Stop monkeying around with your practice fees

Use demographics and a little easy math to determine a profitable fee schedule
Oct 01, 2010

In the one-act play Words, Words, Words by David Ives, three monkeys named Milton, Swift and Kafka have been confined to a cage by Dr. Rosenbaum—not a veterinarian—who has this hypothesis: "Three monkeys hitting keys at random on typewriters for an infinite amount of time will almost surely produce Hamlet." Tragically, this play reminds me of the 35,000 U.S. veterinarians who play a daily guessing game called composing a fee schedule.

Randomly hitting keys

There is a never-ending supply of permutations by which our colleagues determine fees. The most popular is also usually the least financially successful: Just take the fees of another hospital and adopt them as your own. Generally, these copied fees originated with the hospital's predecessor decades ago and the logic used to create them is lost in the sands of time. Fees that are client sensitive are left to molder, and others have skyrocketed to unjustifiable levels.

Another method of determining fees is to use the American Animal Hospital Association's Veterinary Fee Reference. Here you can find what veterinarians charged yesterday; by the time the reference is published, it's out of date. The other problem is that it's an amalgam of fees, averaging Alaska fees with Alabama fees and the affluent municipalities with those at or near the poverty level, with no basis for positioning your location.

Similarly, the veterinary insurance companies can provide you with a list of fees at the 90 percentile of national allowances. Again there is no localization, but some, like Veterinary Pet Insurance (VPI), have minimum, average and higher-cost plans you can compare. For example, San Francisco veterinarians would want to use the fees in VPI's Superior plan, while those in Kentucky might use the Standard plan.