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  News from the Maryland Veterinary Medical Association                                                    Fall 2010

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2010 Practice Performance

The following update is from the National Commission on Veterinary Economic Issues (NCVEI). The statistics are from the data collected on the NCVEI's website, www.ncvei.org.

2010 Looks a Little Better

NCVEI asked practices: How Did Your Practice’s Revenue for 2010 Compare to 2009?

  Qtr 1 Qtr 2

•  2010 increased > 5%
•  2010 increased 1 - 5%
•  2010 was essentially flat
•  2010 declined 1 - 5%
•  2010 declined > 5%

26.6 %
28.2 %
12.2 %
20.8 %
12.2%
26.83%
26.02%
12.2%
21.14%
13.82%

 
Over 50% of practices are seeing revenue growth this year with another 12% showing no growth but no decline. (Remember that flat is the new up……) That still leaves about 33-35% of practices struggling with revenue declines.
This month we’re asking about numbers of visits to your practice—go to www.ncvei.org and let us know how your practice is doing.

How Profitable are You?

Results from the NCVEI/VetPartners Profitability Estimator indicate the average practice has a profit margin of 9.76% with the median being slightly higher at 10.23%. To put this into perspective, a practice needs to have a profit margin of 18% or higher to sell at the gold standard of 100% of gross revenue. (Don’t forget that profitability isn’t the only factor impacting value but it is a very significant component.) Here is the breakdown showing the % of practices at each level of profitability:

•   >18% (Superior profit margin)                 12.27%
•   16-18% (Above average profit margin)      10.91%
•   13-15.99% (Average profit margin)           12.73%
•   8-12.99% (Below average profit margin)    25.45%
•   < 8% (Poor profit margin)                        38.64%

If you’re not sure how your practice is doing, take this opportunity to enter your data in the Profitability Estimator and find out. If you don’t like the results, check out the rest of the NCVEI benchmarking tools to help understand why you’re not as profitable as you’d want. Is it because your doctors aren’t as productive as others? Because you don’t have as many new clients? Or something else?

2010 Fee Increases

Deciding how much to raise fees during a tough economic time is a challenge; here is what your colleagues are doing this year:

•   Not raising fees                                           18.1%
•   Lowered fees                                                1.4 %
•   Raised fees on average from 1-4%                45.8 %
•   Raised fees on average from 5-8%                29.2%
•   Raised fees on average from 9-12%                4.2%
•   Raised fees on average greater than 12%        1.4%

 

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© 2010 Maryland Veterinary Medical Association

Annapolis, MD 21403 • (410) 931-3332 • fax (410) 931-2060 • MVMA@KeyAssnMgt.comwww.mdvma.org