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Veterinary Forum September 2007 (Vol 24, No 9)

Business Skills: The time to discuss finances is before the bill, not after

by Peter Weinstein

    Because most pet owners do not budget for the care of their four-legged family member, they must redirect money from some other household expense to pay for pet health care.

    It is imperative to have a strong system in place to discuss with them:

    • The best care for their pet
    • The reason for this level of care
    • The options to assist them in providing their pet with the needed care

    As discussed in "What we've got here is failure to communicate" ("Issues in Practice," April 2007), how the information is presented is just as important as what information is presented. I suggest that as many decisions about "economic euthanasia" arise from how information is presented as from the actual cost of the care. The presentation of the costs of veterinary care can be a matter of life or death for the pet.

    A strong financial policy

    Before you can develop a strong financial policy, you must have a staff that whole-heartedly believes you are providing the best care for your clients and backing up that care with value and service at a price that is competitive within your local marketplace. Without this foundation, you have a house of cards where the staff will not support the decisions and recommendations of the veterinary team.

    If you make your clinical decisions based on what is best for the pet, the pet owner, the staff and the owner of the hospital — in that order — you will engender 100% support from your team. In addition, if you train your staff to understand not just the "what" of the clinical care but also the "why" of the clinical care, you will find that they will strongly support any financial policy that you develop.

    When reviewing the components of a financial policy, make sure you:

    • Always discuss patient needs with the client to create a level of confidence and understanding about the significance of the care to be provided.
    • Create health care plans or treatment plans — formerly known as estimates — for optimal health care.
    • Present the health care plan in a way that focuses on both the why and the what of the needed procedures before focusing on their costs.
    • Explain the many options to assist in the cost of veterinary care, such as pet insurance (before the fact), third-party payment options (after the fact) and a variety of payment types (credit cards, cash, check).
    • Do not act as a bank for the client.
    • Do not act like Monte Hall hosting "Let's Make a Deal."
    • Communicate your financial policy to clients and even potential clients before it becomes an issue.

    Financial policy form

    Put your policy in writing. By putting your financial policy in writing, you are documenting and validating what you believe for your staff and your clients. The policy form can be included on your website, posted in the reception area, summarized on your brochures and presented to new and old clients. The premise: You believe in clear communication, mutual understanding and respect, and your clients appreciate knowing in advance what your financial policy is.

    It is your goal to make sure that financial considerations are not an obstacle to a client providing important, life-saving care to their pet. So, clearly define that in your form. Not until clients understand how much you care should you discuss their payment options.

    Also, remember that your goal is to not to be a banker or a pawnshop broker for your clients. Your payment options need to explain both short- and long-term payment plans.

    Payment options

    Because this form will be given to new pet owners and established pet owners alike, you should have a statement about pet insurance. This may be as simple as "Pet insurance is available to assist you in the cost of care for your pet. For additional information, ask one of our health care team." It may be more complicated, such as "We believe that every pet that is eligible for pet insurance coverage should enroll as young as possible with XYZ Insurance Co. The insurance will provide a real benefit to you and your pet's long-term health care." This addresses the big picture.

    However, most pet owners are not that pro-active. So, what is your plan for the more common, "I didn't know it would be that expensive, I can't afford that" client?

    The obvious choices are cash, check, money order, credit cards, check cards, debit cards, etc. In most cases, there is some payment source that includes one of these.

    On the other hand, on the rare occasions when your client has no cash and no credit cards, what can you do? The recent advent of "client payment plans," through a variety of companies, such as CareCredit, has opened up a whole new modality for client financing.

    These companies will act as the bank for you. Clients apply either online or over the phone in your lobby and are approved for a set amount of coverage. The interest rate and length of payment are available in a variety of options. The burden of collection is transferred to the alternative party payers. There is a charge to you of a small percentage of the bill, but you get your payment immediately with no worries about trying to collect the money. The buck has been passed from the client to the third-party company to you in the blink of an eye. And clients like the idea that their pet has its own credit card.

    On the other hand, if you enjoy sending out monthly statements, reminder notes, late payment statements, dunning notes, etc., at least have a "financial arrangement" form (FAF) that let's your clients know you are serious about getting paid. The FAF should outline the treatment plan total, the deposit and the amount financed. It should delineate how long the balance will be financed, what the amount of each installment will be, what the late fee (after 30 days without payment) will be and the annual percentage rate for delinquent accounts.

    This is similar to any financial arrangement form or credit card form that you have completed in the past and should be reviewed by your attorney for enforceability as well as have a place for signatures and witnesses. Don't make this the first option, and make sure clients know it is not your first choice but a last resort to ensure that you can provide the necessary care to their pet.

    Having the financial policy and financial guidelines forms with the FAF provides you with the tools needed to communicate clearly that you really want to help clients. You have the knowledge, skills and desire to provide the health care, and now you have communicated to clients that not only can you solve their pet's problems, you also can help them with the financial problem that might force them to make a decision between life and euthanasia.

    NEXT: Canine Leishmaniasis: Clinical and Diagnostic Aspects

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