Setting fees in a Veterinary practice is no walk in the park. It’s one of the trickiest tasks a practice owner faces. Charge too little, and with rising costs, your profits dwindle to the “running on fumes” zone (not fun). Charge too much, and you risk being labeled “that overpriced clinic” in your community. Just match the practice down the street? Good luck – my experience has been that they have NO idea what they’re doing, either, and they’re “winging it” just like you!
Finding the sweet spot—fair to clients, sustainable for the practice—takes some real thought. It takes a system approach to get it right and hit that “Goldilocks Zone” of not too hot, not too cold. Here are my thoughts.
The Current Scene
Today’s climate adds extra spice to the challenge. Veterinary incomes are up, but office visits are down. Some opinion leaders claim fees have gotten too steep, pushing clients to skip annual wellness exams or dental cleanings. Then there’s the rise of pet owners Googling advice instead of visiting the clinic, plus prescriptions shifting to online pharmacies. Sound familiar? In my 40 years of practice, these trends aren’t new—they’re just part of the game. The real key is:
A) Pricing fees in that “Goldilocks zone”—not too hot, not too cold, but just right for clients and the practice.
B) Presenting patient care plans (PCPs) professionally, using a dedicated Client Care Coordinator to boost compliance and ensure pets get the care they need.
I’ve seen it firsthand: clients might balk at an estimate, not because it’s “too much,” but because they haven’t thought creatively about how to pay for it. As an example, a client presented her two-year-old Pekingese to us after being hit by a car. He looked pretty good, wagging his tail, but his right eye was outside of the orbital socket and needed replacement. She balked at the patient care plan estimate (chest rads, anesthesia, surgery) estimate saying “I don’t have that kind of money, we should just put him to sleep”— dreaded words for any veterinarian to hear.
The veterinarian, a skilled communicator, while quietly saying to herself, “Not on my watch,” proceeded to interview the client, asking creative questions like, “Do you have pet insurance, family etc.?” and finally, “Do you have a credit card?” at which the client responded, “Yes, but it’s only for emergencies.” When the DVM responded kindly with “This is an emergency,” the client produced the credit card and authorized the procedure. The surgery was performed successfully and two weeks later, she returned for the re-check with a large bouquet of flowers for the DVM. Gratitude for doing the right thing.
There’s a big difference between “That’s a lot of money” and “I can’t afford it.” Your job is to help them bridge that gap.
Past Pricing Models
Back in the day, fee-setting was a mess. Some practices tied exam fees to random benchmarks, like the cost of a postage stamp, then raised other fees until clients grumbled just enough to notice. Others judged clients by their shoes—work boots meant “broke,” shiny loafers meant “spendthrift.” Spoiler: that’s nonsense. One of my best clients, who never blinked at costs, owned a gravel quarry with fat government contracts. Meanwhile, some “shiny shoe” folks were leveraged to the hilt with real estate deals and no spare cash. Stockbrokers? When the market was up, they waved off estimates. When it crashed, they’d haggle over a $12 nail trim.
Even AAHA’s attempt at regional fee schedules fell short—too broad, not tailored to the micro-communities each practice serves. Most folks ended up doing what they’d always done or copying the clinic down the road. Not exactly a strategy.
The Dilemma
Here’s the rub: you have to charge for services to keep suppliers paid, staff fed, and the lights on. But overcharge, and clients might not come back—or worse, they’ll jump ship after a “sticker shock” bill. (Been there, done that, and it stings.)
You might even start second-guessing your own fees, avoiding the front desk to dodge fee disputes.
Discounting Pitfalls
If your fees aren’t rooted in a solid system, your confidence wanes. Next thing you know, you’re slashing prices at the first sign of an upset client.
Discounts creep in, and soon you’re giving away services like free samples at a grocery store. Not sustainable.
Conflict of Interest
Here’s a hard truth: as a diagnosing DVM, you shouldn’t be the one presenting PCP estimates. It’s a conflict of interest, in my opinion.
You’re in the exam room recommending what’s best for the pet, but when a client raises an eyebrow at the invoice, what do you do? Drop charges? Skip procedures? Give stuff away? That’s a lousy spot to be in.
Client Care Coordinator to the Rescue
Your job is to create a care plan you’d follow if the pet were yours, money no object. Then, exit stage left. Hand the estimate to a trained Client Care Coordinator who can present it, handle questions, and address objections.
This keeps your focus on medicine, not haggling, and ensures the pet gets the prescribed care. Plus, it lets you move to the next patient efficiently.
Price Matters When Understanding’s Missing
Here’s a golden rule: price only becomes a problem when clients don’t get the value.
Misunderstandings or unclear explanations jam their decision-making. I once sat next to a couple on a flight who’d switched from a top-notch AAHA cat hospital to a cheaper (and lower quality) practice after a $1,200 dental quote. They kept saying, “My dentist only charges $125 for a cleaning!” They didn’t grasp the difference in care quality, and their cat paid the price with a medical disaster. Likely, the invoice was loaded with jargon, clouding their understanding. When that happens, clients just stare at the bottom line.
Start thinking: It’s not the price, it’s their understanding.
A Better Way: The Fee-Setting Model
How do you set fees that hit the mark? Here’s the light bulb moment: anchor them to the Median Disposable Income (MDI) of your community. MDI is the after-tax income families have for essentials like food, shelter, and—yes—pet care. It varies widely—rural areas might average $30,000/year, while high-income zones can exceed $200,000. By aligning fees with MDI, you land in the “Goldilocks Zone”—not too high, not too low, but just right.
Here’s the system in action:
Step A: Check Your Current Average Client Transaction (cACT). Use your Practice Information Management System (PIMS) to calculate your cACT (total revenue ÷ number of transactions) over the past six months. This reflects your current fee structure.
Step B: Compare Current ACT to Ideal ACT. In the Practice Potential Analysis (PPA) – PRACTICE POTENTIAL ANLAYSIS (link) – input your cACT. The PPA’s formulas will compare it to your Ideal ACT (iACT) and recommend a corrective fee adjustment.
Step C: Apply the Adjustment. If your fees are, say, 20% below the ideal, increase them across the board by 20%. No hesitation, no staff debates—just do it.
Step D: Update Quarterly. Schedule fee reviews every quarter (March, June, October, December) and raise fees by 2-3% to keep up with rising costs and support staff raises and protect practice profits.
After using this system in thousands of private practices, I’ve come to the conclusion that’s it’s pretty darn good and better than what currently exists (nothing) in the market. Is it perfect? No, but it’s practical. As we said in the ‘70s about tuning guitars by ear, it’s “close enough for rock ‘n’ roll.”
Action Items
- No surprises at checkout. Clients should never be shocked by the bill (except in a good way). Their power of choice is sacred.
- Clear the fog. Ensure clients leave the exam room with zero questions about the PCP. They shouldn’t be asking the front desk for clarification.
- Present a slightly high estimate. Get client agreement on a plan that’s a tad above what you expect to do.
- Ditch the jargon. Invoices should be clear, with no medical terms that confuse clients.
- Handle objections privately. Use solid communication to address concerns while prioritizing the pet’s care.
- Under-promise, over-deliver. Final invoices should come in below the estimate. Clients leave happy, book their next visit, and spread the word.
- Set fees systematically using the Practice Potential Analysis.
Wrap-Up
Setting fees can feel like a chore you’d rather shove to the back burner. But with this approach, you can hit that “not too hot, not too cold” zone. Correct your fees to your MDI and pair them with a skilled Client Care Coordinator to guide clients through estimates, and you’ll boost PCP acceptance, ensure pets get top-notch care, and keep your practice thriving. No more guesswork—just a system that works.
P.S. Proper fees are just half of the equation for practice profitability. The other half is having enough clients and patients flowing through your practice. That’s the job of external and internal marketing and a story for another day.