10 Nov 2024
It is often said that money makes the world go round – just not in most veterinary practices. A lot of vets don’t like talking about it and clients don’t always like handing it over, but there are ways of using tech that can ease this friction, as Oli Viner explains…
Oli Viner
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Image: Jenny On The Moon/ iStock
I do not think I have ever met a vet who likes charging for their services. That’s not to say that most don’t believe that what we do is valuable, nor that they don’t understand the business necessity of generating revenue. It is just not very British to talk about money, and, especially in this country, to talk about money when it comes to health care.
With most human health care services free at the point of use, the general public has little understanding of the costs of delivering individual medical services. Add to this the spotlight from the Competition and Markets Authority (CMA) investigation, and veterinary price inflation running at more than 10% for quite some time (tinyurl.com/4fcmcfhx) and we have the combination of expensive services, being delivered by clinicians who don’t enjoy pricing, coupled with an increasingly price sensitive population.
While that may all sound a bit bleak, the good news is technology and business processes can do some things to reduce the pain felt by clinic teams. We can break the problem down into two steps – billing/invoicing and payment itself.
We can’t get payment right if we don’t first get the bill correct in the first place. Often, one of the trickiest things to do when “on-boarding” new team members is to train them in the billing structure. While it may have seemed sensible to whoever designed it, working out what particular combination of words to type to find the fee to bill for “ear cytology” can sometimes be a dark art. On top of that, working out which fees include what things is occasionally left completely to chance.
Does pricing up a splenectomy include the anaesthetic or do I need to bill that separately? Does a fixed price neuter include pain relief, and if so which ones? When this fee code says “Ambulatory visit (close)”, how far exactly is close?
Generally speaking, being able to group individual fees into larger bundles is really helpful here. Some practice management systems allow for bundling of fees, and then various options within those bundles, creating recipes of sorts for billing. This means that you don’t have to remember to price 10 different items when you want to price a surgery, you just have to price one and remember which boxes to tick for which bits of the recipe you used.
There is a downside to this approach – you do lose some flexibility. Over time as well, price lists encounter drift. Us in the veterinary sector love an edge case, and we will always find a good reason to add yet another fee to an already bloated price list. This ever-expanding list becomes harder and harder to use over time, which adds to frustration. Having the discipline to keep price lists as small as possible can add benefit in the long run, even if that very particular edge case is not accounted for with a perfect fee.
One thing is for sure, however – the more effectively we can display the value of the services delivered to the client at the point of billing, the less likely we are to encounter queries on the bill down the line. You can find a sweet spot here – itemising for every last syringe and glove may make things worse, but having a single line item of “fixing the cat” and charging £2,000 probably isn’t going to make your client happy, either. A good invoice should break out what was done to a reasonable level of understandable detail such that it reduces follow-up queries.
Once you have battled with your PMS and you have a wonderful invoice, you now have to get the client to pay for it. In most clinics, clients can either pay in person or remotely. In-person payments may involve cash or cheques, but increasingly the volume has shifted to almost entirely card payment or bank transfers. As a business, one should question the value of taking anything other than card payments, in part because of the work required to manage the other methods. Cash and cheques need to be manually checked, counted and taken to a bank, and all of these steps take time and have the risk of error associated with them. Fraud risk also increases, especially with cheques and large bank notes.
The time taken for teams to manage payments should not be underestimated. Every action has a time cost, and I am not sure balancing the till is anyone’s favourite activity. While experienced staff may excel at this, lots of inexperienced team members may take considerable time and incur errors, adding half an hour or more of administrative time per day, even before the trip to the bank.
The advantage of taking card payments is the very low requirement to do any counting or physical bank visits. There are many ways to take card payments, from “dumb” terminals to smart integrated terminals that speak to your PMS, as well as remote payment services that allow payment links to be sent to clients.
In their simplest form, a card reader has a payment amount entered into the display manually, a client taps their phone or card and that amount hits the business bank account a few days later.
At the end of the day, the total can be spat out by the machine and each item reconciled with a particular transaction on the PMS. This way of taking funds solves the issue of needing to visit the bank and count cash, but still has the possibility of errors in entering sums on to the card reader, as well as having to manually reconcile each item against the PMS payment list at the end of the day.
A step up from a standard terminal is one that integrates with your PMS. Some systems have relationships with particular payment providers (such as Covetrus with Clover), some allow full open integration with third parties like Stripe (for example, Vetspire), while others even provide their own proprietary payment platform (like NordPay by Nordhealth/Provet).
This process works a little differently to the aforementioned one. Instead of manually entering a payment amount on a terminal, the payment amount can be directly sent to the terminal itself from the PMS. The card reader tells the PMS when payment is taken, ensuring the amount marked as paid off against an invoice will match exactly what the client paid on the terminal. This leads to a massive reduction in where errors can occur, as well as reducing the workload required to reconcile payments at the end of a shift.
Commercial relationships are likely between the payment providers and the PMS companies, but while rates may initially seem higher than the “dumb” terminals, I would not underestimate the time and error costs. An average transaction value at a clinic of £100 means a 0.5% difference in fees is 50p. While this may seem like a big hit to the bottom line, it is the cost of only a few minutes of admin staff time. This can easily be saved through automation as well as fraud reduction.
A slightly less well trodden route is that an integration can be created manually – if a PMS has an open API, this allows a tech savvy business to integrate with the payment platform of their choice and get all of the functionality exactly as they want it. This requires technical expertise, but again shows the potential power of picking forward-thinking systems with open APIs, including around payment flows. It is possible the provider your PMS works with is relatively expensive, and being able to integrate directly could save money in the long run.
Taking payment asynchronously – sending a payment link via SMS, WhatsApp or app message – can provide a more streamlined experience for both customer and clinic. If a patient is in for the day for a procedure, a payment link can be sent in advance before collection using a system such as Digital Practice or PetsApp.
These systems also integrate with the PMS, as well as allowing clients to use their mobile phone and an integrated payment provider like Apple Pay or Google Pay. A client can effortlessly pay securely in just a few taps.
Evidence from sending payment links shows that clients tend to pay them rapidly and are happy paying even large amounts this way. Large advantages exist versus taking payments over the phone, which are highly insecure and often incur punitive “cardholder not present” charges.
A message doesn’t require a client to be free and available for a call, nor to have their card to hand, which is why compliance is so high. The time cost of a clinic having to make calls to collect payments will likely dwarf any additional fees of using a payment link provider.
Other advantages are as follows:
One last option that is available through using payment platforms is the ability to configure recurring payments or payment plans. Over time, methods like splitting payments may come built into the payment providers, using something like Klarna or even their own services. This means that a surprise large vet bill could be split, with the payment provider taking the risk and owning the debt for a percentage fee on the bill.
Recurring payment allows a clinic to be able to generate ongoing revenue for subscription services, potentially without the intermediary of a health plan provider. A clinic may also have other products and services it chooses to offer via monthly payment (for example, access to Vidivet or all-you-can-eat consults) that could sit outside of a health plan offering. It is becoming increasingly easy to allow customers the flexibility of making recurring payments.
