Many practices invest in great equipment with every intention of incorporating the tools into the practice and using them to provide additional services and better patient care. However, often practices not only don’t take full advantage of having that bright and shiny new “toy” in the practice, the new piece of equipment doesn’t pay for itself and bring a proper return on investment.
For example, you financed new in-house laboratory equipment, including a hematology analyzer. To insure you are getting a proper return on that investment, you not only have to price common in-house laboratory services correctly, you also need to be sure you always are using the equipment to offer the best care for your patients. Start looking at the number of CBC’s your practice performs in-house monthly. Next, look at the number of hospitalized patients and anesthesia-related service events you had that month. Do the numbers match up? Every anesthetized patient and every patient ill enough to require hospitalization should at least have been evaluated with a CBC. Similarly, how many senior pets did your practice see last month? Be sure you recommend senior pet laboratory screens to provide appropriate preventive care diagnostics for your patients.
If you invested in an ultrasound machine, be certain you are using it AND charging for the services when you do so. How many times have you performed an ultrasound-guided cystocentesis and failed to include a fee for this service? If you and/or your associates have not become confident using the ultrasound as a diagnostic tool and are just using it occasionally to take a “quick peek” at the abdomen to rule out a lesion such as a hepatic mass and do not charge for the service, the machine is not earning its keep and you aren’t getting a return on your investment. Invest in proper training for your doctors so you can confidently perform diagnostic abdominal ultrasound studies, charge for your expertise and let that investment in this diagnostic modality pay off.
Perhaps you decided offering “cold” laser as a treatment modality was a great idea and bought a unit after hitting the “expo” room at a CE conference. Assume that machine has a five-year useful life and determine how many treatments you will need to perform to pay for the machine over five years and see a 20% return on your investment. Advertise the service, incorporate it into pain management for senior pets and offer packages of treatments to make the unit a tool for improving the quality of life of your patients. Did you finally get that digital x-ray machine? Take a look at Benchmarks 2011: A Study of Well-Managed Practices by Wutchiett Tumblin and Associates and make sure you are pricing your studies in line with the fees charged by well-managed practices.
Don’t invest in a great practice management software platform and just use it as a “glorified” cash register and appointment scheduling system. Often I see practices invest up to $30,000 to upgrade to new practice management software and fail to take full advantage of the vast resources available with the program. Make sure you understand all the tools available to you with the software platform you select. For example, both you and or your managers should understand how to use the system to best manage your inventory and insure you are keeping this all-important variable expense at around 22% of your gross revenue. Learn the reports your software can provide and review them on a monthly basis. These reports usually include revenue numbers, new client numbers and the practice and individual doctor average transaction charges. If the numbers don’t look right, make timely adjustments. Finally, if you want that software to pay for itself, discover the tools available in the system to help you avoid missed charges. If your practice grosses $1.0 million annually and you have a 1% missed charge rate, that new $30,000 practice software can pay for itself in three years. Many software systems have tools for capturing charges for all services you provide. For example, if you invest in the IDEXX Cornerstone system, USE the electronic “whiteboard”. It will upload charges to the client invoice after a service is completed.