Compassion is a core part of the veterinary business. Doctors feel compassion towards the pets they care for and their owners. They understand that very real bond that occurs in pet families.
However, it becomes difficult when families are torn between finances and the love of their pets. Given the rising cost of veterinary care, many families simply can’t afford expensive procedures. They are forced to decide between giving their pets away to a shelter, letting them suffer, or putting them to sleep.
As a vet, it can be tempting to give clients in difficult financial situations free or heavily discounted care. After all, no one wants to lose a pet due to financial issues. But at what cost? If your facility goes out of business because you’re giving your services away, you won’t do anyone any good.
Payment plans offer a solution. They allow clients to spread their payments over time, making them easier to manage- and many don’t charge interest for a limited time. Learn how to include them in your service offerings.
According to the Independent Veterinary Practitioners Association, the price of veterinary services has increased by more than 60% over the last decade.
Here are some factors that contribute to rising costs:
Independent Owner Buyouts: In recent times, private equity firms have been acquiring independently owned veterinary offices. The buyouts put pressure on veterinarians to meet specific production goals and increase prices to do so. As a result, both corporate-owned and independently owned veterinary clinics are feeling the burn. Those under a corporate umbrella are forced to raise prices to meet standards, while independently owned clinics invest to remain competitive.
Higher Lab and Vendor Fees: Vets are also facing higher lab and vendor fees, which have risen by as much as 12% in the last few years.
Advanced Technology: The latest technology in vet care saves lives, but it is also expensive, contributing to overhead costs.
The additional costs are often passed off to customers, with 26% saying they find it difficult to afford pet care.
Why Veterinary Clinics Must Operate Like Businesses
As a veterinary clinic, it may be tempting to operate more like a non-profit than a business, offering your services for free or discounted rates. But without revenue, you can’t provide the high level of service that truly benefits your clients.
For example, typical veterinary costs include:
Staff salaries
Medications
Rent
Equipment
Lab fees
Insurance
Continuing education
Investments in increased specialization and advanced technology
These are necessary expenses, essential to operations. If a clinic falls behind on payment and becomes financially unstable, it can’t invest in training, staff, retention, or new equipment. Revenue is necessary to keep the doors open and maintain high standards.
Common Revenue Streams
To understand how veterinary clinics stay open and continue caring for pets, it helps to learn where their money comes from and how they decide what to charge. Revenue streams aren’t just about profit; they help clinics balance financial survival with affordability for pet owners.
They include the following:
Core Medical Services: These include preventive care such as exams, vaccines, and wellness checks, which provide predictable revenue for clinics.
Emergency Services: For illness, injury, diagnostics, and surgery, which are less predictable but add to income.
Ancillary Services, including dental care, grooming, boarding, physical therapy, and behavioral consultations, can be bundled into packages to attract more customers and offer discounted services.
In-house pharmacy, prescription diets, and retail products can also aid with profitability.
Factors That Impact Revenue Streams
While many clinics base pricing on services offered, they are further impacted by the following factors:
Location: Veterinary clinics in areas with a high cost of living typically charge more for their services to compensate for higher rents and payroll.
Specialization: Specialized services may be more costly than traditional services.
Equipment Costs: High-end equipment can be expensive and may be necessary for more complex needs.
Lab Partnerships: Vets also pay for lab partnerships to help cover the cost of expensive diagnostic equipment, either on a case-by-case or an ongoing basis.
Payment Plans Support Pet Owners Without Undermining Business
There are several ways vets can make care more affordable for their customers, but payment plans are the most straightforward. They work like a credit card, paying the clinic for care right away, and allowing customers to make payments over time. Many of them don’t charge interest, at least for a limited time, so clients can support cash flow without compounding expenses.
However, vets must be careful about the plan they choose. Many clients will ask about payment plans, and if they are not happy with the one you work with, they could go to another clinic. Moreover, the company must offer you convenient services.
Here are some things to look for:
Direct Payments: The company should pay you directly and collect payments from customers.
Specialized Management Platform: These platforms will handle the entire repayment process, including recurring withdrawals, to reduce the administrative burden on your clinic.
Fees and Interest Rates: A plan that charges low or no fees and interest rates will appeal to your clients.
Soft Credit Checks: Hard credit checks are not preferable, but soft credit checks are not damaging to credit, making them customer-friendly. They also remove liability from your clinic in paying off debts.
Define Practice Goals: Choose a plan that aligns with your practice goals, whether they be covering large emergency costs or customized in-house payments for routine or preventative care.
Consider Client Preferences: Clients prefer plans with flexible terms they can tailor to their financial needs.
Transparency: This is a vital trait for both clinics and customers, ensuring straightforward services that reflect your business values.
Other Ways to Support Pet Owners
While payment plans are ideal, they can be combined with other strategies that make care more affordable. Here are some examples:
Emphasize Preventive Care: Vaccines, regular checkups, dental cleanings, and parasite control are just a few examples of services that can prevent small medical issues from becoming bigger ones.
Partnering with Pet Insurance Firms: This involves recommending certain providers to customers and partnering with them to facilitate claims, provide medical records, and accept direct payment. An easy relationship supports a smooth process for customers, making them more likely to purchase and use insurance for pet care needs. Let clients know they can use payment plans in conjunction with insurance to cover out-of-pocket costs.
Discounts: Consider offering discounts to military vets, for referrals, and on certain services. You may also partner with shelters and nonprofits to offer low-cost spay/neuter programs.
Bundle Services: Offer memberships and bundled services, allowing clients to pay less for each service while bringing in more regular income to your clinic.
Telemedicine: Provide telemedicine services for care that can be managed virtually to reduce client costs.
While these strategies can bring in more clients and lower the cost of care, you must also be careful to decide what you can realistically afford. Don’t go overboard and risk solvency.
How Pet Owners Can Do Their Part
Vets can do a lot to make care more manageable for their clients, but pet owners can do their part as well. Consider recommending these strategies to them, whether through a newsletter, email, or poster hanging in your clinic:
Emergency Funds: They may consider putting money aside each week into an emergency fund for unexpected pet healthcare expenses.
Preventative Care: Pet care goes both ways. Encourage owners to bring their pets in for regular shots and checkups.
Pet Insurance: Recommend trusted providers that can help them save money.
Using the Same Clinic: Loyalty is key to profitability, and it can also help clients save money. Explain to them how using the same clinic reduces costs as the team is aware of your pet’s history, reducing the need for extensive testing, and their financial situation, allowing them to tailor care.
Ethical Tensions: Where Money and Medicine Collide
It is difficult for vets to balance compassion and profitability, but even more complex when ethics come into the picture. Here are some ways vets can handle those dilemmas:
Presenting full treatment plans vs. scaled-back options: Vets may mention what’s essential now and what can wait, helping families manage finances.
Euthanasia vs financial constraints: Doctors may recommend ways families can avoid euthanasia, such as rehoming pets with treatable conditions, offering consulting for behavioral issues, and conducting quality of life assessments to help clients see the difference between a manageable condition and a terminal one.
Communicating Boundaries and Compassion: Clinics must learn how to say no to unsafe or unsustainable compromises while remaining empathetic. Clear, non-shaming language is typically the best approach.
Conclusion
Veterinarians often focus on compassion, but they must be financially healthy to provide high-quality, compassionate care. Fortunately, both support for pet owners and profitability can be achieved through honest communication, smart planning, and realistic expectations. Payment plans can guide the way, offering a transparent way to make care more affordable without reducing solvency.
With the right strategies, vets can protect pet health and family budgets, leading to improved relationships and a higher quality of life for our furry friends.