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Article reprinted with the permission of VETERINARY MEDICINE, Jun 15, 2017 VETERINARY ECONOMICS is a copy-
righted publication of Advanstar. Communications inc. All rights reserved.
The Skeptic’s Guide
to Veterinary Wellness Plans
Here are straight-up answers to six questions you may be asking
yourself about bundled preventive-care-service plans.
By Tom McFerson, CPA, ABV
VETERINARY ECONOMICS
Reviews from veterinarians are decidedly mixed about
wellness plans—those preventive-care-service bun-
dles for which clients pay a monthly set fee. In the
right veterinary practice with the correct implementa-
tion, they can be a roaring success. In the wrong sit-
uation they can land with a loud and costly thud. And
how do wellness plans impact the value and salability
of a veterinary practice anyway?
Thinking about wading into the wellness plan pool?
Consider these six burning questions.
1. Do wellness plans really improve cash flow?
Once a veterinary practice has committed to wellness
plans, trained the team, educated clients, implement-
ed the framework and given the system a chance to
mature, then the answer can be yes. One of wellness
plans’ more appealing aspects is the potential for
steady, reliable cash flow. There’s comfort to be taken
from a large chunk of practice revenue hitting your
bank account at the beginning of each month, quar-
ter or year. And remember, steady cash flow means
less risk, which translates into higher practice value.
But this raises a related question …
2. Am I just giving my best clients a discount?
That is the central debate, in my opinion. Are the cli-
ents most likely to enroll in your wellness plans also
the ones who would pay full price for the recom-
mended menu items anyway? Possibly. That’s why it’s
important to analyze which clients (A-, B- or C-level)
are enrolling in and using your plans. Are you giving
away your upside?
Speaking of analysis …
since wellness plans first arrived on the scene, and veterinary
software systems have come a long way in this area. Billing
for different plans (gold, silver, bronze) with varied renewal
dates (monthly, annually) has become more efficient and re-
liable with each passing year.
But confusion can still arise when you’re assessing how your
wellness plan system is performing at a given time. Is your
practice financially ahead of the game or behind? On a given
day, do your wellness clients owe you money, or do you
owe them services? This can be a thorny issue when you’re
selling a practice with a large wellness component. Is the
buyer assuming a large liability to existing wellness clients?
While we’re on the subject of thorny issues …
3. How difficult are wellness plans to administer
and assess? 4. How does associate pay get calculated with wellness
plans?
Administration challenges can spook practice own-
ers and potential practice buyers alike. It’s been years This can be a big sticking point with employed veterinari-
ans. For example, say an associate is paid 20 percent of his
vet360
Issue 03 | JUNE 2017 | 4