When it comes to evaluating fees, these are times that try the souls of most equine practitioners. With the economy still
showing only glimmers of recovery, you may be wondering if you should lower fees to keep clients, raise them to meet inflation,
or stand pat.
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There's no blanket answer, according to one veterinary financial expert. Numerous variables come into play, foremost of which
are the geographic region in which you practice and how your bottom line is currently faring, says Dr. Karen E. Felsted, CPA,
CVPM, chief executive officer of the National Commission on Veterinary Economic Issues (NCVEI) in Schaumburg, Ill.
Aside from those basic factors, Dr. Felsted offers some guidelines that can help you evaluate your fee structure—deciding
what should change and what should not. "I'm not crazy about lowering fees because it appears that you're devaluing services,"
Dr. Felsted says. "Then how do you justify raising them again when times are good?"
However, Dr. Felsted says, lowering fees may be appropriate in some situations—for instance, if your clients have been hit
hard by the recession and you're facing intense price competition from nearby practices. But if you're considering a decrease,
be sure to perform a cost-benefit analysis of how it will help your business, then alert horse owners to the change. "It has
to be an amount clients will notice, and you have to let them know you're doing it—otherwise what's the point?" Dr. Felsted
says.
One practice that has done this is Rood & Riddle Equine Hospital in Lexington, Ky., which lowered fees by 3 percent to 4 percent
and sent a letter to all of its clients announcing the change. Another option is to lower fees on competitive, routine care
to keep clients coming in. "But even then you want to announce it," Dr. Felsted says. "Your letter could say something like,
'We know everyone is hard-hit with the recession and we want to do our part to make sure your horse still gets the care it
needs.'"
On the flip side, rising production costs might cause some equine practices to consider raising fees. Is that a good idea?
Not in every case. "There may be other things you can do, like cutting expenses and being more productive," Dr. Felsted says.
Holding the line
Three practitioners we talked to have done just that. Once they fully recognized the seriousness of the recession, all of
them decided to hold the line on fees and instead try to add value that clients would perceive. "We've maintained our fees,
but we try to be more accommodating to clients," says Dr. Steve Hicks, a solo practitioner and owner of Cedarcrest Farm &
Equine Clinic in Palestine, Texas. "I give more of my time and give back to clients on some of the simple things."
Dr. Ron Gaeta
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Dr. Hicks's practice is mostly haul-in, and these days if he walks out to examine a horse and sees nothing seriously wrong,
he might advise the client to wash the animal, take good care of it, and call him if necessary—and not charge for an office
call. In the past he would have charged for this visit.
Dr. Hicks, who's a past president of the Texas Thoroughbred Association, says he's well-positioned to ride out the recession
without raising fees because of his solo status and the fact that his farm and most of his equipment are paid for. "My situation
is different from many others'," he says. "I can't speak for those with two associates and some technicians on staff. Yes,
our business has been down perhaps 25 percent, but I still see horses every day. Maintaining my fees seems to have been the
right thing to do."
