Too often Practices go along from day-to-day with no clear idea of how well the practice is. There are busy times like "heartworm season" and quiet times. But how does one KNOW their practice is healthy?
Just like the astute clinician conducts a complete physical examination on their patient to determine the level of wellness, a practice management examination of your practice by either yourself or a consultant should be conducted annually. In both cases the examination will determine the level of urgency for additional action.
There are 5 broad areas of practice management on which to focus, along with a myriad of others. For our "checkup" purposes we'll focus on the Big Five. They are Financial, Human Resources, Facility, Client Relations and Marketing.
Financial
Only 30% of OVMA practices participate in the economic survey, counting on their colleagues to create the economic information necessary to publish a fee guide. Less than 250 practices conduct the customer satisfaction survey. The very act of participation in the surveys creates financial awareness in the owner that non-participation can never achieve. From this awareness a huge number of questions regarding finances should arise. Here is a tiny sampling:
1. Did I study and understand my annual financial statements, going over them with my accountant? The answer should be an obvious yes.
2. What was my net Profit and was it consistent with a well-run practice? Was the profit higher or lower than last year? At least 25% percent of gross revenue is the benchmark but sadly many practices fall well below this or, worse, don't know their profit margin.
3. Do my expenses match my budget? What!? DO I HAVE A BUDGET????? This is the granddaddy of all questions. Few small businesses have an annual budget, a tool that is paramount to developing financial information.
4. What was the total number of patient visits this year and is this number growing or shrinking? What is the average number of visits per patient per year? Good management software along with an understanding of it is necessary to glean this vital information.
5. What percent of my expenses were attributed to Staff? The answer should be 18-22%. What about Facility costs? They should be in the 5-7% range. Deviations, while justifiable in some cases, must be clearly understood.
Effective management ensures these financial questions and many others can be answered and understood. A practice that makes a high net profit will have good management in place. Profitability not only fulfills one of the underlying reasons for a business' existence but it ensures sustainability and attractiveness to potential buyers.
Human Resources
An examination of the HR protocols of a practice will reveal a great deal about that practice's management.
Is there a Vision, Mission and Core Value Statement so staff understand their role? Is there a hospital manual, and is it updated annually? Do all employees have contracts? Are regular performance and salary reviews conducted for all employees?
How is the hiring process conducted? Is there a formalized interview format and hiring process? Are there frequent staff meetings conducted effectively by key personnel? Are there Standard Operating Procedures for veterinarians, receptionists, technicians and assistants to follow?
Many practices cannot answer these questions affirmatively, yet wonder why work seems chaotic. The justification for inaction ("we have no time", "we're doing pretty good)", is unfounded. It IS worthwhile to have effective HR protocols. The loss of one $40,000 technician will cost the practice $20,000 in training, rehiring and lost productivity costs! Goodness knows the amount of business lost due to unmotivated, unhappy and leaderless employees!
Client Relations
The way clients and their furry friends are treated is another key to the health of a practice. Here are a few questions for which I recommend affirmative answers:
Are there written protocols for meeting, greeting and dealing with clients? Is there a written protocol for how telephone messages are handled? Are doors opened and assistance with pets, children and pet food offered? Do you know the name of the client before they come in the door?
Customer feedback should be solicited regularly and acted upon promptly. Customer complaints should be dealt with in the same manner. I recommend written protocols for both. Great customer service is no accident; It is carefully planned, practiced and executed every step of the way.
It is well-known that likeable service providers are less apt to have a lawsuit or complaint lodged against them. Likeability can be hired for, trained upon and delivered in a consistent manner. The cost of lost business due to poorly trained, indifferent employees interacting with clients is inestimably high. A healthy practice will have a well-defined plan for dealing with their most precious commodity - their clients.
Marketing
External marketing to potential clients is costly, marginally effective and tightly controlled. Internal marketing to existing clients on the other hand is inexpensive and can be immensely successful. Some checkup questions include the following:
Are the reminders up-to-date? Amazingly they are not always current, even when the owner believes they are. There should be a system for phonebacks and recalls. Are there wellness, puppy/kitten, senior programs and packages for which all staff trained? You should know your active client numbers and whether they are going up or down. Do you know how long the average client stays with your practice?
Regarding compliance, do you know the percentage of your clients that are compliant with your recommendations on .... Regular exams? Parasite control? Vaccines? Wellness testing? Dentistry? Nutrition? Do all the veterinarians in the practice agree to deliver these programs or is there "medical anarchy"? Veterinarians generally underestimate their compliance to an astonishing degree. To generate a high level of compliance an effective internal marketing programs must be defined, understood by all staff, trained on and delivered in a professional fashion.
Facility
The condition of your facility along with its atmosphere tells much about your practice's health. Does appear modern, tastefully decorated and freshly painted? There should be a pleasant ambiance with no or little odour. An effective floor plan will be conducive to high productivity and smooth traffic flow. Staff uniforms should appear professional and even match the decor. The utilities and equipment must in good working order and receive regular maintenance, while the parking lot and washrooms need to be tidy, with a regular cleaning protocol.
Failure to attend to these details is not missed by clients. Conscious and subconscious opinions formed about the quality of care offered are directly proportional to the attractiveness of a facility.
We all know the importance of regular physical checkups and wellness assessments for ourselves. We strive to get our clients to bring our patients in on a regular basis for examination. Why is it that so few of us assess the health of our practices? One should strive to obtain the answers to many of the above-stated questions, along with others and compare them to benchmarks. If you are doing well, fantastic! If not, or if you are unable to glean this information out of your practice, you should consider a consultant. For many, the practice is a cornerstone to one's retirement plan. Successful, well-managed practices have much higher valuations and sell for more. Do yourself a favour and give your practice a checkup- it may be the best investment you ever make.
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