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
procedures where thresholds matter
Shoppable Fees
Sample Collection Fees
Elective Technical Procedures
◦ Pedicure
Euthanasia Fees
◦ $99.99 ?????
Exam Fees
Actual cost for the average veterinarian to provide an exam (30 mins)?
- vs what vets actually should charge and why?
Actual cost for the average veterinarian to provide an exam (30 mins)
◦ $176.95
◦ Examination is gateway to other procedures
How much should a 30 minutes exam cost?
◦ 139.30
are exam fees shoppable? how do exam fees relate to revenue?
charging more for an exam fee is not a deterrent
- generally, those with higher exam fees have higher revenues
exam room time and revenue
- revenue goes down with longer exam times, generally (per FTE)
> ie. the more time the vet spends in the exam, the less they earn
what is a typical exam time? what could be better based on the research?
- most are 30 mins, but shorter is ultimately better for revenue…
influence of exam fee on vaccine fee?
R2 = 0.4669 > 46% of the time, the vaccine fee can be explained by the exam fee
??
whats worth more in OVMAs opinion - canine vs feline vaccines
- OVMA says they should be the same
what is a harmonized vaccine fee? how should we decide price?
Charge Everyone the Same Fee
◦ What you lose from one you gain from another
<><>
Use most popular vaccine combination
◦ Exam + core + non-core
◦ or
◦ Exam + core + 3 non-core + canine influenza
◦ Total vaccine revenue / number of vaccine exams
elective surgery fee and revenue relationship? when quoting costs what do we need to keep in mind?
higher fees = more revenue
> don’t have to charge lower fees to get clients in the door
> BUT there is nuance to this - some clinics separate out their fees, but some charge inclusive of IV, pre-anesthesia bloodwork, etc.
> so quotes differ between hospitals based on what is included
> when quoting costs to the client, walk through it with them so they know what is included
spay price vs ‘secret shopper score’
clinics with higher secret shopper score (ie. better customer service) generally had higher spay prices
recommendation for dental pricing
staging
- separate the oral surgery from the prophy
> split the bill
◦ Prophy & Tx plan visit 1 / estimate part A
◦ Oral Sx visit 2 / estimate part B
<><>
split price into components so people don’t think cleaning costs 1800
strategic fee increase strategy
High Value Procedures: aggressive increases
Anything from the Lab
Anesthesia
IV Fluids
X-Ray
◦ Analogue or Digital
<><>
Low Value Procedures: moderate increases
Elective Surgery
Examination
Vaccination
OVMA fee guide goals
Designed to stimulate demand for veterinary medicine
Cover the cost of running a veterinary hospital
Provide a professional level income to DMMs
