Lamone and Yackaville Veterinary Practice

Ben and Marie O'Grady, are associate veterinarians at the Lamone and Yackaville Veterinary Practice.

The practice is owned by Ben's father, Dr Jack O'Grady and his business partner, Dr Bob Grant. Ben has been involved with the practice for as long as he can remember.

Years ago, as a veterinary student, Ben noticed the case load of the practice changing from predominantly large animal cases (approximately 90:10% large animal to small animal) to largely small animal cases (approximately 30:70% large animal to small animal).

Over the years, Ben had advised his father to make some changes that reflect the change in case load, but Jack and Bob actively avoid change. The understanding that there is a need to change for the sake of the business has led Ben and Marie to suggest the preparation of a strategic plan and business ‘health check'.

Lamone and Yackaville Veterinary Practice has been operating for 22 years. The practice traditionally consulted large animals and very few small animals. However, over the last ten years, due to changes in demographics, small animal cases have increased to 70% and large animal cases have declined to 30% of the case load.

Related to this change in case load, practice organisational dynamics are being challenged and so too is income and expenditure. Cash flow is becoming a problem. Accounts have been normal procedure since the practice opened. However, bad debts are rising and there are limited procedures in place for collection of debts. The owners believe that bad debts are about 15% of the amount owing at any one time. However, the owners do not actually know the bad debt rate for certain as the accounts are sometimes sent out monthly and other times bi-monthly.

The owners of the practice, Jack and Bob, currently employ three other full time vets and one part time vet (i.e 3.5 Full Time Equivalents, or FTE's). Ben, Jack's son, is one of the full time veterinarians, and graduated three years ago. Ben has a special interest in small animal orthopaedics.

While Lamone is the main veterinary practice, Jack and Bob also own a branch practice, at Yackaville, located 18 kilometres south of Lamone, in a rural setting. Jack and Bob prefer rural work and mostly work at the Yackaville Practice. The employed veterinarians mainly service small animal clients at Lamone. All veterinarians are competent in large animal emergency medicine, as this is a requirement to be included on the duty roster.

Jack and Bob work part time (0.5 FTE each) as they both own and operate large sheep and beef properties. Lamone and Yackaville Veterinary Practice employs five nurses, three nurses are qualified to Certificate IV level, and two nurses are unqualified but grew up on farms and understand the farming community very well. Between the veterinarians of Lamone and Yackaville Veterinary Practice, a 24 hour service is offered. This is something their competitor does not offer. The practice hours at Lamone are Monday to Friday 8am - 7pm and Saturday 8am - 1pm. Consultations are by appointment.

Lamone has undergone a change from rural township surrounded by sheep and beef producers to semi rural hobby farms and retirement villages. Thus, many residents of Lamone are pensioners with disposable income, and a large percentage own small dogs. Lamone clinic is surrounded by paddocks and a main road links the practice to town. The building is a renovated historic house. There is a large painted sign on the boundary, with pictures of cows, sheep and alpacas, and in large print the word VET and a phone number. The house is surrounded by a large verandah and entry is via a big wooden front door. Inside, a large front room serves as the reception area. Chairs are scattered on the perimeter of the room and a few posters are on the walls; the practice has "James Herriot charm". There are two large consulting rooms each equipped with small animal equipment and a large stainless steel consulting table. Off the hallway is the operating room which is also the general work room, and has an operating table and a wet prep table where dentals are performed, and an x-ray machine. The single large kennel area is also off the hallway so there are sometimes issues with noise when dogs are barking. The practice is computerised and uses Rx works. Although work stations were an afterthought installation, the set up appears to work effectively.

Yackaville's population is approximately 2,000 and the township supports the local farming community. The practice in Yackaville is located in an old bank which Jack and Bob purchased complete with vault and sturdy wooden counter. The vault now houses cages and serves as a kennel area. The receptionist is not qualified as a vet nurse, but she has great public relation skills and communicates well with the clients. Bob and Jack enjoy her company and trust her to pack up the vehicles and dictate the daily schedule. The Yackaville practice hours are Monday to Friday 8am to 5pm. Consultations are by appointment. Generally, farm calls are conducted in the mornings, and small animals are seen between 3 and 5 pm.

Lamone and Yackaville Veterinary Practice own four Hilux ambulatory vehicles equipped with large animal equipment, including portable x-ray and ultrasound machine. The large animal plant and equipment is up to date and well maintained, and the small animal plant and equipment is poor in comparison. Travel fee schedules have remained the same for five years and cover petrol cost, but do not cover wear and tear on the vehicles. As large animal work has declined, one of the vehicles is rarely used.

Lamone has a competing veterinary business located five kilometres away and there is a small pet shop in the town. Bob and Jack found out that their competitor employs two other vets. Word has come through to Bob and Jack that one of the competitor's veterinary associates is just out of vet school and some of the farming clientele suggest she is inexperienced and would prefer someone older. Other clients speak very well of her, even though she takes twice as long as to complete a consult as experienced veterinarians.

Staff

• Jack and Bob: business owners and part time veterinarians (0.5 FTE)
• Ben: full time veterinarian, 3 years experience, consults, surgery orthopaedics
• Kristy: full time veterinarian consults and prefers large animal jobs
• Jenny: full time veterinarian
• Marie: part time veterinarian
• Veterinary nurses: three qualified and two unqualified

Positives

• Respected and trusted local business
• Well equipped to service large animal medical emergencies
• The practice employs veterinarians that are experienced and have well developed client relationships

Negatives

• Equipment inadequate for small animal medicine
• Signage focuses on large animals without incorporating small animals
• A competitor has established a practice locally
• Underutilisation, and high running costs, of ambulatory vehicles

Financial status

• Limited procedures for collection of bad debts
• Bad debts at approximately 15%
• No cash flow budget

Ben and Marie explain their ‘health check' approach to Bob and Jack. Basically, the scope of the health check review is:

• Physical Findings (Client Impressions) - examine branding and visual identity i.e. how clients see the clinic.
• Temperature (Team) - examine organisational structure, operational controls, Human Resources (HR) issues, and any Occupational Health and Safety (OHS) issues.
• Pulse (Finances) - review cash flow budget, fee schedule and stock turnover, key performance indicators explore benchmarking with similar practices.
• Respiration (Professional Conduct) - review record keeping and certificates, and protocols for handling difficult cases or situations.

The outcome of the business health check will be a strategic business plan for the practice. It will include a analysis of strengths, weaknesses, opportunities and threats (SWOT analysis), and a series of key issues and recommendations. Some recommendations would be short term, some medium and some long term. Ben and Marie also intend to create action plans for the most immediate recommendations.

Bob and Jack responded to the idea of conducting a business health check by calling a staff meeting to discuss the strategic review process and what it means to staff and the business. Bob explained that the review would take approximately two months for Ben and Marie to complete. All staff are asked to participate by answering questions or providing records or reports as necessary. Both Lamone and Yackaville clinics would be examined in the strategic review. Two of the long standing nursing staff are negative about the review and this has an impact on the new staff that have been employed as qualified nurses. The veterinarians feel less threatened and see the review as positive.

As the first month of the review progresses, one of the two nursing staff with negative views about the review thinks it is too much and decides to leave, giving two weeks' notice. The other nurse decides to stay and after talking to Bob, agrees to be positive and constructive about the review. Business moves along as usual.

Ben and Marie obtain copies of the financial statements for the practice, service reports, client retention reports, and also a plant list. Ben asks Jack and Bob for the current cash flow budget in use for this year, but there was no cash flow budget.

Ben and Marie hire a ‘secret shopper' during the first month of the review. They design secret shopper visits for face to face visits and phone calls. Ben and Marie also examine the practice's professionalism. They begin by examining medical records and certification standards of the practice. Ben and Marie compare these to the Code of Professional Conduct of the Veterinary Surgeons Board, the registering body. They also use the Royal College of Veterinary Surgeons 12 Principles of Certification. Additionally, Ben and Marie examine how the practice handles ethical dilemmas, as these are very common in veterinary practice.

Authors

• Dr Adele Feakes, Lecturer, School of Animal and Veterinary Sciences, Roseworthy campus, University of Adelaide.
• Ms Diane Whatling, Practice Manager, Companion Animal Health Centre, School of Animal and Veterinary Sciences, Roseworthy campus, University of Adelaide.
• Dr Dana Thomsen, Researcher, School of Animal and Veterinary Sciences, Roseworthy campus, University of Adelaide.

Acknowledgements

• Prof Noel Lindsay, Director, Entrepreneurship, Commercialisation & Innovation Centre (ECIC), University of Adelaide.
• Dr Ed Palmer, Senior Lecturer, School of Education, University of Adelaide.