How the veterinary profession is managing so well in the COVID-19 crisis
Two months ago we thought the world would change, and it certainly did, but for some of the more progressive business owners business is still booming.
We will share with you some of the ideas and experiences that may help the profession get through this time better than most. Please read all of the information on this newsletter if you want to make sure your business stays safe.
Some of the information that we share here may be controversial but we will still provide it as we are in the fortunate position to have hands on time with veterinary practices day to day workings and their financial status – we believe that this information will help keep the industry healthy and veterinary teams employed and safe.
Here are the key issues we have seen how they have been dealt with.
Is the revenue in the veterinary industry really adversely effected in Australia?
We have monitored this for 7 weeks now, week by week comparing the revenue and primary consultations of 200 full time vets spread across Australia. As a comparative we have looked at exactly the same weeks in the previous year and made adjustments for varying public holidays. The data collected was based on invoices generated by these veterinary practices, their totals and the count of their primary consultations.
The net change over the 7 weeks indicates that there has actually been growth in both revenue and primary consultation volume over this period!
Note that this is unlikely to be the case in other countries such as New Zealand, Spain and the UK where lock-down has been more strict and vets forced to send most of their work away.
We were surprised that revenue actually increased in Australian practices and questioned the validity of our data, we were also informed via email by the Accenture group who performed a large scale economic analysis in a different way – they monitor the spending of 250,000 consumers on a regular basis. Their analysis indicated that spending on ‘Pet Health’ had increased by 6%, making the pet industry one of the ones that actually grew.
The fact that two separate methodologies have yielded a similar result indicates that the profession has in fact grown.
Yes, there will have been some practices that have decreased in revenue, and certainly we have had hands on experiences where this has happened – the next points may highlight some areas where decision making has had beneficial or adverse effects on the business.
Am I likely to qualify for government subsidies?
We have emailed all our clients and held 2 webinars on the the government subsidies available, however we are still surprised to find that clients know nothing about this, so here is the information – there are 2 government support packages:
PAYG withholding refund: All veterinary practices will qualify for this. PAYG withholding on your payroll will be credited to you when you lodge your BAS. This will happen automatically when your BAS is lodged so there is no application to complete. To help you estimate what this will be, roughly for each full time vet and associated support staff the practice will get $3200 a month refunded (note this is an estimate but it will help you to budget). The maximum refunded to any practice over 6 months (up to October) will be $100,000 – practices with 4 or more full time vets are likely to reach this cap, so larger practices will get a maximum of $100,000.
Job-keepers payment: This does NOT happen automatically, you have to apply and show a decrease in revenue of over 30% compared to the same period last year. You can use a period as short as 2 weeks. To do this you have to KNOW how much your business is invoicing – a lot of business owners are contacting their accountants in a panic asking if they qualify – if your bookkeeping is not up to date, there is no way for your accountant to know! Hence the importance of keeping your books up to date and knowing your numbers.
To assist our clients with this we have compiled a report in Profitdiagnostix which looks at how much your practice has invoiced out of your practice management system over 2 weeks and compare it to the same 2 weeks last year. This report is up to date every 24 hours because your practice management system does not lag behind like your bookkeeping.
As there has been general uncertainty in the profession, we have made an exception over this period to support even non-client practices using Profitdiagnostix – So if you want to monitor your business for job-keepers every week, we will set up a simple Profitdiagnostix system for you at only 30% price ($100 a month) and not lock you in for any period – when the crisis is over you can just drop off. If you want this done, contact firstname.lastname@example.org
We are hoping this will help some veterinary practices that may be struggling.
Note 1: because we have been getting real-time invoicing data from a lot of practices, we can tell you that hardly any of practices qualify for job-keepers payment (have not dropped 30% revenue). Most veterinary practices we are currently monitoring have been doing just as well, if not better than last year.
Note 2: just yesterday the government has started drafting MORE rules about job-keepers payment to perhaps allow growing businesses and new businesses to get access to job-keepers payments. So there are going to be more rules here, they are currently in draft so we cannot comment on them.
Do I turn work away?
COVID-19 is not a joke. Australia has been very lucky not to get effected as badly as many other countries. This is a balancing act where you have to keep your team safe but ensure pets’ health is looked after. Most clinics have given a lot of thought about keeping the practice safe.
If you truly believe that your business is there to provide advocacy to pets, then you and your team will not turn most of your work away but instead make sure there are enough precautions to limit contact between people.
The focus needs to be on making the workplace very safe AND still servicing your customers. Pets still have needs which are not critical but important, and pet owners will go and visit the vet that is open, not wait a month or two. Pet owners will respect the social distancing rules you use in the business to keep the team safe but greatly appreciate the fact that you were there for them and their furry child.
Keeping the team positive
The single common area where practices have struggled or flourished has pivoted on the attitude of their team. And although this sounds simple, it has a lot of aspects to it. How safe do they feel? Are there individuals in the team that are higher risk? Are they clear on the objectives and goals of the business at this time?
A ‘melt down’ of the team is what you need to avoid! Although COVID-19 does not effect the willingness of pet owners to visit the practice and have their pets cared for, it IS a catalyst for breakdown in a team. And of course it is, because suddenly the team loses clarity on what procedures to perform and begin to worry about getting infected by co-workers who may not be isolating themselves optimally outside the workplace. They also worry about their job security.
How this worry and confusion is managed is a key element to staying in business. Managers who have sat down and had open discussions with their teams and identified the issues early have managed to mitigate this better than those who have not.
One of the main issues that needs mentioning is that the team needs to be aligned as to what procedures the practice should or should not do. The practices who were happy to put a lot of effort in keeping the team safe AND also servicing their customers have done the best.
Keeping the team safe
It seems very feasible to run a veterinary practice with a normal workload and keep your team at a fraction of the risk that other businesses have to endure. The people running cash registers at grocery stores for example have considerably more exposure than veterinary teams we are seeing that run with measures in place that limit contact with humans.
Is the general leading the charge or running the other way?
It seems practices with strong management in place and on-site with the veterinary team seem to do better. Of course retrospectively now this makes sense – a manager on site can spend a lot of time making sure that there is someone with experience and authority to make sure everyone is doing the right thing for workplace safety. And of course if the person with most experience and authority does not want to come to work, then the rest of the team will be left wondering why they should be in the firing line.
That does not mean the business owner has to be there. We have a number of practices where the owners are older, and their team has asked them to stay at home, but to keep the team feeling safe, there has to be someone there in charge of the safety protocols.
Avoid exposure with clients in the practice
At the start of the crisis, a lot of practices opted for splitting into 2 teams – does this work? Initially a number of clinics put this in place as there were no social distancing rules and the number of people infected was going up exponentially. We now see some single site practices go back to a single team approach and focus more closely on preventing other humans from entering the building.
In all cases however, it makes sense to limit close contact with customers. Although some practices are still letting pet owners enter the property (and their teams are comfortable with this), many are examining the patient without letting the owner through the front door. The consultation is performed with the assistance of a nurse and the pet owner is left outside and spoken to via a web video app or directly on the mobile phone.
Some of the good ideas around this have been:
- Having a table across the front door. The dog walks under the table with its lead and the customer cannot approach more than one table width closer to the door. The dog is walked by the nurse to the consult room, secured, lead removed, hands sanitised and the consultation performed. The dog is then returned with its lead, passed under the table, hands sanitised again and contactless credit card payment is accepted via the card machine which is on the table or by telephone.
- A good twist on this one is a practice that has external windows to their consult rooms. The customers stand outside by the windows and a nurse assisted consult is completed.
- If the team has agreed to allow customers into the waiting area, lines have been marked on the floors with tape. Customers maintain distance using the lines and stay in the waiting area for the consultation. Feedback has been that after the first few weeks of the crisis, most people have learned to obey the lines.
- Having hand wash available everywhere
- If the team feels safer, then they can wear masks, there are even washable/re-usable ones, but information seems to indicate that this is really only protecting them from each other by capturing droplets. It may also be hard to work a full 8 hour day in a mask.
- If pet owners enter the building, then they can wear masks/ masks can be supplied.
Please note that all of the above require a higher staff overhead – there needs to be a nurse in the consulting room with the vets and the work flows a bit slower. There is a hidden cost of slightly higher wages.
Your team have an obligation to each other
It is important that your team know this. In some practices the team have made a pact to completely social distance themselves outside the workplace for the duration of the crisis. This helps put minds at ease. No take away’s, no unnecessary visits out of work, stay at home as much as possible, do not come to work if you feel even slightly sick. Behaviour at home is just as important to everyone’s safety as behaviour at work.
Will the government packages really help?
Yes, we have done the maths. If a practice truly loses 30% of its revenue, then the job-keepers payment will save that business. However, looking at the current numbers, very few practices are likely to need this unless there is a dramatic change. PAYGWitholding credits are a significant help to those businesses that have lost a small amount of their revenue.
Should you look at accessing the very generous job-keepers, particularly if your team wants to turn a significant portion of work away? We believe that this is a very poor medium term tactic. Consumers still want to take their pets to vets, and if you turn work away, they will go somewhere else. While your business is saved in the short term, the long term loss of goodwill may mean the end of your business in the medium term.