Veterinary Practice Management

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1 Veterinary Practice Management Using Information Technology To Build A Successful Practice Computer systems are typically underutilized in practices. Most expect very little from investments in Information Technology and unfortunately get what they expect an electronic cash register. This paper reviews the benefits of using the Information to provide better patient care and client service as well as increase the profitability of the practice. It discusses how these goals can be met with a little preparation and choosing the right tools. We look at what can be achieved with pre-defined templates for consultations, medical records, invoices and client communications. Also how IT can help in effective inventory control and fee management. Copyright RxWorks, Inc P a g e 1

2 Executive Summary When building a successful practice there is no substitute in for knowledgeable and client-focused staff. Your challenge as a manager is to create the environment where they can really contribute to the success of the practice. Critical goals, regardless of the size of practice, are to: Whilst financial success can provide a short term basis for our motivation and well being, long term satisfaction is only likely to be achieved if there is harmony between our personal values and goals and our professional objectives, and we are content with the place that our profession occupies within our lives. Bradley Viner, Author Success in Veterinary Practice Deliver high quality care that meets professional standards and results in improved patient health and welfare. Improve efficiency and productivity by leveraging veterinarian and staff skills Provide processes and information systems that help staff to understand and communicate the benefits of using your practice Build administrative procedures and systems that make efficient use of your resources Ensure your professional fees recover your costs and provide the return on investment that rewards your knowledge - and are equitable to clients Show clients that the value and quality of your services justify the fees Create a safe work environment that also provides a healthy work/life balance for veterinarians and staff. Many practices under-utilize a resource that can help achieve these goals and that s their computer system. Those practice managers treat it as a transaction processor for basic billing and production reporting. The result is that they realize very little return on their investment. Information technology systems can have a very positive effect on improving patient care and client service consequently, the success of the practice. Practice managers must demand and get more from their computer systems. The focus of the system is the difference between transaction processing and information technology. IT assists the practice improve its patient care, client satisfaction and profitability. Transaction processing concentrates on administrative tasks like printing a bill. Once we get beyond the idea that a computer is limited to printing a bill and basic reporting, we can look at areas in a practice that can be supported by an information-based system. These include wellness management, standards of care, profit-based and equitable fees, inventory management and client communications. How do you get your system to help all practice staff provide better services to patients and clients? First, you need to identify those tasks that can be pre-defined and automated. Once identified, templates can be built to help reduce the amount of repetitive administrative work needed. That Copyright RxWorks, Inc P a g e 2

3 results in increased efficiency and less lost revenue. The pre-defined information is called content in the IT world and is essential to an effective system. Obviously the templates must reflect the practice s protocols and standards of care. Building the content databases from scratch is a time consuming effort and often beyond the resources of a practice. But do you need to do all of the work? No - a substantial portion of the content you need is common to most practices. To get the quickest and most reliable return on your investment in information technology, that common content should be already built for you. That content saves considerable practice staff time and effort in building the databases you need to be successful. Inadequate content databases are the main contributor to under-performing systems. Success is measured by a combination of better patient care, consistent client service, improved work/life balance and increased profitability. Information technology can play its part in achieving those goals as long as there is reliable and accurate content. Expect More from Information Technology Computer systems designed in the 1970 s and 80 s performed backroom transaction processing payroll, accounts payable, accounts receivable, etc. It s accepted that the return on investment in those systems was minimal at best. Benefits were only realized when the systems were redesigned to support the functions that helped to improve the quality of products or services and customer relationships. Unfortunately there are veterinarians that still accept 1970 s minimal functionality from their computer systems. They re happy with printing simple bills, basic reminder systems and production reports. Apart from low expectations, one of the reasons for under-utilization of computers can be the lack of functionality in the system. But for those systems that are capable, the problem is typically the amount of effort involved in building the databases needed to effectively run the functions. Details include pre-defined standards of care, treatments, services, fees, recalls, etc. A software system without pre-defined information or content is comparable to having Google without any information on the internet that it can search. It s a waste of an extremely powerful tool. Content Databases are Essential to Success More than 20 years of experience providing veterinary practice management systems around the world has taught us that it is not enough just to provide powerful programs. We have learnt that a significant amount of content, as well as effective training, are necessary to use the tools properly. For most busy practices, building content from scratch is too time-consuming and labor-intensive. Fortunately a considerable amount of the content is common to most practices. That part of content we call veterinary content. It includes such details as species and breed names, products provided by distributors, forms and regular treatment descriptions. The remaining information is unique content Copyright RxWorks, Inc P a g e 3

4 that applies only to your individual practice. Client and patient details, fees and medical records are part of unique content. The combination of veterinary and unique content make up the information required to run a computer system. In order to be of value, the system must be capable of much more than producing a bill. It is important to recognize that the functions can only be consistently effective when you use predefined information. Information Technology is not only software and hardware (Technology), it also includes content (Information). It is a solution to a business problem, providing a cost-effective blend of computers, programs and professional content. Content Databases The core administration function in a practice is recording treatments provided to patients. The medical record generates all charges, identifies any inventory that you have used as well as client education materials. It also defines any needed follow-up activities or reminders. And although, theoretically, the medical record has no effect on the success of the practice, its accuracy and completeness minimize your exposure to risk - as well as providing a valuable resource for analysis and review of treatments. The quality of your medical records influences patient care and client service, productivity, liability risk, reporting and client communications. Medical records drive all practice activities. So it s no surprise that one of the principal goals of templates held in content databases, is to make medical records simple to create as well as accurate and reliable. Consultation Visit details Recording treatments and progress notes is a time-consuming task. Many veterinarians still record medical history at the end of their day, which dramatically cuts back on their personal time and increases the possibility of omission and error. In progressive practices, information technology has revolutionized medical records and reduced many of the risks created by the older paper-based systems. EMR (Electronic Medical Records) dramatically improve your ability to quickly enter, organize, store and retrieve information. Streamlined, electronic data entry can make building problem oriented medical records much less complicated. You can enter data directly into the record at the time of service with minimal effort. You can simultaneously build a medical record entry and generate related billing charges, as well as other visit-related tasks whilst creating a patient history that is readily available to facilitate better future care. Your success depends on using the computer to provide reliable shortcuts to build the medical record and billing information. Using tools such as content databases and typeahead can help you work more efficiently and accurately. You will need to address the cost factors, desired profit margins and market-based adjustments for each service you provide. These factors include your professional time, consumables, equipment and medical notes typically entered for each service. You will usually want to adjust any pre-defined templates to suit the standards of care in your practice. You may choose to apply the templates in a standard fashion Copyright RxWorks, Inc P a g e 4

5 or edit them on the fly as you create a record at a patient visit. Using standardized procedures can save considerable data entry time and reduce errors. You can create comprehensive, consistent medical records and minimize missed charges. The templates can also include information for other items associated with the visit Inventoried items used in each service, reducing the on-hand stock count Client communications such as descriptive text on invoices describing services, patient aftercare sheets, etc. Screen notes that remind the user creating the invoice of other possible associated services Certificates and forms appropriate to the treatment Reminders or recalls that are normally associated with the treatment. Software can trigger such actions automatically by applying a single template. No extra key strokes are needed, nor do you do need to remember what should be included. You can define what information appears on an invoice or estimate to suit your practice s requirements. Many practices struggle to recover all of the costs associated with providing their services especially when performing surgery. Do your fees recognize the cost of the time, materials and resources involved in the entire pre-operative, intra-operative and post-operative periods for each surgery you perform? Software tools can help you make sure you consider all of these when establishing a fee. Unfortunately it is unlikely that the typical practice can afford the time and cost of building these templates. But the setup burden can be substantially reduced if your software vendor provides content databases of templates that can be used as a starting point for your practice. Client Invoice Your invoice is a key part of a client communication and education strategy. It is the one document that you can almost guarantee that your client will read. Your bills can emphasize costs of care or alternatively, can educate clients and market the value of your services. The design and content of the invoice should concentrate on the value of the veterinarian s time and expertise and reduce the client s focus on the list of fees. You can include customized text that describes the services that have been performed as well as the fees. This value text should be included in the templates and printed automatically. If your invoice is just a list of charges, you are missing a major opportunity to educate the client and improve the client/practice bond. Printing client bills that look like supermarket receipts can do nothing except create the impression that your services are commodities where cost is the major concern. Copyright RxWorks, Inc P a g e 5

6 Here s an example of an invoice produced from a template. This was printed on plain paper with about three mouse clicks. The Details box explains what was done during the Spay. Note the descriptions with Surgery and under Miscellaneous. These were automatically generated from the Spay template included in the content database. All of these pre-defined texts can be edited to meet your own communication preferences. Copyright RxWorks, Inc P a g e 6

7 A significant side effect of using the pre-defined and combined medical record and charge templates is to reduce the number of missed charges. Several practice management consultants estimate that between 10% and 20% of charges are typically missed. Others suggest that $64,000 per year is lost per veterinarian. Remember that these charges represent losses in Net Profit as you have already expended the costs involved in providing the services. Inventory control One of the largest assets and variable expenses in a practice is the inventory; however, it rarely gets the attention in management and control that it needs. Furthermore, inventory is one area where the entire team can be involved with making the practice a more cost effective business. Angela Aisbet, MWI Veterinary Supply This critical practice task rarely receives the attention it deserves. IT systems can automatically record inventory usage as a by-product of creating the invoice. They can also handle other inventory management tasks such as controlling orders, receipts, adjustments and transfers of stock in a practice. Systems can provide electronic ordering, receiving and price updates for products purchased from distributors. Electronic receipts are the most cost-effective and accurate way to record items coming into your inventory. This method eliminates manual entry or the need to barcode every item. Alternatively, you can receipt items into your inventory automatically by using 2D barcodes printed on the shipping document by the distributor. Software can provide time-saving tools to help practices manage orders, receipts, multiple location inventories (e.g. truck inventories, etc.), expiry dates, batch numbering and controlled substance logs. You can streamline inventory control set-up if your software includes a content database holding details of those items you normally stock. The list should include vendor part numbers, descriptions, income categories, reminder protocols and other details. You can select the vendors you use, activate the items your practice carries and add specific costs and markups. As the database information provided by the distributors changes (e.g. price, new products, etc.), your inventory database would be automatically updated by your IT vendor. The goals of inventory management are to make sure you have the items needed to treat your patients and at the same time control your inventory costs. These can often be conflicting and cause problems unless they are carefully monitored. A comprehensive IT system provides the tools to ensure that you are in control over both these goals. Managing for Profit Most practice managers agree that measuring your performance using gross revenues is misleading. Similar metrics based on gross revenues such as Average Client Transaction or Average Transaction Fee, have the same problem. The only true financial performance measure of a practice is profit. When you establish logical, profit-based fees, your program can report accurate data from your practice s system that allows you to manage for profit. Copyright RxWorks, Inc P a g e 7

8 A comprehensive system can help you calculate all of the actual costs associated with each service. You can establish profit margin goals for each income center, e.g. professional services, anesthesia, radiography, medications, etc. Using your practice costs and profit margin goals, your program can automatically calculate a suggested fee for each service. You can adjust fees for market conditions such as shoppable and high expertise services, and record the reasons for the adjustments for future reference. The suggested profit and any adjustments are recorded and that information is available for when you consider fee strategies and profit planning. How much profit are we making or missing? Your system should give you this information and more. You can identify unprofitable or highly successful services as well as under-performing staff. Accurate information gives you the tools to plan knowledgeably and proactively. A system can help you set your fees more strategically. No more managing through the rear-view mirror, depending on historical financial statements from an accountant to deal with fee issues retrospectively. Use the program to test various what-if fee strategies to determine their impact on practice profitability. Since time is a basic component of all services, a key measure of practice performance is the amount of time billed by your veterinarians or technicians. Your program should help you benchmark and compare the time spent providing professional services versus product-based services or track data related to income centers, etc. A blanket increase of all fees is dangerous and often leads to client dissatisfaction. The growing availability of medications and other products via the Internet makes the fees for those items more transparent and price sensitive. Most clients lack a basic understanding of the costs associated with maintaining inventory. If they see significantly lower fees from other sources, they may incorrectly assume that you are price-gouging and infer that you are charging inappropriately for all of your services. Use your system to set supportable fees that consider all cost factors; to help manage fees strategically and proactively; and to communicate the professionalism, scope and value of your services. How you present and explain your fees can have a dramatic effect on how your practice is viewed by your clients. Do not leave this vital element of your business open to possible misinterpretation. Client Education and Communication It is generally accepted that an educated client takes better care of a patient and has a good business relationship with your practice. Yet in most practices there s no plan to educate them. Client communications are restricted to sending reminders or giving an occasional handout. An effective IT system should provide a variety of customizable tools to help your practice create timely, effective and automatic client communications, report results and measure your client communication strategy. These tools should include a multiple reminder system that allows you to measure response rates to reminders. The program should provide specialized handouts, forms, recall systems, messaging strategies, text templates, estimate formats, healthcare indicators - all of which should be linked to your Standards of Care. Copyright RxWorks, Inc P a g e 8

9 Educating clients - helping them to be aware and understand the value of your many services - can also grow your business. This strategy can allow you to provide more services to existing clients and attract new clients to your practice. Your success in bonding the client to your practice is directly related to the client s perception of your practice s empathy, responsiveness, professionalism and expertise. Educating your staff and your clients strengthens the bond. AAHA s study on Compliance showed that establishing and communicating Standards of Care for wellness management is critical to improving patient care. Communication is a process and includes the following: 1. All of your staff must play a part in letting clients know what those standards are and what you recommend for the patient. This is crucial to improving compliance and the client/practice bond a system should provide immediate access to all needed information in one screen. And when the visit is being completed, check to make sure your recommended healthcare items have been addressed. If not, why not? 2. A key part of effective communication is for all staff to give the same message to the client explaining why the recommended care is important. It essential that there are tools for you to define the message and then help all of your staff deliver it. 3. To manage the process, you must be able to measure the success of what you are doing to improve compliance. The system must provide reports on the rates of compliance. But, more significantly it should provide you with the reasons why you have failed to obtain any client s agreement to your recommendations. You can then take action to remove the obstacles to increasing compliance. Methods of Communication People are changing the ways they communicate with each other and it is worthwhile taking advantage of those changes. The goal is to provide appropriate information in a form to help you build clients trust in your professionalism. It is good management to use the power of the tools you have acquired to help make your communications more effective. A pre-requisite is to have a comprehensive process and templates that address all of the tasks required. These should include templates for reminders, standard administration letters, marketing pieces, aftercare instructions, and text messages. You can then adjust them to meet your own specific strategies. The example below of an After-care handout was printed automatically as a by-product of selecting a Spay Procedure. It shows how information that is contained in the database is automatically merged into the form, creating a personalized and professional take-home document. Note that the dog s name and gender have been inserted automatically where appropriate. Copyright RxWorks, Inc P a g e 9

10 Copyright RxWorks, Inc P a g e 10

11 Summary The veterinary profession lags behind other businesses in taking advantage of IT to help growth. Most under-utilize their practice management systems. They are limited to automating administrative tasks that help the practice, but have little value to clients. And provide low returns on investment in IT. To take advantage of the wealth of information that s held in your databases, you need to use them to help provide more consistent and complete client communications strengthen client loyalty record and support your standards of care protocols monitor each patient s status with your healthcare recommendations build a fee structure based on sound business principles manage your investment in resources such as inventory and professional time increase profitability All of these require pre-defined information in order for your IT system to be effective. It s essential that the information is accurate and complete or you will not achieve the potential ROI. Content databases are critical to success and consist of two main types of information - Veterinary Content that s common to most practices, like list of breeds and product information. And Unique Content such as client and patient information, that s particular to your practice. Building content databases from scratch is time consuming and expensive. That s one of the primary reasons why practices revert to simple administrative tasks for their computer. The return you can get from a successful system far outweighs the cost of building the databases, but the initial effort is often beyond a practice s resources. Your software vendor can dramatically reduce your investment by supplying the Veterinary Content databases. You get the return much quicker at a much lower cost. Copyright RxWorks, Inc P a g e 11

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