Blogs

Revenue

The VetSuccess data for February 2021 showed a decline in revenue for both VHMA members (4.8%) and non-VHMA members (6.4%) compared to the same month in 2020.  There was one less workday (Mon-Sat) in February 2021 compared to February 2020 (a 4% decline in workdays), which undoubtedly accounts for at least some of the change. 

In last month’s blog, we included a chart showing some of the factors that drive revenue growth (or the lack thereof.)  While the difference in workdays is no doubt part of the reason for this month’s decline, there could be other reasons as well such as an increase in discounts or missed charges.   It is not uncommon for 5-10% or even more of total revenue to be lost via discounts or missed charges in a typical practice.  This can be particularly true when practices are busier than normal and charges can slip through the cracks.  Discounts are a deliberate choice by a practice to reduce the cost of a short-term product or service because a long-term gain is expected.  Missed charges, however, happen accidentally because someone forgot to enter them into the record. 

Most practices have four different kinds of discounts—charitable contributions, employee discounts, marketing discounts, and random giveaways.  The goal isn’t to stop all kinds of discounts but to eliminate the random ones that provide no value to the practice.  For example, after reviewing your records, you may find that a no-charge first exam for new clients works well in attracting enough of the kind of new clients you want to keep that you’ll keep offering this discount, but a discount given to an ex-employee’s son does nothing to bring in future revenue.

Ongoing medical record audits and an analysis of the findings are essential to managing both discounts and missed charges.

Year over year revenue per unique patient also declined for both VHMA (4.3%) and non-VHMA members (4.7%.)   This figure would not necessarily be influenced by the reduction in workdays because both the numerator and denominator in the calculation would change.  The figure could be declining as practices work through the sick pet backlog brought on by the pandemic and return to doing more wellness work.  If the downward trend continues, the “why” should be investigated by each practice.

Changes in revenue types are in step with changes in the caseload due to the pandemic—more sick pet cases vs. wellness and more clients buying OTC products from online sources outside of the veterinary clinic as well as the reduction in workdays in February 2021.

Patient Visits

In February 2021, there has been no increase in the % of total patients who are new patients vs. returning patients for either VHMA and non-VHMA practices compared to January 2021.   New patients represent 12% of total patients for VHMA members and 14% for non-VHMA members. 

The number of patient visits in February 2021 compared to February 2020 declined for both VHMA members (1.1%) and non-VHMA members (1.3%), with the decline in workdays in 2021 likely accounting for at least some of this.  Another reason for this decline may be that in February 2021, most practices were seeing patients curbside, whereas in February 2020, practices were still seeing cases inside the practice and hadn’t yet had to deal with all the pandemic changes which have made it difficult for practices to work as efficiently as before.  While every practice has dealt with some really grumpy clients who hate curbside, many pet owners are happy with it and don’t want to see this option go away as we move away from the pandemic.  Practices will have to continue to find ways to see patients efficiently in spite of this.  Increased use of technology is essential and seeing people come back into the workforce as kids go back to school and the world opens up will also help.

Practice Health

Active patient numbers (defined in the VetSuccess data as one who has had a medical service in the last 18 months) have grown in both VHMA and non-VHMA practices over the previous 12 months, although there has been essentially no change in the growth rate in February 2021 vs. January 2021.   There has been a decline in the number of lapsing patient numbers in both VHMA and non-VHMA practices in February 2021 vs. February 2020; however, we don’t know if this means more clients are being seen within the recommended period of 12 months or if they have not come in at all in more than 18 months.  The practice’s management team needs to track the number of patients seen again within 12 months, within 18 months, and after 18 months in their own practice in order to have a better idea of what’s going on.

In spite of the fewer workdays in February 2021, there has been a strong increase in the number of new clients in both VHMA (12.9%) and non-VHMA practices (13.8%) in February, 2021 vs. February 2020.   Before the pandemic, new client numbers were falling in many practices, but this trend reversal seems to be from a combination of more people owning pets due to the pandemic as well as many pet owners visiting other practices because their regular practice was closed or didn’t have available appointments.   It is unclear at this point whether the increase in pet ownership will last.  One study done by M/A/R/C Research in conjunction with Animalytix showed that about 60% of first-time pet owners who got a pet during the pandemic underestimated the responsibilities of pet ownership, and 58% said they were going to rehome their pet after the pandemic.

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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.