In veterinary practice management literature, oftentimes all practices get lumped together. But when we look just at small-animal
practices, we can identify 20 types. These various niche practices have different income analyses, expense analyses and ASPPs,
but the ACTs are similar.
Within these 20 types of practices, the ACT assumes that apples are oranges. The ASPP, however, focuses on comprehensive care
within these practices to identify apples as apples and oranges as oranges.
The importance of this concept is the capitalization costs for each niche practice. An illustration of capitalization costs
can be found when comparing Subway, McDonald's and an upscale restaurant. The equipment and furnishings for these restaurants
are very different, and the capital investment for each is appropriate for the food services to be provided. It would not
make sense for a Subway to be equipped like a McDonald's or for a McDonald's to have the setup of an upscale restaurant. The
same goes for veterinary practices.
Let's create three veterinary niche practices: 1) an entry-level wellness practice, 2) an AAHA+ABVP practice and 3) a surgical
specialty practice. As an introduction to the actual numbers, the ASPP for these practices will be $200, $500 and $1,000,
respectively, and each practice will have 2,000 patients. The equipment needs of these three practices are quite different.
Yet we see the wellness practice putting in the AAHA+ABVP equipment package, and the AAHA+ABVP practice going toward the surgical
specialty practice equipment package. When looking at the practices' different ASPPs, we can quickly see how the gross revenue
numbers for each of these practices are going to affect the entire cost structure.
Getting started with ASPP
Your practice will have a unique ASPP based on your niche, personality and interests.
To determine your ASPP, count the total pets you've seen in the past 12 months. Take this number and divide it into the total
gross veterinary revenue, specifically removing boarding, grooming and over-the-counter sales. That's your ASPP.
Now track your ASPP backwards for three years, and then create a spreadsheet and begin tracking it monthly (tracking patients
seen per month rather than per year). For all practices, the ASPP needs to be going up monthly and annually.
To help increase your ASPP, remember that 80 percent of your revenue comes from 20 percent of your clients. Pull a sampling
of files on this 20 percent, and review them for compliance and, more specifically and importantly, for undiagnosed and occult
The onion rule can help increase your ASPP. How does it work? We all have clients that want only the legally required rabies
vaccine. With client education and without undue pressure, we can introduce additional preventive steps, adding a layer to
the client onion each time. When dental care is introduced, a layer is added to the onion. As life progresses, each new patient
service is an onion layer. Then when the geriatric years come along, the onion — which you have been patiently layering into
an onion of wonderful healthcare — lends credibility when you suggest diagnostic tests to search for occult geriatric internal
medicine issues. Although the onion rule concept drives up your ASPP, it will only minimally increase your ACT.
Next month, Part II: How to increase your ASPP.
Dr. Riegger, dipl. ABVP, is the chief medical officer at Northwest Animal Clinic Hospital and Specialty Practice in Albuquerque, N.M. Contact him by
telephone or fax (505) 898-0407, Riegger@aol.com
, or northwestanimalclinic.com.
Find him on AVMA's NOAH as the practice management moderator. You can order his books — Management for Results and More Management for Results — by calling (505) 898-1491.
For a complete list of articles by Dr. Riegger, visit