The King is dead. Long live the King.
— Traditional proclamation made after the death of one monarch and accession of the new one.
Every business industry has its touchstone numbers to assess and understand its essential inner workings. As I mentioned in
my article "8 veterinary practice financial myths busted" — you can read it in the July 2010 issue or at
http://dvm360.com/8myths — I believe the average client transaction (ACT) has served its purpose. Now is the time for us to move on to the annual
services per patient (ASPP). I hope that showing you what the ASPP is all about and highlighting some of the shortcomings
of the ACT will encourage you to track this useful number.
Short-term vs. long-term
The ACT is akin to the average check at a restaurant. Dairy Queen's ACT is about $5 while an upscale restaurant's ACT comes
in at about $50. The ACT focuses attention on short-term finances. Employers tell associates, "Your ACT is low — get going."
Yet, the ACT fails to address the overall picture of the total and comprehensive healthcare practiced at your hospital.
In addition, short-term incentives tied to ACT create some problems. For example, they tend to encourage associates to throw
everything at a case, even if it may be unnecessary. Every vomiting dog does not need a $300 workup, but some doctors order
one every time. Every skin case does not need a culture and sensitivity testing, but some places include it in their protocols.
Every coughing dog does not need ultrasonography, but some hospitals trot the machine for every case. I've seen $800 worth
of radiographs for a 14-year-old dog that had simple geriatric vestibular syndrome, so I know that it does happen. However,
I tend to see that it happens a little more often when there is ACT pressure.
Instant gratification has become a way of life for many businesses — call it Pavlovian business thinking. It works in restaurants,
but it undermines a long-term healthcare focus. Your ASPP is a long-term assessment. It tells you more about comprehensive
care activities than the ACT does because it looks at all the care given over a year. The ASPP's focus is on total healthcare.
Inverse relationship between the ACT and ASPP
There's an inverse relationship between the ACT and the ASPP. For example, workups for patients with bad yeast infections
in their ears include performing cultures, sensitivity tests and diagnostic tests, all of which increase the ACT. Follow-up
visits drive down the ACT, but push up the ASPP. The same is true for dental work. The initial dental procedure pushes up
the ACT, but rechecks and preventive steps drive it down and increase the ASPP. This pattern continues for eye cases, renal
cases, endocrinology cases, cardiology cases and many others.
Peak-time management — the creation of busier times within the practice for activities — enables a practice to maximize personnel,
improve delegation and increase the overall quality of care. The ACT business model undermines peak-time management because
it emphasizes doing everything in one visit. This emphasis on the short-term financial benefits of the ACT depresses staff
numbers relative to veterinarian numbers. The all-in-one visit mentality directs traffic away from times of peak activity.
The ASPP model enables staff members to triage, create setup appointments, and arrange for patients to return for a day of
diagnostic tests. For example, if a polyuric-polydipsic dog was presented to a clinic for diagnosis and treatment, an algorithm
would be needed to conduct a proper workup. And to perform that workup correctly might require two to four visits. Complex
problems defy an all-in-one visit. A focus on the ASPP shifts attention from the short-term work pattern to the long-term
An emphasis on the ACT and commissioned pay forces many new graduates to stick to the simple wellness stuff for visits to
keep up their ACT. This focus limits the development of expanded skills. And in my mind, we see more burnout of the younger
minds with this aforementioned issue at its core.