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Shown below is a visual version of both the March 2021 VetSuccess revenue metrics shown on the Insiders’ Insights KPI dashboard (https://www.vhma.org/resources/insider-insights) as well as other related metrics that also need to be reviewed regularly in order to get a full picture of what’s going on in a practice.  Other metrics could be included as well, but this serves as a good starting framework.  This graphic makes it easier to see the hierarchy of the metrics and which ones influence others. 

Revenue is at the top of the heap; it is a useful metric to start with but very big-picture.  It’s difficult to decide on management action without reviewing the specific factors that drive revenue.

• The VetSuccess data for March 2021 showed an increase in revenue of 27.8%. Revenue increased for both VHMA members (27.2%) and non-VHMA members (27.9%) compared to the same month in 2020. 
• This is the largest monthly increase seen since the pandemic started to affect veterinary practices in March 2020. While one factor is the additional work day (Mon-Sat) seen in March 2021 compared to March 2020 (a 3.7% increase in workdays), the most important factor in the comparison is that this is the first month in the month-to-month analysis where current growth is compared to a pandemic month that had just seen a dramatic drop in practice activity.
• We don’t know how much of this current month’s growth is “real” because we don’t know what March of 2020 would have looked like had the pandemic not struck.
• Year-over-year revenue per unique patient showed an increase for both VHMA (10.1%) and non-VHMA members (9.9%) as well. The total rate of growth in spending per unique patient (9.9%) is significantly less than the total practice revenue growth, however, because much of the total growth was driven by the number of clients seen rather than client spending.  See patient visit data below.
• Changes in revenue types seem to be in step with the changes in the caseload seen since the start of the pandemic—more sick pet cases as opposed to wellness visits and more clients buying OTC products from online sources outside of the veterinary channel, but we don’t have any pre-pandemic data to measure this against.

 As noted above, many things influence revenue, and it’s important to know not just that a practice is growing or declining, but why.  Patient visit data is next.

• The number of patient visits grew dramatically in March 2021 (15.9%.) While the extra work day in March 2021 likely contributes to this, the biggest reason is the abnormally low number of patient visits in the comparison month (March 2020.)
• The same rate of growth (15.9%) was seen in both VHMA and non-VHMA practices.
• The percentage of patient visits resulting from new clients vs. returning clients is 14% in March 2021, with similar figures seen for VHMA practices (13%) and non-VHMA practices (14%.) Over the last year, this percentage has ranged from 11%-13% for VHMA practices and 12%-15% for non-VHMA practices.  We don’t have pre-pandemic data to compare to but suspect this is somewhat higher than seen in pre-pandemic times because new client numbers have been up in many practices.  Whether new client increases are real or due to “practice hopping” as clients try to find a place they can be seen quickly remains to be seen.

The third category of data collected by VetSuccess is about active patients and new clients.

• Active patient numbers (defined in the VetSuccess data as one who has had a medical service in the last 18 months) increased in both VHMA (4.5%) and non-VHMA practices (5.5%) in March 2021; this growth has been steady over the last 12 months.
• Lapsing patients are defined by VetSuccess as those whose last medical service was 14-18 months ago; i.e., these are a subset of active patients.
• Lapsing patient numbers have changed erratically over the past year, with March 2021 growth at 3.3% (2.7% for VHMA practices and 3.6% for non-VHMA practices.)
• Other published benchmark studies have historically used 12 months for the definition of an active client because that correlates with the frequency with which most preventive care services are recommended, and many people feel this is a better number. Regardless of nomenclature,  practices should track those clients who have been to the practice within a year, those who are in some kind of a lapsing period (perhaps 13-18 months), and those who are considered lapsed (i.e., have not been to the practice in over 18 months.)
• New client growth showed a dramatic increase (38.1% in total) in March 2021, with VHMA practice numbers growing at 34.8% and non-VHMA practice growth at 38.5%. Again, the comparison to March of 2020 doesn’t represent real growth because many practices were shut down or had very limited caseloads in March 2020.
• Leaving March 2021 aside, new client numbers have been much stronger during the year of the pandemic than they were pre-pandemic. 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.  

The usual caveats apply:

• The management team must know what the practice profitability is to know how financially successful the practice is. These are revenue metrics, and revenue alone doesn’t dictate profits; expenses must be controlled as well.  Practices can have high levels of revenue and still not be very profitable.
• There is no one revenue metric that will tell the management team everything it needs to know. To understand how and why practice revenue is changing (or not) and to have the information necessary to influence it in the direction desired, the management team needs to look at all the metrics in the graphic above each month.

➤ Download Insiders' Insights - KPI, April 2021 Report

➤ VHMA Members can access the dashboard to drill down by region, species, and practice size filters, access the interactive KPI dashboard

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