Levittown Animal Hospital Blog

I get asked that question a lot.  Sometimes I know the answer, but often I don’t …and that’s by design, as I try not to let my perception of what’s “expensive” influence my medical recommendations for my patients.  It my job to answer “What does the patient need?” not “What can the client afford?” But obviously, someone at some point has to pay the bill -and at my hospital (like most others) that “some point” is at the time services are rendered.

So what goes into setting the prices at an animal hospital?  For some things, it’s pretty easy.  Medications and products often have a standard markup, often between 100% and 200% in small animal hospitals, plus a nominal pharmacy fee.  Services such as examinations, blood testing, vaccinations and other diagnostic procedures are a whole different ballgame.  These prices vary widely between different hospitals since they’re often determined based on regional and local customary fees.  Or in other words, they’re priced based on what  the local demographics and economy can support.  But sometimes prices can vary widely between neighboring hospitals.

For example, my current examination fee is $59.  That’s cheap compared to some Manhattan veterinary hospitals who are charging $85 to $100+ for an exam, but I’m sure it’s  a lot more than some mid-west practices who get $25-45 per exam.  Is a $100 examination twice as extensive as a $50 one?  Of course not.  In fact, I’m sure there are veterinarians out there charging $100 for an exam who are missing things that a $40 veterinarian would pick up on.  Price is never a good indicator of a doctor’s quality of care -just the cost of living in their hospital’s neighborhood.

Also remember that buying veterinary products and services is not like shopping at the grocery store.  You typically are not just paying for a simple tangible product -you also get client education, product support, dosage calculations, medical history review, and many other “built-in” services.  Well, let’s hope you get all those things.

So when is something too expensive?  There’s a difference between an expensive service that’s simply overpriced and an expensive service that’s worth every penny.  (There’s also a difference between not being able to afford something and not wanting to pay for something).  A good example is an elective surgery such as a cat spay.  My hospital charges $250 to spay a cat under 6 months of age.  We’re more expensive than some area hospitals and cheaper than others.  We include bloodwork, IV fluids and pain-killers, while other hospitals may make those things “optional” (like when airbags used to be optional in cars).  But no matter what we charge, for most general practitioners, an ovariohysterectomy (aka spay) will be the most complex surgery they’ll ever perform in their career.  If we charged for that surgery based on complexity of the procedure (as some other surgery fees are calculated), we’d probably come up with a number well over $1,500 to spay a cat.  However, the general public has been convinced that this is a “routine” procedure that is worth much less.  And let’s face it, how many people would spay their cats if it cost that much?  So while $250 may not be a small amount of money, it’s a pretty good deal for major surgery.

I’ve been criticized in the past by other local veterinarians for not charging enough for my dental procedures.  They cringe when I admit to them that my cost includes full-mouth X-rays of all the teeth.  They say I should charge close to $600 or 700, when I’m only asking for less than $400.  Now, we could talk all day about cost/demand elasticity, but there are really only three big considerations factored into my price 1) I wanted the majority of my clients to be able to afford the service that I place so much importance on.  If I can’t put my equipment and well-trained technician to use …then why have either of them? 2) I want my staff to do lots of dental procedures.  Practice makes perfect. 3) Since at least half of dental disease is hidden under the gum line, I figured that any “discount” of the general cleaning would be offset by the disease and pathology we identify with dental X-rays.  It’s a win-win situation: when you practice good medicine, without shortcuts, and at a fair price …both sides get rewarded.

It’s sometimes tough to remember that most veterinary hospitals are NOT non-profit businesses (even though most hospitals are unintentionally run like non profits, but that’s a whole different blog altogether).  Hospitals need to make a profit in order to expand services, maintain and update equipment and properly compensate their staff and doctors.  The overhead for a small animal practice can be pretty high, and some consultants even break it down to dollars per minute!  I try not to get too caught up in all the little numbers so I don’t forget the big picture stuff:

• We need to pay the mortgage -not on our own homes, but the practice/building itself.  In five years, I’ve just started to scratch the surface of the principal…
• We need to purchase and stock medical supplies and medications -including things that we don’t use very frequently.
• We need to compensate staff and provide them with benefits.  With support staff, you often get what you pay for.  Most veterinary hospitals still do not provide health insurance benefits for their full-time employees -and they wonder why they can’t hire/maintain good staff.
• We need to purchase and maintain equipment.  Medical equipment is never cheap.  Some instruments will directly generate income for me (e.g., my $65,000 digital X-ray unit or $12,000 serum chemistry machine), while others only enable us to continue practicing high quality medicine (e.g., my $5000 anesthetic/vital signs monitor or the $1000 doppler that my tech has on her wish list).
• We have utilities to pay.  We try as much as possible to conserve electricity and water at the hospital, but inevitably, lights will have to turned on, and we run an average of 6 loads of laundry per day.  If anyone would like to donate solar panels to help offset our utility costs, I’m happy to accept them :)
• Nothing lasts forever: every square inch of the hospital and everything contained within it will eventually need repair or replacement.
• The tax man always takes his [un]fair share.