Today's Veterinary Business

OCT 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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49 October/November 2018 • TODAYSVETERINARYBUSINESS.COM counts and client promotions, also can affect associate veterinarians' production-based compensation. Finally, because veterinarians don't earn production or commis- sion income while they are not at the practice, they are motivated not to take time off, whether it be for continuing education, illness or vacation. This essentially makes paid time off a non-benefit. Given growing incidences of compas- sion fatigue and burnout, it seems counterintuitive that we would encourage veterinarians not to take time off. How Can Production-Based Pay Impact Hospital Culture? Often overlooked by clinic owners and management is the negative impact of production-based pay on hospital culture. It is not un- common for veterinarians to create alliances with team members responsible for scheduling ap- pointments so that these doctors are given potentially higher-value patient transactions or booked more heavily. The ramifications are most apparent when the appoint- ment schedule is not fully booked, such as during a recession. Another factor that can create a less collaborative workplace is when doctors taking a day off are hesitant to allow other veterinar- ians to provide follow-up client communication. Because the doctor who saw the case doesn't want to lose follow-up income, she will tell the client to expect results when she returns to the office. The result is subpar client communica- tion and patient management and the reinforcement of the veterinari- an's controlling behaviors. Equally destructive behavior occurs when the doctor commu- nicates with clients on her day off, resulting in a veterinarian who never disconnects out of fear of lost income or loss of case control. Recently, we have seen increasing expectations of hospital owners and managers that veterinarians should provide active case management during time off. These behaviors only serve to increase stress and fuel burnout among staff veterinarians. All these behaviors create schisms in the team and hinder the ability to work together toward a common goal. They create hurt feelings, disillusionment and resentment. The power dynamic creates uncomfortable situations for veterinary team members when they are asked to align with one veterinarian over another. The re- sult is a workplace in which individ- uals feel anxiety, stress and distress. The ability to function as a team is inhibited, job satisfaction decreas- es and turnover increases. The Way It Should Be The antidote for production-based pay is this: a hybrid program of shar- ing profits and growing associates. Rather than incentivizing veter- inarians on their production alone, employ both a collective hospi- tal-based revenue growth compo- nent and a merit-based bonus struc- ture that rewards doctors based on goals that encourage professional and practice development. The benefits to associates are increased personal growth and enhanced workplace engagement. Advantages to the hospital include developing veterinarians who be- come invested in the clinic's success. Financially driven competition falls by the wayside, creating a collabo- rative culture in which the emphasis is on providing the best care to the patient and client, and on growing the practice. Team members no lon- ger are asked to choose sides, which lessens their workplace anxiety. Within this model, veterinar- ians receive a living wage. The opportunity to earn additional income is based on a bonus struc- ture that promotes the productivity and efficiency of the entire team by identifying categories, or buckets, that are defined by the hospital to align with organizational goals. The veterinarians and hospital leader- ship work together to define which goals are in each bucket, individu- alizing these objectives to what will motivate each associate. These goals must be SMART (specific, measurable, achievable, realistic and timely). Feedback on goal attainment will need to be provided at least quarterly throughout the contract year. Ex- amples of buckets and goals are: The Hospital's Financial Performance • Revenue growth based on average historical revenue growth and a reasonable goal for future growth. • Utilization of in-hospital medical supplies in an efficient and cost- effective manner. • Careful use of team resources to minimize overtime costs without hurting patient care. FINANCIAL ($2,000) • Revenue ($1,000): This objective is achieved if the hospital meets or exceeds a reasonable revenue growth goal based on historical revenue growth. • Costs of goods sold ($500): Efficient and cost-effective use of medical supplies is measured through costs of goods sold (COGS) ratios, even though associate veterinarians do not have complete control over managing these costs. This SMART goal is satisfied if the hospital meets or exceeds a reasonable COGS ratio goal that is set based on historical performance. • Support staff salaries and wages ($500): The use of team resources and appropriate task delegation is measured through the ratio of support staff salaries to total revenue. If the hospital meets or exceeds a reasonable expense ratio goal that is based on historical performance, the money is awarded to Dr. A. BUSINESS SKILLS (TWO GOALS SELECTED, $1,000 PER GOAL) • Dr. A will review and discuss the end-of-month financials, including KPIs, profit-center revenues and P&L statements with the practice manager by the 10th of each month. • Dr. A will research the effects of pet health insurance on pa- tients, clients and hospitals. During a staff meeting and before September, Dr. A will present the findings to the team. Dr. A should be able to discuss why or why not the service makes sense for the hospital and answer basic questions. COMMUNIT Y (ONE GOAL SELECTED, $2,000) • Dr. A will present four client-education nights, one on the first Wednesday of March, June, September and December. These 45-minute presentations will be on topics selected by Dr. A as being relevant to clients and are subject to the medical director's approval. Topics are to be submitted by Feb. 1. PROFESSIONAL GROWTH (ONE GOAL, $2,000): • Dr. A has elected to use part of her CE stipend to attend a communication training course. She will attend the course by June 30. • After the course, Dr. A will set communication goals for herself and ask her technicians to evaluate how well she is achieving her goals. A communication goal log should be completed monthly and reviewed quarterly. Examples of these goals could include asking three open-ended questions per appointment, listening reflectively once per appointment and summarizing once per appointment. TEAM DEVELOPMENT (ONE GOAL, $2,000) • Having attended the CE course, Dr. A by Sept. 30 will present a team training session on communication skills. The seminar should last at least 30 minutes and be interactive. Dr. B, a course graduate, can serve as a resource for the interactive exercises. HOW A MERIT-BASED BONUS PLAN CAN WORK XYX Animal Hospital offers a merit-based bonus plan as part of Dr. A's compensation package. Dr. A is eligible to earn a 10 percent bonus ($2,000 per objective for five objectives) based on completion of the following objectives within the contract year starting Jan. 1 and ending Dec. 31. 1 Continued on Page 51

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