Disaster at the Veterinary Culture Club

July 29th, 2010

Safe to say it has been a bad month for the two big ‘corporates’ in our UK vet jungle, CVS UK LTD and Medivet.

The CVS share price has been smashed to pieces (though this may be a harsh, market led reflection of performance looking at the interim results.) And Medivet’s reputation is in absolute tatters following the damaging Panorama expose.

Is this the end for national veterinary groups? Or is it just a blip on the way to the total corporatisation of the industry? Have these two things affected your daily work or got you thinking about your own business?

I hope the answer is yes, because one of the advantages of moving back and working on your vet practice rather than just in it (or as I say, stepping off The Hamster Wheel) is being more aware of things that are happening outside of your own business that may affect it.

Leadership in Practice
poor leadershipThe thing that immediately came to mind following the Panorama program was the apparent lack of leadership on display.

We often hear people talk about how important it is to provide strong leadership. However, the discussion threads on vet forums like Vetpol.co.uk demonstrate it is a difficult quality to define, let alone deliver.

That may be the reason why leadership is often present by abdication, rather than intention, in veterinary owned and run practices. After all, we vets are not selected on the basis of our extroverted leadership traits, rather our more introverted, intellectual or investigative scientific instincts.

Which makes it all the more gob-smacking that in a corporate organisation, with the financial muscle to find and hire strong leaders, there seemed to be such a deficit.

Whatever the outcome from this most unfortunate TV expose, it should be clear to all owners and managers that leadership and culture are essential ingredients in the makeup of a successful vet practice.

Comeuppance
I am certain that many are gleefully rubbing their hands together at seeing a corporate (especially a London based one) ‘get their comeuppance’.

But this is short sighted for two reasons. Firstly, not every vet and nurse in Medivet is a “bad egg”, the majority will be perfectly competent individuals. Secondly, these revelations potentially damage us all.

Just as some feel unsurprised this happened to Medivet, I think it would be dangerous to make the link between the problems documented and the fact they are corporatised practice. The problems witnessed would seem to stem from leadership and culture, not organisational size or structure.

Hearing stories from locums (nurse and vets) both in the UK and here in Australia, it is likely that some small, privately held practices would fare little better under such scrutiny. Leadership and Culture are issues that transcend organisational size.

Building Culture Through Leadership
Moving forward, whatever the outcome for Medivet, we have an excellent lesson in why it is so important to work on your business, not just in it.

There is a problem when you are stuck scurrying round your Hamster Wheel, focussed narrowly on the technical aspect of your job. Your perception is that you have no time (and therefore little concern) for trifling matters like culture.

But beware this mistake, because as we have seen, culture will develop in your practice regardless of your input. And since culture defines “how we doing things round here” it has a massive impact on how staff behave in your practice.

Good leaders use their vision to create and mould a culture that works best for their patients, clients and staff. (Not forgetting that it is OK to make a profit at the end of the day as well!)

Each practice, no matter how big or small, needs leadership from the top in the form of a vision for the business and a way of doing things. This information then flows out and down to the periphery of the organisation in the form of culture and values – driven by your management team (again strong leaders who buy into your vision are required).

So let’s hope lessons can be learned as we put July behind us and move collectively forward to maintain our uniquely privileged position as ‘trusted service providers’. Or as I like to put it – as ‘Veterinary Surgeons’.

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Defusing Your Practice Debt Bomb – Part 2

July 15th, 2010

it's gonna blow!Last week we looked at tactics you should use to prevent debt, but many of you will have existing debt to deal with right now. So what tactics should you employ to chew through your debt before it eats you? Read on…

Break your debt down into four subgroups depending on two characteristics.

1. Is it insurance debt?

2. Is it aged debt?

If you do then use a grid like this one to categorise the debt. Though I’ve colour coded them according to difficulty to recover (red is hardest, green is easiest).

Where you begin to attack the debt depends on which subgroup is the greatest. So you also need to undertake some analysis to find out where your biggest problem is. Assess each debt and place it into a subgroup.

debt management ansov matrix
That done, you’re ready to begin. Now don’t do what most people do and pick off the easiest first. Do what’s called “Eating the Frog”. In other words, choose the biggest, ugliest debt you think you can recover and start there. Immediately! (To learn more about eating frogs I definitely recommend reading this short but very inspiring book.)

Uninsured Aged Debt

Uninsured debt is the bane of business. Your strategy must be direct. I recommend the following:

1. Call to discuss the debt and make arrangements to pay, preferably over the phone with a credit card. Agree a date and time by which payment must be met, no longer than 7 days. Record this.

2. If this is not met then call again. Discuss debt and find out why it wasn’t paid. Agree a second deadline but again no more than 7 days and personally I’d say by close of business on the day of the second call.

3. Send a threat letter. This is polite but direct letter requesting payment (with options) be made within 7 days or legal action will be taken.

4. Decision time. Depending on the size of debt you may want to take things further or you may feel it isn’t worth the hassle.

5. If you want to take action then consider the following services (UK):

a) Small claims court online (debts less than $100,000) https://www.moneyclaim.gov.uk/web/mcol/welcome

b) Engage a debt collector – but beware, many will not do more than what I have already described for their cash. And claims that go to court may involve further costs. Plus you should choose carefully as a heavy-handed approach may damage your reputation.

6. If you decide against action, then write it off and move on. Focus on helping good clients than wasting more and more time on the bad.

If handled professionally, at each step in this process you will find clients paying down debt. But be prepared to exercise judgment, there is a difference between ‘can’t pay’ and ‘won’t pay’. Plus, some will withhold payment due to unresolved complaints, and this perhaps is an opportunity to repair damaged relationships.

Uninsured New Debt

Why I this still happening? No point reducing the old debts if all you’re doing is gaining new ones. Go back and read part one to stop this debt collecting. But don’t leave it to age. Implement the same procedure as above and recover it quickly.

Insured Aged Debt

More and more we see insurance firms dragging their heels with payment, sending claims to loss adjusters and fobbing practices off with excuses and delays. (Read my pet insurance post to learn why.) This is bad form. My advice is to choose a better insurance company to work with. There are two practical steps you can take to attack this debt.

1. Hassle factor – get on the phone. Call every day if necessary to seek explanation for the delay. If there’s no problem then where’s payment? Expect better service and if you aren’t getting it then look elsewhere for an insurer. There are new options available.

2. Look in the mirror. Is the problem internal? Is the company waiting for supporting documentation from your practice or a previous practice?  Has a vet not signed the right section of the form? Is the form still sitting in an insurance tray?  Get on it – NOW!

This type of debt can be taken for granted as it is assumed it will be paid. But if it is taking 90 days to collect then you have a cash flow problem that could lead you drag you into difficulties

Insured New Debt

This subgroup is the least problematic of all. But monitor it closely, and try not to have too much going through the books. Better for you if a client pays, then claims back from the insurer. Is your team offering direct claims by default? Is that the policy? Is it a good policy? The answer to the last question may be yes, but your assistants shouldn’t decide on policy by default.

Analysis, Delegation & Blacklisting Clients

The key to good debt management is careful analysis. The cumulative debt figure can be misleading so do break it down into smaller, meaningful chunks.

This can take time. But it doesn’t take a veterinary degree…(see where I’m going with this?) So it represents an excellent opportunity for delegation of a very important task. Who in your practice has a head for figures and is good with clients on the phone?

Handing over this task means that your business improves its cash position, you have more time to work as a vet and someone in your team gets to develop her skill set. Which part of that is bad?

And now a word on blacklisting clients. Personally I’d make sure you have a list or a note on your computer system that means all staff can easily identify when a bad debtor enters the practice. If you retain them as a client, then I’d strongly recommend you take money upfront. If they have none then you are not obliged to treat their pet (save the basics of emergency care).

The idea of a name and shame notice board up in reception strikes me as a serious PR own goal and quite possibly illegal. Annoying as debtors are, better to focus on preventing them, than wasting time and effort with a childish/unprofessional display of frustration.

Dave’s Tuppence-worth

I’ve tried to give you some advice on how to manage your debt list. How you implement your own debt management plan is up to you.  Your own approach will no doubt be influenced by factors like your level of compassion and your business needs.

Just don’t forget, a business needs one thing more than any other – cash.  Good debt management will see that your business never runs dry of this most valuable of assets.

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Defusing Your Practice Debt Bomb – Part 1

July 8th, 2010

mischevious debt bombIn the past year the UK has seen unemployment rise and wages fall. What this means for your practice is that clients may not be in as strong a position to pay or they may not be in as much of a hurry to pay.

Also, don’t forget the psychological impact that the recession may be having on your front line staff who (even at the best of times) can struggle to feel justified in charging a ‘reasonable’ fee.

In this week’s blog, we look at steps you can take to reduce practice debt and keep your cash flow healthy. The old medical adage that ‘prevention is better than cure’, certainly applies here.

Give Clients Accurate Estimates

Implement and enforce an estimates policy. By giving out written estimates, you are forcing a client to face up to the financial reality of a procedure before they commit to it. This also gives you a significant advantage should things get ugly later.

Take A Deposit Upfront

This seems to upset vets when I recommend it. But think about it, what other business that has a large bill at the end doesn’t take a deposit? Hotels? Builders? Travel agents? Don’t forget all online payments are made upfront these days so people are used to paying in advance.

I guarantee you that the only people who will object (other than your team members initially – but they’ll get over it), are the ones who weren’t going to pay anyway. So you’ve lost nothing.

Time Management

Having your vets frantically typing up a bill, minutes before the client arrives for their appointment means at best they’ll make costly mistakes. At worst, if the bill isn’t ready, they might just let the client leave without paying. Discipline and team training are essential. Can someone else do the billing? Should your busiest vets be delegating work out to quieter colleagues to help with time pressures?

Make Payment A Cultural Norm

Adopt a practice wide culture of payment at the time of treatment. Don’t just have the terms and conditions stuck invisibly to the wall. Share the information that cash flow is king. Build it into your training programs. Also, I’d advise against having a salary structure that rewards turnover alone. It has to reward profit or penalise debt to change behaviour.

Monitor the Debt

Make sure you monitor the debt like your nurses monitor an anesthetic. OK perhaps checking every few minutes might be a bit paranoid, but at least check it monthly. Things can get out of shape quickly and the bigger your practice the quicker this can happen.

Dave’s Tuppence-worth

Cultural changes can take time to settle in but if you clearly explain the reasons for change and share a little information about why you need to address problems then there will be few who can reasonably argue back.

If this has been useful to you then good luck with making some changes. If you’ve got any other tips to add then pipe-up and drop me a comment.

Next week we’ll look at what to do if you already have a debt bomb ticking – before it blows up the business.

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Double Bay Vet Clinic Launches Social Media Site

July 1st, 2010

Today marked an historic day, the publication of my third generation vet website. A site that I hope will allow vets to benefit from the astonishing and rapid development of social media, arguably the most important communications advance in history.

Readers may not be aware, but this blogger has been researching and managing websites for over a decade. In fact if you have a website built by one of the largest mainstream vet website providers then you’ve probably been benefiting indirectly from my consulting input for years.

In the early days (1998-2002) the web was seen as something weird and techy for most vets. As a conservative profession, we failed to see the potential business benefits of being online. But a brave few did venture into cyberspace, which was largely a trip into indulgent ego land. But at least they were playing with a new idea.

Vetsite One – Promotional

Version one then was about turning the clinical and sales language around and learning to give useful, understandable information that clients found engaging and useful. It was about ‘stickiness’ and ‘eyeballs’ or, put another way, getting clients to come back for more.

We took things a step further and introduced email collection forms and an email newsletter. And it worked! New clients began to register with the practice and seemed happy to give out an email address. Though it was hard to measure an impact on the business the general feeling was that the site was a worthwhile investment.

Vetsite Two – Supporting

Parkvets.com 2008Three years down the line, version two was slicker but simpler. Better structured, this site was all about supporting the crucial roles of the business. From generating new clients, to handling feedback it complimented the core objectives. We even added ecommerce. This time we hired a designer to bring the plans to life. The advent of new technology allowed better monitoring of performance, so we could measure the impact and demonstrate a return on the investment. X new clients per month. Y additional product sales through the ecommerce site.

Vetsite Three – Being Connected

Double Bay Vet Clinic June 2010So what’s new? Two words – Social Media. (Yes they do deserve to be capitalised.) There are some out there who still doubt that the Internet is even useful to vets. They will either change that opinion or stop work soon (either through retirement or lack of business).

Most accept that the Internet is a normal part of life. Few, however, have yet noticed that the rules have changed again. But if you choose to investigate you’ll find that they’ve changed for the good.

How Social Media is Changing the Rules

Think about this. When could a practice ever have afforded to make its own videos? (Let alone broadcast them to the world for free.) When would it have taken ten minutes to send out a traceable newsletter to your clients without involving the mass printing and stuffing of envelopes? When was it possible at the click of one button to potentially engage millions of pet owners with images, sounds, videos – all for free?

The answer is never. The ability to connect with millions of people at zero cost has always been the promise of the Internet. Social media is simply the set of tools that has finally unlocked this power. It may be a source of irritation to find nurses and vets (even on occasions yourself) distracted by sites like Facebook. But what these huge networks of people are doing is talking with friends and colleagues about things that affect them.

They’re talking about holidays and eating out. They’re talking about pubs, clubs and sports events. They’re sharing clinical info. They’re collaborating, planning, building, even destroying…..all with the minimum effort taken to log on. And your vet business isn’t immune. Treat staff badly, it’ll be on Facebook. Treat your clients and pets well and they might just Tweet about it.

Like it or not, people are talking and if you want to have your say then you need to learn about social media.

Dave’s Tuppence-worth

Having a Facebook page or twitter account won’t make your practice cool or hip or better any at fixing pets. But it will help you engage with and deepen relationships with new and existing clients. In other words it will help bond your clients – more effectively in my opinion than any promotional or cost based gimmicks you attempt. Humans are programmed to seek out and interact with each other. Social media allows this without travel or expense.

The Double Bay Vet Clinic website is more than just our e-brochure, it’s our cyber handshake. It’s our Google pumping, client-engaging relationship machine. I’ll keep you posted. But in the meantime why not sign up as a friend either of Double Bay Vet Clinic (to get tips) or follow me (@dave_nicol) on twitter.

Learn More…

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Emergency Budget 2010: Slaying the UK Debt Monster

June 22nd, 2010

Sharp budget cuts are comingAt the start of the year, I wrote an article predicting that 2010 would see the end of the era of credit. So here it comes, our big bang moment of the year. Today, the new UK coalition government will begin the arduous task of attempting to reign in the biggest debt monster in our fiscal history.

The ‘recession’ we’ve experienced so far, I suspect, will be nothing compared to what comes next. Tomorrow the tide of credit we’ve been drowning in finally goes out. And when it does we’ll really see who’s been trying to swim with no trunks on.

Inappropriate Optimism?

Make no mistake, this has to happen and it will be painful. But at least there are two reasons to be comparatively optimistic.

1. We’re doing this of our own volition. However painful George Osborne’s budget is, it will be less punitive than if we simply kept on racking up our debt. According to Nick Clegg, we (the UK government) are currently paying £80,000 of interest a minute.

2. The presence of the Lib-Dems within the government perhaps ensures some degree of balance to the cuts that have to be made.  (I may be in business but I strongly believe in social justice.)

By choosing to step off the debt train now and bring some order to public finances we will hopefully avoid falling off the cliff as Greece has done and the US threatens to do. We maintain the ability to control our own destiny, rather than, in effect be dictated what to do by our creditors and risk even deeper cuts and the social unrest seen in other countries.

Phoney Growth

Recent figures that put the UK in growth are perilously propped up by government spending, or put another way – it is phoney growth.

Today that stops. Today reality bites and in all likelihood people will lose jobs. Potentially lots of people will be leaving the public sector and looking for private sector employment.

Implications for Vet Practice

If your practice exists in an area dependent on these jobs then this is going to hurt. If your practice exists elsewhere then at least the spectre of interest rate rises looks less likely (as this would almost certainly put the UK into an economic tailspin). But consumer confidence will be shot to pieces for some time to come. So it will be harder to get clients to come in and harder to get them to spend when they do.

The time has come to put those management skills into practice, to squeeze every piece of value you have out of your practice. As the tide of debt goes out it will be replaced with the fire of recession – a fire that will burn out bad business.

The Party’s Over

As vets we have always been seen as ‘recession proof’. But with changed market conditions the recession of 2010 (or as some are calling it – the great correction) looks like it will put this to the test.

The debt monster has been partying hard for over a decade, but finally the music has stopped. Today the hangover begins – it also promises to be a monster.

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Six Ways To Run A Veterinary Practice Really, Really Badly

May 27th, 2010
head for oblivion

Onward! To financial oblivion.

The economy is on the mend. And we can’t have that – what will all the journalists and bloggers like me have to write about? So it’s time to do your bit and push the world back towards financial oblivion.

Since credit has largely dried up you can’t possibly get into more personal debt. And since the government has largely removed any responsibility from the big boys, it’s time for us small and medium enterprises to enter the fray. It’s time to ensure that your practice contributes absolutely nothing to GDP this year.

Be strong people. Do your bit and follow these tips on how to run your practice so badly that it won’t ever make a penny, cent or peso ever again.

Step 1 – Don’t make any attempts to get customers through the door.

Don’t advertise. Don’t train your staff on phone techniques. Don’t maintain your buildings or appearance. And under no circumstances engage in any ‘high-falutin’ social media marketing activity. Dangerous stuff that.

Step 2 – Try not to find any problems with pets.

Don’t employ the best vets – go for the cheapest. New grads all the way! Do not waste money on continuing education courses for staff.  Actively discourage using new skills or individual development in your practice.

When your vets are using vaccine consults as ‘catch-ups’ take no action. After all the pet’s teeth will still be bad next year and that niggling lameness will probably get better on it’s own. Found a lump? Probably just a lipoma – no need for a time consuming aspirate.

Step 3 – Stop selling them solutions.

If your vets (pesky lot) absolutely insist on looking for medical problems, all is not lost. Since most of them haven’t a clue how to effectively persuade a client to take the right action this doesn’t represent a big issue. To keep it this way, do not try to teach them communication skills or sales techniques. That would be disastrous in your efforts at avoiding profit.

Step 4 – Sink yourself with pricing.

Ah-ha! Double opportunity to fail here. Firstly, make sure your prices are so low that there is no way you could ever make a profit. Secondly, don’t tell your staff what’s expected of them when it comes to billing. They’ll make it up as they go along and almost certainly lose you a fortune. Good job!

Step 5 – Try not to collect money.

OK, healthy cash flow is not the same as profit but it does mean your business keeps trading. This in itself means you are a risk to economic meltdown. Therefore, try not to worry too much about asking clients for cash. It only makes the vets feel awkward and annoys clients. Everyone will be happier if you just ignore this bit and let clients wander out the door before paying.

Step 6 – Don’t pay bills.

Now you wouldn’t be doing your bit unless you helped pass the pain up the supply chain. So, to make sure no-one else has any money to pay bills or encourage growth keep all of your bills in a pot on the shelf, wait until they are all final demands, then (and only then) select one randomly and pay it.

And while you’re at it, make sure you’re paying top whack for all of your stock, can’t have the margins creeping up now.

Dave’s Tuppence-worth

If you follow these tips folks then within a few months you’ll be guaranteed to be lining up….at the job centre, claiming back some of that money you gave the government in last year’s tax bill. Now, job done…doesn’t that feel better?

Or there is another way…. ;-)

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Posted in Uncategorized, global financial crisis, recession, social media, training, vet HR, vet business, vet management, vet practice management, veterinary business, viral marketing | 1 Comment »

Workhorse Recruitment Launched

May 20th, 2010

I often get asked where I get the time to write a blog, be a vet and do all the other things I get up to. The truth/secret is that I write like others might watch TV. In fact, if the average person watched just 2 hours of TV each night then in a year they’d spend an entire month watching the idiot box!

Imagine a month extra a year to do something more productive. That’s where I get my time.

So onto the exciting news. Last week from The Royal Festival Hall in London I (with the help of my co-owner Mr Graeme Viljoen) launched a new website and business. It’s called Workhorse Recruitment Ltd and in the coming months we will be redefining the way that vets are recruited into small animal practices in the UK.

For now though we’re searching for expert vets, specialists and those with experience writing MCQs to join our growing team of content partners on this ambitious project.

I’ve prepared the following presentation for those interested to give a little more detail. So if you are interested in earning some money in return for your knowledge then please do get in touch.

Next week I’ll be back with a more regular article.

Thanks in advance,

Dave.

Workhorse Recruitment Ltd – Expert Vet Content Partner Information

View more presentations from Dave Nicol.

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Lesson from the London Underground – Don’t be a zombie!

May 17th, 2010

One of my favorite pastimes in London is making people smile on the tube. Mostly this is me being wicked, as anyone seen actually trying to engage other travelers in this way is treated with a combination of fear and loathing. It’s as if your humanity is removed as you swipe your ticket through the gate on the way down to the platform.

Well every so often something happens that reminds everyone that they are in fact members of the same highly evolved species. Maybe a joke overheard, perhaps the train driver says/does something funny, or a child misbehaves amusingly to the horror of the parents. Whatever, in these moments small ripples of humanity spread outward in a very localised part of the train carriage. And for a few fleeting seconds eye contact is made, smiles exchanged and conversations briefly begin between absolute strangers.

Sadly, as quickly as the event occurred, it dissipates and soon everyone is back to staring blankly at walls again like zombies.

What’s this all got to do with life in a vet practice I hear you ask? Everything! On the tube, the sheer mass of people and oppression of traveling around London is dealt with by putting up barriers. Protective blocks that prevent otherwise normal, caring people from interacting in a human way.

In the same way, many vets hide behind a barrier as well. The “professional” barrier that many clinicians unwittingly place between themselves and their patients is inhibitory to good relationships. At best the barrier creates a distance. At worse it causes clinicians to seem cold or patronising. Either way the relationship is never going to develop as it could/(should?).

Barriers are good when you have lions in a cage next to gazelles, but they are not good when you have two sets of people working together for a common purpose. In this case a healthy pet.

Dave’s Tuppence-worth

In order to shine, don’t be afraid to let the ‘real you’ win through in your interactions with clients. Break down the barriers, be a member of the human race and see how things develop for the better.

+++++++++++++++++++STOP PRESS++++++++++++++++++++

London Invaded by Elephants

In a little aside, as I was walking through Trafalgar Square I came across a brightly coloured elephant (pictured above). The London Elephant Parade (there’s almost 250 of them across the capital) is pretty cool, bringing a splash of colour to the streets and all in a good cause – the fight to preserve the habitats for these magnificent animals. I’ve crowbar-ed it in here as:

1. This is a vaguely animal related blog and you lot are likely to be able to help.
2. I like colorful things.

Check out why London is being trampled by psychedelic elephants here.

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Biting the Hand That Feeds Us – A commentary on pet insurance

April 30th, 2010

By Dave Nicol

a person with a choice to makeFor years there has been rumblings in the vet press about the often-uneasy relationship between vets and insurers. But, rather like the disruptive Icelandic volcano of late, the matter seems ready to erupt onto the mainstream of veterinary economics with dramatic implications for a lot of practices in the UK.

If the Marsh Report turned out to be a small issue that got a lot of press, this seems to be the opposite, a gargantuan issue that is getting little. Let’s be under no illusion as to the scale of the problem. If the insurance industry collapses (and it is sagging under a heavy burden), then not a practice in the UK will avoid the effects. And much of referral practice will dry up almost overnight.

What then are some of the problems and is there a solution that everyone can be happy with?

SWOT-ting the Problem

First a brief look at of the issues affecting pet insurance (these are my takes on things so feel free to add, criticise and develop the theme from your own perspective.)

Key Strength of Insurance

Pets and vets benefit when an animal in insured. This in not in dispute and a great many practice owners drive cars funded from the work generated by insured clients.

Key Weaknesses of Insurance

1. Animals currently on the insurance books are ageing and not being replaced with enough younger animals to maintain required margins. This is leading to increases in premiums, excesses and increases in claim ‘push back’ and payment time.

2. Old promises have been broken (remember “we pay in seven days”) and the relationship between insurers, vets and clients is increasingly strained.

Opportunities for Development

1. The market is not nearly penetrated to saturation point. So even in a shrinking market place it will be possible to find more new customers out there.

2. Uptake of other “well pet” products and services like vaccination, neutering, micro-chipping, and parasite control/diets is poor. Products capturing increased sales of these may have room for more manoeuver on premiums based on the fact that if a client buys a greater slice of the pie from their vet/insurer, they get a better deal.

3. There is much, much more business to be captured each day by vets. Not by increasing fees, but by improved uptake of existing or new products and services. Smart practices will be focusing on improving their sales technique. In fact I’d go further and say that if the last decade was about advancing clinical techniques, I believe the next will be about advancing sales skills.

Threats

1. Vet inflation – which came first pet insurance or vet inflation? One, I suspect, is strongly driving the other. Whatever, today’s pet owner now expects their pet to receive the same level of medical care they get themselves. The rate of medical inflation is at times terrifying and threatens not just pet insurance but healthcare systems globally. Can we sustainably afford the levels of healthcare and pet care we currently enjoy? Or are we living beyond our means?

2. Erosion of trust leads to lower market penetration as vets stop selling the products, in fact if things continue they might just do the opposite and actively campaign against it in the consult room.

3. Shrinking/aging pet population – we are all operating in a shrinking market where inevitably there will be a shift towards older pets not being replaced by younger ones. This places massive pressure on all insurance companies who rely on an increasing number of young animals to finance the payouts on older ones.

4. Economic meltdown looms. We might be out of recession but we are not out of trouble. The government has simply moved the problem from the banks (private sector) to the public sector. But with government debt levels at an all time high and tax receipts falling you can be sure that more financial pain is coming – most certainly in the form of higher taxes but quite possibly due to hyperinflation. Either way people will have less money to spend on perceived luxuries (satellite TV, holidays, pets and non-core insurance.)

Where Hence from Here?

two people working together to solve a problemThe status quo of ever-increasing fees and premiums coupled with decreasing and delayed payouts is a very destructive cycle that cannot go on forever.

If we are agreed that insurance has, by and large, been a good thing (and I support this view) then change has to come soon.

Selling more insurance to younger pets is about the only viable option for stabilising the base for all insurance companies. Problem is it won’t be easy to do. Market penetration seems to have crept along and is going nowhere fast. So increasing sales will mean doing something very different (in fact it almost means a paradigm shift).

Creating a policy and a route to market that reaches customers with a product they perceive to be valuable will be complicated and I think highly politicised. We know that vets don’t sell well but I believe real partnership still seems to be the best way forward.

Trust needs to be re-established. For me, one such sensible way forward is for an insurer to sit with an individual practice and help them work out a profitable fee structure and agree caps on certain operations (just as happens with medical insurance). It also means training the practices to sell the product effectively. In return insurers meet promises and payouts that are also negotiated and agreed.

For practices that might mean they can’t charge £3000 for a TPLO, so to make the required margin they are going to have to do more work, but how many practices are actually operating to capacity right now? How many practices are actually capturing all of the available business to them? A rough guess would be none. Not a single one. Improved sales techniques and better management of practice resources will go a long way to helping build sustainable future profits.

These solutions are not perfect or complete. Vets will always be vets and hate selling. Vet practices will always be small businesses with rough-round-the-edge policies and procedures. So politics and compliance issues will hinder efforts. But unless vets have a collective vision of a sustainable future without pet insurance we have to start somewhere.

There are some tough decisions on the road ahead for practices and insurers. It starts with an open and frank dialogue. I hope this piece adds something for others to think about. Please comment or email me your opinions. Better still start talking to your insurer and quite possibly the BVA.

Next Time on Dave’s Blog

Six Tips to Drive Your Practice into the Ground

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The Dave Nicol Veterinary Services Podcast. Edition 2: Selling Out?

April 27th, 2010
Dnvs Podcast 2 – Selling Out? by David Nicol  
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DNVS Podcast 2- Selling Out?.mp3 (3308 KB)

In my second podcast I discuss the taboo subject of selling veterinary products and services. I cover how vets themselves are often their own worst enemy when it come to making clear and effective recommendations for pets. Plus I recommend what action clinicians can take to improve matters for pets, pet owners and practices.

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