VHMA Insiders’ Insights Commentary April 2024
Brittany Yost, CVPM, CCFP
Success Team Manager, Vetsource
Insiders’ Insights: Navigating the VHMA Key Performance Indicators Dashboard - Revenue
As we embark on a new quarter filled with opportunities for reflection and growth, I’m excited to introduce a series dedicated to dissecting the insights uncovered from the VHMA Insiders’ Insights Key Performance Indicators (KPI) dashboard. Each quarter, we'll explore a different aspect, starting with a deep dive into the revenue dashboard.
Understanding the Change in Revenue and Change in Revenue per Patient Year-over-Year Charts
Let's start by breaking down the different aspects of the Change in Revenue and Change in Revenue per Patient Year-over-Year charts:
- There are four filters at the top of the charts that allow you to tailor your analysis by practice size, region, species, and revenue type allowing for a more personalized dive into the data.
- It’s important to note that the trend lines indicate the percent change in revenue over 12 months, not a percent increase in revenue.
- On the Change in Revenue chart, the blue trend line indicates the percent change experienced by VHMA members while the gray line indicates the percent change of non-VHMA members. We can see that VHMA members have experienced an average positive change in revenue of 5.6% over the last 12 months while non-VHMA members recognized a slightly lower increased average change of 5.2%.
- On the Change in Revenue per Patient chart, trend lines suggest that VHMA members and non-VHMA members have experienced similar increased average changes of 7.2% and 7.0% respectively.
- Regardless of patient visit frequency, each patient's revenue is aggregated, providing an overall view of their impact. For example, a cat that comes in week after week for fluids counts as one patient, and the revenue generated by these visits is added together.
- Hover over any data point to reveal actual changes in revenue numbers, providing a deeper understanding of the trends.
Revenue Drivers and Strategies to Protect Profits
What is fueling these changes in revenue? The AVMA’s most recent price increase information stated that while revenue has increased by 7.9%, 9.87% of this gain was attributed to price increases with patient revenue decreasing by 0.3% and visit revenue declining by 1.2%. While significant price increases can be largely attributed to accounting for steep increases in operating costs, the long-term sustainability of these price hikes remains a concern. Outside of raising prices, here are a handful of strategies to safeguard and protect profits:
- Increase usage of payment options to accommodate diverse client preferences, including digital payments and various client needs such as lines of credit (think CareCredit).
- Improve productivity and efficiency to optimize the use of your available resources. Ensure that all members of the practice are operating at the highest level of their qualifications, with veterinarians concentrating on diagnosing, prescribing, and surgery, while credentialed veterinary technicians and veterinary assistants manage all other tasks.
- Exercise better expense control to reduce fixed and variable costs. This includes revisiting internal operational costs such as your worker's compensation plan and merchant services fees.
- Reduce discounts and missed charges to safeguard revenue streams. According to AAHA, the average clinic misses an estimated 5%–10% of charges. This means a practice making $2.5 million in annual revenue could miss out on $250,000 each year.
- Elevate marketing efforts to attract and retain clients. Take advantage of wide-reaching digital marketing opportunities including social media and practice apps.
- Expand workups and client recommendations to maximize patient care. A remarkable 46% of clients prioritize spending on their pets' medical needs over their own, underscoring the significant emotional attachment people have towards their pets and their unwavering commitment to ensuring their well-being and happiness.
- Foster a culture of retention through competitive compensation and benefits. Employee Assistance Programs (EAPs) are often a cost-effective way to give your staff access to financial, legal, mental health, and substance abuse resources.
Driving Growth in Revenue per Patient
The industry continues to see a decline in patient visits with an average change of -6.7% last month. It’s important to maintain your focus not only attracting new clients but also on maintaining existing clients. To drive growth and increase the average spend per patient, consider the following strategies:
- Focus on the client experience. From the moment a client walks through the door to post-visit follow-ups, prioritize exceptional service and care.
- Provide your clientele with a personalized approach to their pet's healthcare. Many today expect this level of tailored care, and offering it will distinguish your practice from competitors.
- Create a feedback loop by gathering insights through post-visit surveys to understand client preferences and areas for improvement. Continually adapt your services accordingly.
- Offer convenience and value through autoship prescription refills and pet product home deliveries. Patients whose owners have utilized their practice's home delivery service visit their practice an average of 3.81 times per year while those that do not use home delivery visit an average of 2.52 times per year.
- Lean into loyalty programs. Incentivize repeat business and referrals with loyalty rewards, fostering long-term client relationships. In a recent analysis of loyalty member behavior in 2022, it was found that first-time members spent an average of $385 more than they did in the year before joining the program, whereas non-members spent $5 less compared to the previous year.
- Embrace Technology. Leverage software solutions to streamline processes, enhance communication, and deliver a seamless and convenient client experience.
Understanding the Revenue Summary by Month and 12-Month Revenue Summary Charts
Let's continue by breaking down the different aspects of the Monthly Revenue Summary and 12-
Month Revenue Summary charts:
- The data presented can again be filtered by practice size, region, and species.
- Revenue change is broken down into broad categories, offering a more detailed snapshot of where the percent change in revenue is being realized.
- Change in revenue information presented includes VHMA member data.
- March 2024 is the first month of the last 12 where we’ve seen a negative percent change in revenue growth. Exam, pharmacy, professional services, and surgery revenue all declined while the percent change in vaccine revenue increased by 2.7%. Throughout the last 12 months, exam, professional services, surgery, and vaccine revenue increased by an average change between 8 and 10%, and pharmacy revenue experienced an average change of 5.3%.
- Hover over any bar in the chart to view the dollar change in each category.
Strategies for Driving Revenue Growth by Category
Let's explore actionable strategies to drive growth across these key revenue streams:
- Exams
- Implement wellness packages to bundle services and enhance value for clients.
- Offer convenient appointment options including telemedicine and extended hours to accommodate your clients’ busy schedules.
- Provide transparent pricing to foster trust and clarity in client communications. Emerging competitors like VetIQ Petcare and Chewy Vet Care provide pricing directly on their websites.
- Professional Services
- Promote annual wellness bloodwork. Educate clients on the importance of regular bloodwork to detect early signs of illness and promote overall pet health.
- Develop senior wellness packages. Offer comprehensive screenings tailored to senior pets, addressing age-related health concerns and early detection of various diseases.
- Surgery
- Personalize treatment plans during pre-surgical consultations to ensure comprehensive care tailored to each patient’s needs.
- Offer surgical packages such as discounted dental cleanings when bundled with other surgical procedures.
- Provide flexible payment plans to alleviate financial barriers and enhance accessibility to essential services.
- Vaccines
- Educate clients about preventative care. Emphasize the importance of vaccinations in preventing disease and maintaining pet health.
- Take advantage of automated reminder systems to ensure clients stay on schedule with their pet’s vaccinations. Don’t be concerned about over-communicating the message - the marketing Rule of 7 states that a customer must see a message at least seven times before they’ll be provoked to take action.
- Customize vaccine protocols. Tailor vaccine schedules based on each pet’s lifestyle and environmental factors.
What Comes Next
As you navigate the upcoming months and implement different revenue growth strategies, remember to leverage insights from the VHMA dashboard. Monitor trends, adapt to changing market dynamics, and continuously innovate to stay ahead of the curve.
In the upcoming quarter, we will conduct an in-depth examination of patient data and explore how you can effectively utilize current KPIs within your practice to ensure the delivery of outstanding care and service to our beloved animal companions.
Would you like to compare your practice’s performance head-to-head with other VHMA member practices and the national average in one convenient KPI dashboard? VHMA members can receive this report for free! Not a VHMA member? No fear, you can still sign up for this dashboard for only $41/month. Learn more here.
Sources
Data on file at Vetsource
Felsted, Karen. Insiders’ Insights Review - Economic and Management Trends. Veterinary Hospital Managers Association (VHMA). 29 February 2024. Webinar.
Galvin, Jenn. “Maybe Money Does Grow On Trees.” American Veterinary Hospital Association (AAHA) NEWstat, 9 September 2023, https://www.aaha.org/publications/newstat/articles/2023-09/maybe-money-does-grow-on-trees/.
Massecar, Aaron, and Kelly O’Brien. “Navigating the New Pet Care Landscape.” Today’s Veterinary Business, vol. 8, no. 2, April/May 2024, pp. 36-39.