Fee guide Flashcards
fee guide is made by who?
OVMA
- The fees in this publication were prepared for the Ontario Veterinary Medical Association in partnership with the Canadian Veterinary Medical Association to provide, to whom it may concern, a list of fees considered fair and just. These fees are only to serve as a guide. They are not intended to be binding on any party. No person is under any obligation to follow the fees published herein. If any person should choose not to follow these fees, he/she will not suffer in his/her relations with the Ontario Veterinary Medical Association or the Canadian Veterinary Medical Association, members, or affiliates of the Ontario Veterinary Medical Association or Canadian Veterinary Medical Association.
is fixing veterinary fees ok? what should veterinarians not use the fee guide for?
Members of the profession must remember that conspiring to fix fees is a serious matter which could result in a breach of the Federal Competition Act. Simply stated, Ontario veterinarians should not cooperate or agree amongst themselves to use the Fee Guide to influence upwards fees for veterinary services. The use of the Fee Guide by any veterinarian is a matter of individual choice.
how fee guide fees are calculated
Procedure Time and Frequency Studies
◦ How many exams per year
◦ How long does an exam take
Practice Financial Statements
◦ How much does it cost to run a veterinary hospital
Professional Level Incomes
◦ How much “should” a veterinarian earn
Client Attitudes Toward Fees
◦ Perceived value of procedure
projected inflationary increases in expenses for 2022
- DVM wages +15%
- non-DVM wages +12%
- medication / lab +9%
- occupancy +6%
- administrative +6%
<><> - overall change +10%
companion animal hospital expense category proportions
- medications, lab, and supplies 34%
- DVM wages and benefits 27%
- non-DVM wages and benefits 23%
- rent / occupancy 11%
- administrative 5%
based on costs increasing ~10% in 2022, what does this mean for the practice?
You must raise your fees at least 10% to cover expenses in 2022… and 2023
If you have raised your fees less than 10%
> Raise them again
how do small changes in revenue affect net income, if expenses are constant?
small increases yield big results
<><> eg.
Gross Revenue 500
Expenses 350
Net Income 150
> Increase fees 10%
New Gross 550 > 10% change
Expenses (same) 350
New Net Income 200 > 33% change
small decrease in fees with fixed expenses affects new income how?
small decrease requires too many clients
<><> eg.
Gross Revenue 500
Expenses 350
Net Income 150
> Decrease fees 10%
New Gross 450 > 10% change
Expenses (same) 350
New Net Income 100 > 33% change
how much would we have to increase production to cover a 10, 15, and 20% decrease in fees?
10% decrease > requires 50% production increase
<><>
15% decrease > requires 100% production increase
<><>
20% decrease > requires 200% production increase
how much could we decrease production if we raise fees 10, 15, or 20%?
10% increase > can have 25% production decrease
<><>
15% increase > can have 33% production decrease
<><>
20% increase > can have 40% production decrease
Three audiences for your fee guide
Clients - easiest
Non-DVM staff
DVMs
<><>
◦ You must have an appropriate message (value proposition) for all audiences
◦ What messages can we give our staff to soften the blow?
pricing tips
- sharp numbers
- threshold pricing
what is a sharp number? how can we use this concept for our pricing?
Sharp number: “a precise or an unrounded number.”
Researchers think we perceive round numbers to be larger than “sharp” numbers even when they’re not.
Clients will think $50 for an recall exam is more expensive than $51.43
what is threshold pricing? how can we use this concept for our fees?
$100 is a conspicuous “threshold”
$100 feels a lot higher than $99
If a procedure costs $93 and fees need to go up 10%, the new price is $102.30.
Given the audience(s), it may be better to hold the fee to $99.30 and make up the $2 somewhere else.
who is affected by threshold prices, for shoppable and non-shoppable fees
Shoppable Fees
◦ Reception Staff
◦ Doctors
◦ Pet Owners
<><>
Non-Shoppable Fees
◦ Doctors
◦ Staff
◦ Pet Owners
