As noted over the last few months, growth in revenue and patient visits have all returned to pre-pandemic levels, and this trend continued in June 2023. Revenue growth over the last year has hovered in the ~5%-7% range, and June 2023 is no different at 6.1%. (Note there were the same number of workdays in June 2023 as in June 2022.) Patient visit numbers have averaged around -1.0% in the last year; June 2023 is similar at -1.1%. New client numbers continue to decline as well.
Most veterinary hospitals have been dealing with either anemic visit growth or an actual decline in veterinary visits over the last two years. While there are multiple reasons for this overall and, of course, the specific reasons for any given hospital vary, one issue that many hospitals are dealing with is the lack of available appointment slots. And the lack of available appointment slots is often due to the lack of doctors. As we all know, finding and keeping doctors is a challenge these days and an area that every practice needs to focus on.
Compensation isn’t the only reason doctors accept or stay with a job at a particular hospital, but reasonable compensation has to be in place to have any hope of keeping doctors in the long run. Practices need to review all of the factors that are important to retaining doctors on a regular basis, and compensation is a good starting point if your practice is having trouble finding or keeping veterinarians.
I see many practices where the base pay or guaranteed salary for a veterinarian is less than $100,000, yet according to Stacy Pursell, the founder and CEO of The VET Recruiter, “Any practice who is paying their veterinarians less than $100K in guaranteed base salary is at risk of losing their doctors.” And, of course, base pay isn’t the only issue—total pay must be reviewed as well. Total pay (including base pay/draws, production or other bonuses, signing or retention bonuses, and benefits) is often much higher, particularly for full-time high producers.
Obviously, levels of compensation vary in different communities and in different parts of the country, so gather information about your area to have something to compare to. Local market information can come from ads, blogs, what candidates tell you, what colleagues say they are paying, information from local vet school surveys, and exit interviews. Published salary surveys can be useful but may not be as accurate as needed in times of rapidly changing salaries. If you have doctors who are paid less than market wages, don’t assume they are ok with it just because they haven’t said anything. You don’t want to be surprised by an unexpected resignation. Be proactive with salary changes, benefits (particularly PTO and CE), shorter work weeks, and flexibility in scheduling. Remember, too, that the ability of a doctor to be productive is just as dependent on the practice operations as it is on the doctor themselves, so make sure the practice is doing its part. Increasing doctor productivity doesn’t just mean telling doctors to work harder.
Higher pay is here to stay, and saying you can’t afford it isn’t going to work. Practices must figure out how to make it happen. There are multiple ways to increase revenue, including:
· Appropriate fee increases
· Better marketing,
· Improved efficiency
· Greater investment in technology
I’ve previously talked about practice culture, which remains a critical driver regarding whether employees stay at a practice. A great culture won’t replace pay scales that are significantly under-market, but it can make a difference in how much the practice has to pay to keep employees.
Finding and keeping more doctors increases the ability of the practice to see more patients and attract more clients. Follow-up with additional marketing and making the kind of value changes pet owners want.
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Karen E. Felsted, CPA, MS, DVM, CVPM, CVA of PantheraT Veterinary Management Consulting, www.PantheraT.com, provide data review and commentary.
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