability to influence others to move in a certain direction. Some of the questions a practice needs to ask of itself and, more importantly, be able to answer regarding leadership include: 

• Is there agreement within the practice about how leadership is defined, who is a leader and who isn’t? What traits do the leaders have in common?
• What are examples of specific actions an employee takes that indicates they are a leader?
• What formal and informal training in leadership does the practice provide to its employees?
• What questions does the practice ask during the hiring process to assess a potential employee’s leadership abilities?

Practices are all about people and the people related functions are some of the most critical in the hospital. Attracting potential employees to the practice, hiring the right ones, training them, retaining them, and when necessary, letting them go without creating unnecessary trauma aren’t just side jobs in a practice. Without the right people, the practice won’t be able to offer the medical care and client service pet owners want. Nothing else will be done well if the right people aren’t in place. Some of the questions a practice needs to ask of itself regarding the people aspect of the practice include: 

• Does the practice have a complete, written, up-to-date Employee Handbook that describes all important policies and procedures? More importantly, is this information conveyed to employees and do they understand why the information is important and how it contributes to the practice culture and the ability to provide great pet care?
• Does the practice have signed compliance statements from all employees indicating they have read and understood the Handbook and agree to abide by the policies of the practice?
• Is the Employee Handbook reviewed regularly to insure it is accurate, up-to-date, easy to read and understand and legally compliant?
• Does the practice have current, accurate job descriptions? Are the job descriptions updated regularly with input from the people who actually do the job?
• Does the practice provide employees and potential employees with a clear description of their specific job duties and responsibilities including their reporting relationships?
• Does the practice have an effective and up-to-date methodology for attracting potential employees to the hospital?
• Who does the hiring in the hospital? What training have these individuals had in effective interviewing and hiring skills and in the laws governing hiring and the hiring process?
• Does the practice have a standardized, effective, and legal process in place to help with the job application/resume review, interview and selection process?
• Do the questions asked during the interview process specifically identify skills the hospital needs from those it hires?
• If pre-employment testing is used, are the tests nondiscriminatory, administered to all appropriate candidates, and related only to job skills? Most importantly, do they actually provide information that correlates with job success?
• Are references checked on all candidates? Has the person who checks references been trained in how to effectively collect this information?

The areas discussed above aren’t new ones, but many practices still don’t fully understand the correlation between these items and the creation of a great culture. People don’t just walk into a hospital and instantly perceive whether it has a great culture or not. They make that assessment based on specific things they see and hear. For example, employees who don’t know what their responsibilities are won’t be able to do a good job and will perceive the hospital as poorly managed. They won’t stay long. Employees who see illegal questions asked during interviews will perceive the hospital as one that is not ethical and not one they want to work at. Every action a practice takes contributes to the actual culture and the perception of culture by employees. 

It’s not enough for the management team to go through and answer these questions with a “yes”, “no” or “maybe.” They need to be able to articulate specifically how these things drive a good culture and specifically what the hospital needs to do to improve. 

Of course, leadership and hiring aren’t the only areas hospitals need to evaluate; we’ll talk about more of them next month. 

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Data review and commentary is provided by Karen E. Felsted, CPA, MS, DVM, CVPM, CVA of PantheraT Veterinary Management Consulting, www.PantheraT.com.