How Increased Compliance Leads to a Better Business

Brenda Tassava, CVPM, CVJ, VetSupport, New Orleans, Louisiana

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How Increased Compliance Leads to a Better Business

While some practices focus on getting pets on heartworm preventives (HWP) through the late spring, summer, and early fall months, most focus on year-round prevention based on geography and seasonal fluctuations. No matter where they live, patients count on their veterinary team to educate their owners and provide prevention.

Improving HWP compliance at your practice can be done several ways, but first, you must know your current compliance rate. HWP compliance is defined as presenting the recommendation to the client, the client accepting the recommendation, and the patient receiving the recommended preventive from the practice.1 The number of preventive doses sold through the practice can be calculated using reports generated by the practice management software, but determining the number of doses sold is different than identifying the number of monthly doses actually administered to patients after they leave the practice. In-house compliance rates provide an approximation of actual HWP compliance, and should be monitored yearly to gain perspective on whether they are declining or improving.

Calculating Compliance

To calculate canine compliance for a practice that recommends year-round prevention, you need to know the number of active dogs (ie, the number seen at least once in the past 12 months) and the total canine HWP doses sold in the past 12 months.

Divide the total number of doses sold by 12. Then, divide that number by the number of active dogs to determine compliance rate.

(Practices recommending 9-month compliance should substitute 9 for 12 in the calculation.)

12 000 doses/year ÷ 12 months/yr = 1000 doses/month
1000 doses/month ÷ 5860 dogs = 0.1706 dose/dog/month, which is 17.06% compliance (ie, 17% of active dog patients had a dose of HWP purchased for them each month)

If the practice also uses a 6-month injectable HWP, add this to the total by finding the total number of injections given, dividing that number by 2 because it should be given twice a year for year-round prevention, and then dividing that number by the number of active dogs.

200 6-month injection doses ÷ 2 injections/year = 100 compliant dogs
100 ÷ 5860 dogs = 0.017, which is an additional 1.7% compliance

Adding these rates together shows this practice has an 18.76% compliance rate. Do the same exercise to determine the practice’s heartworm preventive compliance rate for cats or compliance with heartworm testing. (See Impact of Improved Compliance.) VetSuccess Preventive Care Snapshot, a monthly report available by subscription, is another way to track and measure HWP compliance for dogs and cats.

Impact of Improved Compliance

Do you want to improve your practice’s heartworm testing (HWT) compliance? Using the steps in this article and the 2017 WMPB Benchmarks for HWT fees, you can determine your practice’s current HWT compliance rate and see how compliance improvement can impact your practice. (See Benchmarks.)

Current compliance for 4Dx = 1250 dogs tested ÷ 5860 active dogs = 21.33%

Improve compliance to 45% = 5860 active dogs × 0.45 = 2637 dogs tested

When 4Dx compliance increases from 21.33% to 45%, gross revenue goes up by $72 124.

1250 dogs × $52 = $65 000

2637 dogs × $52 = $137 124

Difference in gross revenue = $72 124

Impact of Improvement

Most veterinary practices have many opportunities to improve HWP compliance rates. The practice in the example had 5860 active dogs but only 18.76% compliance. Knowing the practice’s compliance rate allows you to set a goal for improvement.

If 35% is the new goal, 952 more dogs would receive year-round HWP, almost double the previous year’s number.

18.76% of 5860 dogs = 1099 dogs that received year-round prevention
35% of 5860 dogs = 2051 dogs that received year-round prevention = a difference of 952 dogs

How does the new goal financially impact the practice? The benchmarks for HWP markups and dispensing fees show the median markup as 90%, with an added $5 dispensing fee. (See Benchmarks.)

Heartworm Preventive Fees

  • Canine heartworm antigen test    $39
  • Canine heartworm 3Dx test (heartworm, Lyme, Ehrlichia spp)     $44
  • Canine heartworm 4Dx test (heartworm, Lyme, Anaplasma spp, Ehrlichia spp)    $52
  • Markups on dispensed HWPs (in-house pharmacy)    90%
  • Markups on dispensed HWPs (online pharmacy)    75% 
  • Dispensing fee for HWPs (in-house median fee)    $5
  • Dispensing fee for HWPs (online median fee)    $8

SOURCE: Benchmarks 2017: A Study of Well-Managed Practices. Columbus, OH: WMPB; 2017:28, 35.

Using these amounts, if your practice pays $50 for a 6-month HWP supply, marks it up at 90%, and adds a $5 dispensing fee, the return on every sale would be $50.

Client price = (inventory cost + (inventory cost × markup)) + dispensing fee
Client price = ($50 + ($50 x 0.9)) + $5 = $100
Return = client price - inventory cost
Return = $100 - $50 = $50

If a 12-month supply of HWP is purchased, the practice return is $100 per compliant dog ($50 return/6-month supply × 2). If the practice reaches its 35% compliance goal, 952 more dogs will receive a 12-month HWP supply. This means the practice would earn an additional $95 200 in gross profit ($100 return × 952 newly compliant dogs). The gross profit does not account for costs such as increased inventory, product shrinkage, and increased labor expense.

Conclusion

Do not roll over and assume that noncompliant clients will not change. When you take the time to improve preventive care standards, set goals, and train the team to make confident recommendations, more pets will get the preventive care they need and your practice will grow.

1 First calculate the practice’s current heartworm prevention compliance rate and then set a goal for improvement.

2 When the new goal is set, train all team members to confidently recommend prevention to clients.

References

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