Welcome to Ismypracticehealthy.com. (IMPH)
As we all know, veterinary medicine has undergone many changes over the past few years. The marketplace has become much more competitive, there is an oversupply of veterinarians, and clients are more concerned than ever about the value they receive in their veterinary services. Associate veterinarians are faced with skyrocketing debt due to seemingly unconstrained tuition increases and yet the returning profit margin necessary for practices to pay associates at a rate that covers their debt load is currently not realistic. The need for improved management in veterinary medicine has never been greater.
Thus, the concept of Ismypracticehealthy.com was established. IMPH is intended to provide:
- a simple, yet dynamic community where participants in the veterinary industry can go to engage in a long term discussion about practice management, economics, and other topics relevant to their long term goals of achieving financial security.
- a very simple tool to help practice owners learn how to manage a very small number of high-impact areas of their practice that can have a dramatic impact on improving the profitability and value of a practice.
- the necessary education and support to help practice owners get started and to grow their understanding for effectively managing their practices.
- make these tools available to as many practices as possible to improve the health of the industry.
IMPH places emphasis on managing four (4) high-impact areas of your practice. These areas include total revenue, payroll expense, cost of drugs and medical supplies (cost of professional services), and accounts receivable. If you can successfully optimize each of these areas of your practice, you are well on your way to having an effective, efficient, and profitable practice. Below we discuss briefly why these areas are so important.
Total revenue
Total revenue is the amount of sales for your practice including all sales of services and product in your practice. It is the goal of most businesses to maximize revenues while minimizing costs.
Payroll Expense
Payroll expense includes all wages, salaries, payroll taxes, benefits and other direct costs associated with employing the people in your practice. This is the largest cost in almost all practices, and thus should be a high priority for effective management.
Cost of Drugs and Medical Supplies (Cost of Professional Services)
Cost of drugs and medical supplies is the second largest expense in most practices. It includes cost of inventory, lab expenses, mortuary costs, and any other costs that would typically fall under the general business category called Cost of Goods Sold (COGS).
Accounts Receivable
Accounts Receivable (AR) includes all outstanding funds owed to your practice for products and services sold and for which payment was not captured at the time of service. For IMPH, we will focus upon accounts receivable that have been outstanding for more than 30 days since services were provided. Without a sound AR policy, the practice will suffer in its profitability and cash flow.
So, to begin, participants should do the following:
1. Go to the 'Join' page at www.ismypracticehealthy.com to register on the site.
2. When you're ready, obtain data for each of the 8 categories below for your practice for each month going back as far as possible to January 2012. By doing this, you can see an up-to-date look at the health of your practice over time, because this will allow you to see the real trends in your practice, which is more impactful than a single data point or only a few month’s data.
- Total Revenues
- Cost of drugs and medical supplies
- Veterinary Compensation
- Non-Veterinary Compensation
- Number of FTE Vets
- Number of non-Vets Support Staff
- Accounts Receivable (Over 30 days)
- Number of Transactions
3. Enter your data into the confidential data input page.
4. View your data on the Data Dashboard. You will be the only person who sees your data.
5. Continue to add new data each month to get an up to date look at the health of your practice.
6. Follow the educational updates provided by Drs. Blach and Clark. You can subscribe to receive automatic updates.
7. Submit questions to get input on areas you’d like to learn about. Submit comments and engage in the discussion with your peers on these and other practice management topics.
Again, welcome. We look forward to advancing our collective knowledge about practice management. Only through your participation and dedication can we help individual practices, and thus the industry as a whole.
