Large animal veterinarians must succeed on two levels — they have to deliver service, and they need to make money. The challenge to accomplish both gets tougher with the vagaries of the beef market. For instance, the veterinary profession, which specializes in long-distance house calls, is particularly affected by rising fuel prices.
One solution is to raise prices, but there are limits to how high fees can go before clients begin to balk and stop calling or go elsewhere. That leaves cost cutting as one of the best bets for boosting vets' bottom line. The trick is to cut costs without cutting service.
One possibility is energy conservation. The necessary savings may not be there, however, unless real inefficiencies exist. There are only so many light bulbs you can turn off, says Robert Deegan, a veterinary practice consultant in Otter Creek, IA.
Money management is another to consider. Practitioners should perform a full review of their money management each year, he says, paying particular attention to the source of debts.
One of the worst debt generators is buying large quantities of pharmaceuticals in order to qualify for volume discounts from the manufacturer. When the bill comes due, many vets resort to a bank loan or credit cards. Others carry the debt with the drug company and pay interest.
“You should not have more than four weeks of pharmaceuticals on hand,” Deegan says. “That keeps you from tying up money for a long time. And it means you're using supplies promptly.”
Buying too much of a slow-moving drug not only wastes money but ties up capital. Plus, dated products may expire before they're needed.
“If you have 100 of some drug and 50 of them go past expiration, you've wasted half your money,” says Frank Garry, professor of clinical sciences at Colorado State University (CSU).
Big-ticket equipment is another potential source of debt. Ranchers call it “buying too much iron” — pickup trucks, hay bailers and other expensive items. Vets can travel the same slippery road by buying expensive, but seldom used, diagnostic or operating equipment.
“Laser surgery equipment is one of those tools,” says Deegan. “There aren't many large animal clients that want laser surgery; it's more of a small animal tool. You sure won't take it out to the ranch, and the device can run $30,000 to $50,000.”
It depends on the practice, Deegan says. For some vets, a diagnostic machine used to check blood counts or search for disease-causing agents might quickly pay for itself and then generate a profit. In that case, the expenditure might be worth it.
Continuing education is another area ripe for savings. Vets are required to keep up with their field, and the cost of travel to distant universities can be significant. In addition, the cost of meals and lodging can be a drain.
However, you may be able to find the same continuing education services close by. This saves on airfare, meals and lodging. “Last week, I drove one hour and 15 minutes to a conference in Cedar Rapids,” says Deegan. “It cost $65 for the seminar, plus gas.”
Another big expenditure is the cost of maintaining a veterinary office and its equipment. If the building has space, expenses can sometimes be cut by renting space to another tenant or to another vet who may also share the cost of equipment.
CSU's Garry says he knows of one arrangement in which three veterinary practices share a building, inventories and a secretarial pool. But he cautions that vets should assess the situation before bringing in another vet to share costs.
If, for example, you're in a town with only enough business for one vet, you will cut the revenue pie in half by bringing in a second vet.
Then, occasionally there's the drain of rising gasoline prices. Deegan suggests vets ask themselves whether the pickup is always needed.
“When I was in practice, I carried around everything in the universe in my truck, and I didn't need a tenth of it when I was doing my rounds,” he says. “An organized vet can probably travel in a car.”
European vets routinely use cars to do large animal work, he adds. They never use trucks that American vets regard as a staple. In reality, however, few U.S. vets would trade their pickup for a sedan.
Nonetheless, there are still ways to cut out-of-pocket fuel costs. One is to organize the workday to minimize the number of miles driven. For example, cluster customers so that you see several on the same side of town in a row.
Another tactic is to plot travel to take the shortest routes. In addition, organize personal trips into town to get as much done as possible in a single outing.
“I go to Rotary on Wednesday,” says Deegan. “I stack everything up for Wednesday — shopping, doctors appointments and choir practice.”
And, he leaves his truck at home in favor of his wife's more fuel-efficient car.
Doug McInnis is a business and political writer based in Casper, WY.
Where Not To Cut
As energy prices rise, it might be tempting to turn down or turn off the air conditioning. This could, however, prove a classic example of penny-wise and pound-foolish.
To start with, a hot, muggy office is likely to be an inefficient office. In addition, says veterinary practice consultant Robert Deegan, medicines may go bad, staff may quit and small animals may suffer.
Don't shut down the computer either, he advises. “You may need it quickly, like the next time the phone rings and you need to schedule an appointment.”
And, don't cut staff wages or fringe benefits, which may drive away employees, he says. Hiring and training replacements is time consuming and affects the workload that can be accomplished.
Time Is Money
As you look for ways to cut expenses, look for ways to cut the amount of time spent on each of the tasks that comprise your workweek. The old axiom “time is money” is as true now as it ever was.
For one thing, efficient time management allows you to see more clients or devote more time on value-added services. Or it might simply free up more time to spend with spouses and family. That could head off personal relationship problems like a divorce, an occupational hazard that's both emotionally and financially devastating.
Use a computer to keep track of schedules and inventories. Computerized inventory control also offers a second benefit — it can save money by helping to avoid bloated inventories of drugs and supplies.
“Inventories are the most variable element from practice to practice,” says Frank Garry, professor of clinical sciences at Colorado State University (CSU). “Some vets will have a substantial amount of capital invested in drugs that don't yield them anything.”
Ask your clients to have everything in place — especially livestock — when you arrive. A lot of time can be wasted catching cattle, a task that could be left to client.
Jeff Tyler of the University of Missouri vet school advises his students to tell their future clients that they can't handle a lariat, even if they can. Besides saving time, it also can avoid costly injuries to the vet.
Finally, don't hurry when handling livestock. It may save time, but it invites chaos and injury. Animal behaviorist Temple Grandin of CSU says vets will finish faster if they work slowly and carefully.