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Growing a Practice in a Down Economy

New legislation is reducing the number of commercial breeders/puppy mills and retail pet stores that sell pets, resulting in a decrease in the number of new patients to practices. For example, in Pennsylvania, commercial breeders decreased from 303 to 111 from early 2009 to June, 2010 . A commercial breeder is defined as anyone that has 100 plus breeding dogs. Licenses for commercial breeders in Pennsylvania are issued based on the size of the operation, ranging from 100 breeding dogs to over 500 breeding dogs in one facility. With additional pending legislation across the country this trend of closures will continue to grow, negatively impacting the entire pet industry. While the closure of commercial breeders/puppy mills is desirable from a humane perspective, this creates a new challenge and opportunity for industry. To see what just one state can represent to the industry, consider the math. In Pennsylvania alone, 192 commercial breeders were closed down by the state, voluntarily closed or moved out of state. If each location housed an average of 250 breeding dogs there is a reduction of 48,000 breeding dogs; 192CB X 250BD =48,000BD. If each dog has 2 litter’s per year and averages only 2 living births per litter, there are 192,000 fewer new puppies entering the industry each year from Pennsylvania alone!

In addition to fewer young patients entering the practice, data also reveals the numbers of visits per client are decreasing as are the dollars spent per visit . In addition, The Veterinary Hospital Managers Association (VHMA) released its 2009 Practice Diagnostic Report, stating that “While client visits and client transactions were down (7 percent fewer visits per client, 4 percent less per transaction, 6 percent less revenue per client), the number of clients seen by doctors decreased by 18 percent. That translates to more clients spending less money”. “The average revenue per transaction was down 4%, yet expenses were up 9%, representing a 4% drop in net income to practices.”
Although some say the numbers of pets being euthanized is down, there are still between 3.5 and 5 million pets euthanized annually. More pets are euthanized due to behavior disorders than neoplastic, metabolic and infectious diseases combined !

The average value of a patient is another key indicator of recent trends. In the beginning of 2009 The American Animal Hospital Association’s PulsePoint 5th Edition stated a patient was worth $588 annually. At the end of 2009 the Veterinary Hospital Managers Association VHMA - 2009 Practice Diagnostic Report stated that the annual patient value was $440. That represents a drop of $148 per patient. When you calculate the lost revenue from Pennsylvania closings …192,000 puppies, times the value per patient of $440 annually, the lost revenue each year is $84,480,000! These numbers and the real impact that they have on the estimated 24,000 exclusive small animal practices in the U.S. create an urgent need to answer the question: What can a practice do to address these trends and continue to grow in this difficult economic environment?

Research has shown that when the human animal bond is strong, clients are willing to visit the practice more frequently and will spend more per visit . The question, then, is how can the practice help to strengthen the human animal bond? Behavior problems are the primary contributor to the fracture of the human animal bond. How can the practice prevent this fracture? With the number of young pets decreasing, retention and increasing the value of each patient is paramount. The significance of strengthening the human animal bond by implementing a behavior wellness program to attract, retain and increase the value of clients is clear.

Behavior wellness reduces the probability of clients surrendering their pets to shelters and leaving the practice. The Mega Study showed that 72% of clients will ask their veterinarian about behavior issues. Unfortunately by the time a client asks for help with a pet’s behavior the pet is five to seven months old. This number ties into the data that Dr Snyder quoted of 38% of pets lose their homes within the first 90 days with their new families . Normal behavior challenges that could have easily been addressed when the pet was younger have escalated to behavior problems which take a bit longer and more experience to address. The number one reason for canine relinquishment is behavior and the majority of relinquished dogs have been with a family for less than one year! When a client gives up a pet due to behavior, the potential lifetime of income from that pet is lost forever.

In recent years there has been a growing interest in behavior, however integrating behavior into practices has been challenging. Much of this frustration is due to the approach taken toward behavior- emphasizing problem resolution (or treatment of behavior problems) rather than focusing on the prevention or wellness aspect of behavior. Integrating a wellness behavior program into the practice can increase retention and be profitable. Most practices will agree behavior problems are an issue that should be addressed, but there are many concerns surrounding behavior and how exactly to help clients.

The most frequent questions that many practices face when they are willing to implement some level of behavior help to their clients are: who will develop the program, how much time will it take, where will we find the time to offer the new service, how much will it cost and where and when will we deliver this new service?

A practice may choose to embrace behavior wellness programs step-by-step, building on their program’s successes (White, 2009 ). Practices can begin simply and add additional levels of service as their behavior wellness programs mature.

Level one basic behavior wellness program opens communication with the use of simple behavior questionnaires. When preparing the questionnaire, it is important to identify eight to ten of the most common behavior challenges that puppies and kittens face. Examples of these may include housetraining, scratching, biting, etc. Once the behavior challenges have been identified, the practice needs to have on hand resources that can address these challenges and provide guidance to clients to resolve them. A basic program should be practiced and made a part of the SOPs of the practice before moving forward to an intermediate behavior wellness program.

An intermediate behavior wellness program identifies additional efficiencies by reducing redundancies and freeing veterinary time to see more patients. To accomplish this, the practice needs to identify repetitive information now given to clients by veterinarians during first visits. How much of this information could be offered to clients by current team members in group settings for a fee? The practice can identify team members with an interest in behavior to take on a new role of Patient Behavior Advocate. The Patient Behavior Advocate(s) will lead group orientation sessions and begin training for one on one behavior session in an advanced program.

An advanced behavior wellness program offers Patient Behavior Sessions with one-on-one help for clients. The Patient Behavior Advocate will conduct these sessions under veterinary supervision. This level of personal service trains clients how to address their pet’s behavior challenges. Fees can be structured as a one-off purchase or can be purchased in packages of sessions.
As another option, practices may consider practice-directed outsourcing of behavior wellness. This may be accomplished by utilizing a trusted trainer who uses only reward-based training. Puppysmarts.com now offers practices an opportunity to outsource behavior wellness with information approved by DVMs that are board certified in behavior (DACVBs).

Developing a wellness behavior program allows a practice to take a team approach to incorporating behavior into the practice’s overall wellness plans. Practices can turn a profit in an otherwise challenging economy by implementing behavior wellness programs. With behavior wellness programs in the practice, the human animal bond is strengthened early, before it is threatened and becomes fractured. The bond between the client and the practice is strengthened and the practice will attract new patients, retain a higher number of existing patients, improve client compliance, and increase practice revenue. An additional benefit of implementing behavior wellness programs is well-mannered patients that are easier to work with, making everyone’s job easier and less stressful!

Linda M White is an author, speaker, consultant, and animal trainer with over 25 years of experience working with veterinarians and their patients. Her work combines practice management with behavior. Her book; First Steps with Puppies and Kittens was published by AAHA Press in 2009. White can be reached at lindaw@lindawhiteandcompany.com.

i Pet Age Magazine, August 2010

ii April, 2010 Veterinary Economics article on Lower transactions put squeeze on 2009 income as stated in DVM360

iii K.L. Overall Evaluation and Management of Behavior Conditions - Clinical Neurology in Small Animals – Localization, Diagnosis and Treatment. Braund K.G. (Ed.) International Veterinary Information Service, Ithaca NY (www.ivis.org), 2001, Accessed June 2005

iv  Special Report JAVMA, Vol. 232, No. 4, February 15, 2008
The Current and Future Market for Veterinarians and Veterinary Medical Services in the United States
Executive Summary, May, 1999
John P. Brown, PhD, and Jon D. Silverman, PhD
KPMG LLP Economic Consulting Services

v. 38% of Pets Nationally - Never Return for a Second Visit!
Veterinary Productivity - Dr. Gerry M. Snyder AA, BSc, VDM

vi  Behavioral Reasons for Relinquishment of Dogs and Cats to 12 shelters
Mo D. Salman, Jennifer Hutchinson, Rebecca Ruch-Gallie, Lori Kogan, John C. New, Jr., Phillip H. Kass, Janet M. Scarlett, Journal of Applied Animal Welfare Science, 3 (2), 93-106 Copyright 2000, Lawerence Erlbaum Associates, Inc.

vii First Steps with Puppies and Kittens – A Practice Team Approach to Behavior Linda M. White, AAHA Press, 2009

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