NCVEI unveils economic benchmarks

NCVEI unveils economic benchmarks

Feb 01, 2002

Orlando-New business tools will help veterinarians compare specific prices on services for the first time.

The National Commission on Veterinary Economic Issues (NCVEI) unveiled the new Internet-based economic tools at the recently concluded North American Veterinary Conference (NAVC) in mid-January.

Howard Rubin
The ultimate goal, says Howard Rubin, NCVEI's CEO, is to empower veterinarians to increase the value of their practice, and therefore also increase income. NCVEI wants to break down the barrier between practitioners and the business world and create a frame of reference for veterinarians to guide them through problem-solving techniques.

The tools were created to help practices improve financially. According to NCVEI, three driving issues accelerated the creation of these new computerized tools.

  • Veterinarians largely undercharge for services.
  • Debt is an ever-looming problem for recent graduates.
  • The business acumen of many veterinarians is considered, well, lacking.

NCVEI, formed as a result of two commissioned studies by KPMG (financial-based study) and Brakke Management Consulting (behavioral-based study), is the brainchild of the American Veterinary Medical Association, American Animal Hospital Association and the Association of American Veterinary Medical Colleges.

Rubin addressed the commission's latest initiatives at the NAVC forum. More than 150 people attended and at least 40 participated in a hands-on computer laboratory to test NCVEI's new economic tools.

Sizing up practice economics
The benchmarking plan One aspect of NCVEI's 2002 initiative is benchmarking - a "structured approach" to driving change by searching for those practices that lead to superior performance, explains Rubin.

NCVEI is creating an online repository of data by inviting all veterinarians who are members of AVMA or AAHA to contribute financial data and operating results of their respective veterinary practice no matter its type, size or demographics.

The benchmarking plan consists of two tools: how average income for the entire practice compares to other veterinarians in the profession; and gross revenue of the practice.

Initially NCVEI collected seed data for both tools, by surveying more than 2,000 veterinary practices to get baseline data. In this case the first users would see value in coming to the Web site and using the tool.

"The key to the real success is getting thousands of veterinarians to participate. You don't have to come with financial can come with anecdotal data. Just stick your toe in the water and see how much you want to participate," says Rubin.

The tool collects a series of demographic data, as well as the veterinarian's perception of demographic data. If veterinarians are not familiar with the financial terms presented on the site, just click on the unknown word for an instant definition.

All data is saved under a secure user profile. (NCVEI is being audited to ensure privacy.) The only data that will be shown will be in aggregate form based on demographic data.

If you get interrupted while inputting, you can always come back and re-enter data. The plan is to save data over time so a veterinarian will be able to compare themselves from year-to-year. The tool will provide feedback from model users on how an individual practice compares to those throughout the nation and eventually even within the practice's zip code and offer suggestions on how to change to achieve stated goals.

"We've formed a blue-ribbon panel of experts in veterinary practice management as well as veterinarians to provide you with an analysis of the data you've inputted," says Rubin.

The suggestions provided by the experts are not customized per individual but according to a veterinarian's percentile ranking in the nation. If you're in the 85th percentile of "best practices" it won't give you the same feedback as someone in the 15th percentile. A practitioner can then print out a checklist of the information inputted as well as feedback received.

As for the gross revenue benchmark, once a DVM enters the data, it will instantly produce graphs of how he or she compares with practices across the country and ultimately in his or her demographical area.

The tools are available online now. The initial focus is on companion animal data, but future phases will be equine and food animal.

One of the big questions NCVEI receives: Is this legal?

"We're happy to report that what we are proposing to do is no different than what thousands of trade associations are reported to be doing across all industries. We are providing data that will help veterinarians make more effective decisions," Rubin says.

The pricing plan The NCVEI pricing strategy is designed to prevent veterinarians from undervaluing their offerings.

"We know that fees from other medical service providers - MD's and DDS' - are set by third parties, insurance companies or governments. Veterinarians have the free market to blame. We need to help veterinarians become much more analytical in their price setting activities," Rubin says.

The analytical pricing model will provide a basis for setting prices versus the system currently in place - a veterinarian pulls a receptionist aside, has them pretend to be a pet owner and call three practices on three items to find out prices.

The modern NCVEI analytical technique is called forecasting. Veterinarians can enter what they have been charging for the top 20 procedures, including consultations, heartworm and surgery fees. Then NCVEI will provide a graph showing comparisons.