What are you worth?
Most veterinary medical graduates care more about the chance to diagnose and treat patients than the size of their paycheck. Still, salaries matter, especially when today's former students are saddled with an educational debt load of $100,000 or more.
Yet the way new graduates view salary is often quite different from practice owners. For owners, it is not about how much money associates need to retire their educational lo ans. From their perspective, salary decisions are a function of practice finances. Medicine and money have to support each other in practice. Trying to find the middle ground between the salaries new graduates want and what a practice owner can afford often causes misunderstanding and frustration on both sides.
Balance sheetHere is a financial reality that practice owners must juggle: Close to 50 cents of every dollar collected in a veterinary hospital goes to staff and doctor compensation.
On the flip side, healthcare services that you and the other doctors provide are the primary source of practice revenue. This revenue needs to cover your salary and benefits and that of the team members who support you. There needs to be enough revenue left to buy supplies, pay the utility bills, cover maintenance and replacement costs, retire practice debt, pay the rent, provide a return on investment and build a reserve fund for emergencies.
Veterinary hospitals have different cost structures, but in general, most practices can afford to pay an associate doctor between 18 percent and 21 percent of the gross production. That means if an associate veterinarian generates $200,000 in annual revenue, the owner can afford to pay that person between $36,000 and $42,000 a year.
American Veterinary Medical Association statistics show 2006 starting salaries range from $45,546 to $55,031, substantially more than what most new associate doctors are worth in terms of the revenue they generate during their first practice year. This means that practice owners end up subsidizing new associates while they gain clinical competency on the job. Put yourself in a practice owner's shoes. How would you feel about hiring a new associate at a premium?
Practice owners offer competitive salaries to attract and keep good doctors. They are willing to take an initial loss on their investment and recognize that an associate's first year amounts to a clinical residency. They know that associates need this time to gain experience and increase their medical mastery. Practice owners count on the fact that their associates will grow and develop and soon be able to generate sufficient revenue to make the numbers work. The sooner that happens, the more relieved they will be.
Bringing in money
What factors impact doctor revenue? The answer depends on three things:
A veterinarian can generate increased revenue by seeing more patients, providing them with comprehensive care and charging appropriately for all services rendered.
Know standards of care
More than 80 percent of patient visits in a companion-animal practice involve wellness care. Therefore, one of the easiest things a new associate can do to get up to speed and increase his or her value to a practice is to take the time to learn what preventive healthcare services the medical team believes is best for patients. Ask what vaccinations the medical team recommends for dogs, cats and other species. What preventive tests (fecals/heartworm tests/senior wellness screens) do they provide? What parasite protection products do they recommend? At what oral health grade do they recommend dental prophies? What body-condition scores trigger medical interventions?
Just taking the time to find out what the standards of care are and following them allows associates to use their exam rooms more productively to benefit their patients and the practice. Providing good preventive care gives associates a way to impact the health of more animals than anything else they do, and it is an area that allows most new veterinarians to shine.
Karyn Gavzer, MBA, CVPM, is a veterinary business consultant and nationally known writer and speaker. She is a certified veterinary practice manager, an adjunct instructor for the American Animal Hospital Association and a founding member of the Association of Veterinary Practice Management Consultants and Advisors. She can be reached at