Pet Economics 101 Do high hospital profits and good medicine go hand in hand?

June 26th, 2008  

Add Comment20 Comments

I don't think its a given that expensive medicine is good medicine, for pets OR people.

On the other hand, large and profitable practices have money for things that CAN improve quality of care (whether they use the money to actually DO that is an open question).

For example, they can probably afford to pick up the cost of more training for staff.

They can probably better afford LVTs.

They may be able to afford expensive equipment like ultrasound machines.

They may be able to fund overhead activities directly devoted to improving and monitoring quality of care, establishing standards etc.

The big question is -- DO THEY?

Or is the profit just going in someone's pocket or being used as seed money for tangential side ventures?

I personally would like to see a TRUE patient safety and health care quality MOVEMENT in veterinary medicine. If profits went toward that, I'd be all for it. Otherwise -- I can't say there is any relationship.

Stefani June 26th, 2008 07:06:00 PM

Dr. Khuly, You must stare at your professional magazine in disbelief! What is really scary, is if there are like-professionals agreeing with all that "bs". Keep your well tuned business sense that you learned years ago.

Let's see, the premise is that "profits" equal good care; or "higher" prices equals good care? So, if I spend an absolute "bundle" getting my car repaired, I'm guaranteed the best quality job with no problems?
If, I go to the most expensive dentist in town, my fillings are never going to chip and fall out?

Having been in "both" places, I think I can say that money "has nothing to do with anything".
Are you sure this article/commentary wasn't tongue-in-cheek?

Barbara A. Albright/New Hampshire June 26th, 2008 07:16:00 PM

You're right that value drives consumer loyalty and willingness to pay for services. The other side of it is that there is a certain level of price sensitivity for all consumers, and you could argue that in certain locations veterinary medicine has become, more or less, a commodity.

While there are plenty of areas with limited veterinary resources, pet owners in large cities have many options within a short distance of their home. It is highly unlikely that the average pet owner is going to be willing to pay a large amount of money for pet care if there are acceptable, lower cost practices within a reasonable distance from the more expensive practice.

Sure, a certain level of customer satisfaction and trust in the vet comes into play, but it's much more likely that the average consumer will choose the lower cost alternative without overwhelming evidence that the quality of care suffers at the lower price.

Personally, I have chosen not to take my pets back to vets who (IMO) overcharged for their services. In those cases, I've been able to find a nearby alternative and was much happier with the level of service to be had at the lower price.

Posey June 26th, 2008 07:28:00 PM

Good medicine and profit should be a virtuous circle - but I don't think that necessarily solely means employing the most 'aggressive' treatments possible.

Like any business, it would seem that treating patients honestly and fairly (e.g. offering but not over-using expensive diagnostics and treatments) would help create good business outcomes like customer loyalty, referrals, and lower employee turnover.

Neil June 26th, 2008 07:32:00 PM

If I were a vet I'd be in the poorhouse. I'd feel bad about charging people for helping them make their sick pets well. Which is kind of dumb because I'm never hesitant to whip out my checkbook when one of my animals needs vet care...

Kristie June 26th, 2008 08:00:00 PM

It is just a first principles clash. Looking at the argument backwards helps.

Rather, the WRONG business thing to ever do is to sell something at a loss AND then think you can make up repeating that action in volume. (Sure, things can be offset with this-for-that accounting in the head, but that is different.)

WRONG business thing to do in this case can be measured with time, money, effort, morality, ethics, resources.

When one wants to flip the WRONG into a BEST, then one must pick those pieces that get the attention and getting them all at once is not automatic. Life does not work that way.

The best antidote to this is the famous book called the "E-Myth (revisited)". The small business owner is not called to be the hero. The perceived guilt felt by those thinking they must be heroic is fanned and exploited in many ways.

Jason Schroeder June 26th, 2008 09:07:00 PM

Interesting, thoughful comments. I didn't properly do justice to this commentary, by the way. In lending my blogger's cheekiness to the post I seem to have neglected to make clear that this internist-cum-economist debunked the myth of the high-profitability=good medicine. Interestingly (if anachronistically for the vet profession) he used the construct of the managed care vs. privatized medicine to make his points. If you think about it this makes sense. In each of those healthcare models the argument gets flipped. In the former, conservative, low-profitability medicine is rewarded as best medicine whereas the opposite is tue in the latter. Very cool piece. I wish I could've liked to it here.

Dr. Patty Khuly June 27th, 2008 08:48:00 AM

I tend to prefer conservative approaches to treatment, but the best thing of all is a vet who can lay out the options with pros and cons and advise a specific treatment plan without always insisting on it. It takes some time but I will pay extra for that.

emily June 27th, 2008 09:19:00 AM

My opinion is that medicine follows the same principles as every other commodity: you get what you pay for.

To assemble quality equipment, the facility, a trained staff, supplies and continued education is very expensive, and to provide the best that modern medical technology has to offer reflects that. For example, if you have a disease that needs an MRI for diagnosis (like your poor Sophie), then by the transitive property, money = better medicine. There is no way you can expect the same results from an old-fashioned cheap X-ray as you can from a new (very expensive) MRI. That is just the truth. This same property applies all the way down to the little things, like which brand vaccine you choose to cary, which brand syringes you carry, which brand needles you carry. Suddenly the "same" vaccine is more expensive at one hospital than another. Why? Because one hospital has chosen to spend just a little bit more for quality -- all up and down the line. This adds up, and the result is what the study found: higher quality usualy costs more. I am not at all surprized by that result, and I don't see a money-grubbing veterinarian behind it (regardless of what Stefani and Barbara think). If it were me receiving the vaccine, I'd rather have the more expensive one, just in case all those little improvements in quality add up.

Of course there are allways going to be bad apples who focus more on the profit margin than on providing a good service at a fair price, but you will find that in every huaman endeavor. It irks me that people focus only on these evil doers, and extrapolate that then, therefore, all veterinarians are the same. I'll be willing to bet that those represent the minority.

Paul June 27th, 2008 11:53:00 AM

A business is a business. The unique thing about veterinary medicine as a business is that there is no central governmental support (human low-income clinics and medicare/medicaid are funded by the government with the idea that no person should be denied necessary treatment), there is no wide-spread veterinary pet insurance program like there is with human medical insurance, there is no legal value placed on an animal's life as there is on a human's life, and euthanasia is always an option for pets that is not available for people.

You can provide the best, most top-notch most modern medical care services possible, in a brand-new beautiful hospital, but only the wealthy will be able to afford to go there. You can provide low-cost services and basic procedures, but unless you do an enormously high volume of business, you cannot afford to pay your staff competitive wages, and you cannot afford to offer the "extras" like ultrasounds or overnight care. If you attempt to strike a balance between making enough profit to pay your staff and maybe upgrade your XRay machine, you will offend the people who want low-cost services and payment plans, and you will annoy the people who want the whole shebang NOW for their beloved pet.

Human doctors are "allowed" to make large salaries after they "pay their dues" the first few years. Few people begrudge them the right to earn their pay, after all, they did go through medical school and residency and they work hard. This philosophy does not equate to vets, however. Vets are expected to work for the love of animals, but it's really hard to pay the bills with love. It's a harsh reality that this person who loves your dog and wants to make him better, won't do it without you paying them some money. It's antithetical to the conventional wisdom.

anonymous in boston June 27th, 2008 09:06:00 PM

I've recently seen the corollary to this- that the only good vets are cheap vets, because clearly they aren't in it for the money (look up Dr. Busby- "The Country Vet"- to find this in action).

Megan June 28th, 2008 12:58:00 AM

Cheap certainly does not equate to quality in my book. You must beware of Dr. Cheapvet who never offers x-rays, blood tests, normal follow up protocol, etc like those "greedy" vets who are after your money. Personally, I feel the vet should offer ALL options for the best possible outcome. It is then up to the pet owner to make an INFORMED choice on how cautious or risky, least expensive vs. most expensive. etc. in regards to their pet's care. NO Vet should be subconciously and /or silently judging their client's financial ability. ASK. Give the client the facts, costs, & choices to make the best choice possible. I know there are many out there who don't want to spend a penny more than they absolutely have to, but I also know of many who would spend whatever it takes to save their beloved pet.

Greg June 28th, 2008 02:05:00 AM

Busby? Are you kidding? I'll pass on that country vet, thankyouverymuch.

Over the years I have worked at several animal hospital and I've never worked at one that didn't offer owners all possible options. The hospital I am at now is a large referral/er place. Because we have the technology available, we will offer the gold standards of treatment first, but if the owner can't afford that, we try to work with what the owner can afford (partial blood panel instead of a full panel, going home with sub-q fluids instead of hospitalizing on IV fluids, oral meds over injections, or any combination thereof.) The owners are made aware of the pros and cons of the treatment plans offered. A large portion of my time is spent creating a treatment plan that the owner finds acceptable and will still benefit the pet. It can be very frustrating but my vets and I do this because we want to see a sick or injured pet get some kind of treatment until it can get to its family vet for further care.

robyn w June 28th, 2008 02:33:00 AM

Ahhhh, Dr. Busby: Never was the crotchety, self-serving mindset of a dying generation of piss-poor practitioners so epitomized. (Ooops, that was a little harsh....oh well....)

Dr. Patty Khuly June 28th, 2008 07:56:00 AM

Busby proves that low-cost, no-frills medicine IS bad medicine. Here's his censure and license limitation from 2002: http://www.vetmed.state.mn.us/portals/22/BusbyOrde...

anonymous in boston June 28th, 2008 12:21:00 PM

Some of the posters may be new to the blog, and have missed all my previous posts touting the receipt of "superb" and thorough pet medical care, I have received for more than one pet. And yes, it didn't come cheaply and was worth every "penny"! So to blanketly assume I am anti-good care or pro-cheap care is a misnomer.

Please see "Pearl" in the virtual hospital archives.

On the flip side, taking someone to the cleaners, over a dying pet proves the variety of care that is available (see my web site link). And to become "offended" over the "truth" and suggest that either Stefani or I are "anti- ethical pet care" can be viewed as offensive.

Barbara A. Albright/New Hampshire June 29th, 2008 12:36:00 PM

On Busby:

Thanks to the person who posted the link to his disciplinary order.

I write a blog on veterinary disciplinary actions, and was all set to feature him one night, when I found his "Old Country Vet" stuff. I gather from the implications of his statemetns that he believes the veterinary board has gone after him because he's going against the industry.

Now, I'm no fan of vet boards -- as I consumer, I believe they do too little to ever be taken seriously by veterinary licensees or to succeed in creating a deterrant to shoddy practice. I certainly think it's possible that vet boards could, in some cases would, retaliate against an industry fire-brand. BUT in the case of Busby, I don't think that's what occurred, no matter what he says.

When you read the disciplinary order, the details are shocking, and to my eyes, paint a picture of not merely low cost, but LOW QUALITY. Sanitation issues, and just lack of respect.

Here are some choice excerpts from the Minnesota Board findings on this Old Country Vet, which I believe shed light into his -- ahemm -- cost sparing strategies:

" . . . does not perform or offter to perform presurgical screenings . . . "
" . . . . relies on injetions of Vitamin K to control intra-operative bleeding without first determining the cause of the bleeding."
" . . . reuses disposable syringes."
". . . does not have gas anesthesia or oxygen in his clinic."
". . . saves contaminated pentobarbial left over from veterinary surgeries and uses it as a euthanasia agent."

If you think these are acceptable cost-saving measures when your pet is being treated, then it is safe to say, I think, that your attitude towards your pets is indeed, back on the farm, and back about 50 years.

However, most of us have evolved since then. Heck, most of us weren't even born back when this type of treatment was considered acceptable for companion animals.

High cost is no gurantee of quality, but if you have a particularly low cost vet, as the example of Busby illustrates, you need to do a little nosing around into exactly HOW s/he is keeping costs down. Horrifying.

Stefani June 29th, 2008 01:22:00 PM

PS -- on the flip side, I would like to say that the hospital where my cat was overdosed was one of the more expensive ones in the area based on consumer checkbook (still is), AND was AAHA certified (still is). At the board investigative conference, the owner acknowledged that they had not one solitary licensed technician on staff. He was allowing unlicensed assistants (I refuse to call them techs) give meds and treatments to patients UNSUPERVISED. An example of the opposite maxim to the Old Country Vet: Higher cost is no gurantee of quality, either.

It's all about the ETHICS of the practice, if you ask me.

Stefani June 29th, 2008 01:29:00 PM

I've had a post sitting in my draft folder for a while - I'm just ambivilent about posting it (especially since Mom gave out my blog to our old vet.) I really liked our old vet- we'd followed her from 3 different practices and quite a ways across town to stay with her for almost two decades. This past year she opened a shiny new facility very close to my parents' (very expensive) part of town. And it's a beautiful building, with an architectural-digest quality lobby and landscaping. But they are SO expensive- hip x-rays for Mal (that they didn't want to do as 'he has a perfectly normal gait!' (yes, but his breeder wants him prelim'd to rule it out since he's had this intermittant hitch, which was, as suspected, a growth phase) were going to cost over $400, and she no longer allows anyone to restrain their own animals- all procedures- including vaccinations and blood draws are done in the back. I don't mind allowing the techs to restrain my guys, but with her all-new crew of techs, I was NOT comfortable with them taking the dog in the back to do it- why would htey need to? (especially since my dogs are all excellent for handling- I have no problem sending the Demon Princess to the back for nailclipping, but object ot paying $30 + office visit fee for them to do that- she's bad but she's not THAT bad.) $60 for a microchip, $55 for a rabies shot- all of these high fees PLUS a $50 office visit, and it just started feeling like I was being nickled and dimed ot death- especially with her blase response during the food recalls, when I had lost a foster to contaminated food and Mal (with his every touchy stomach) had had some contaminated treats. $300 of bloodwork later (that I had to basically BEG to have done....) we've got a new vet.

I love our old vet, and our Venerable Kitty (age 17) still goes there. (Only fair- said vet hand-raised her as an abandoned kitten.) But money's definitely not everything. If I feel like I'm getting my money's worth out of testing, I'm all for it. I spend a LOT of money on my critters, and I try hard to be an educated consumer- that means watching closely and going in early when I just SUSPECT somehting is wrong. (I don't mind paying for tests that show nothing. What I mind is being charged through the roof for routine stuff and my caution being pooh-pooh'd as overcautious. My new vet *is* a 'farm vet' in that he takes care of horses in addition to small animals, and is located out in a (ruralish) suburb. But he's a LOT more willing to take time to listen to me when I explain that Indy's gait is just a little off, should we change his supplements, is he too young to worry about arthritis, etc, versus telling me that stiffness is normal in an older dog (Indy is not older, he's 7 and he's from a fairly long-lived corgi family- average AOD in his pedigree is 16.5 years.) And she wouldn't tell my mother Indy was fat, even when he WAS.

okya, now that I've ranted.... :P Great post!

Cait June 30th, 2008 10:16:00 AM

Cait, I didn't consider you post a rant at all, but an honest, objective, and thorough viewpoint of how a "clinic" may change over a period of time & you are very aware to notice it. BTW, I found the prices you quoted more than a tad high, particularly since my part of the country (New England) is often the lead in raising prices (for everything!).

Same as a lot of folk, I am becoming very concerned to be "priced out" of pet medical care. And from reviewing pet insurance standard payouts on particular procedures, I don't see it as a reasonable alternative (yet). Typical procedures have doubled or tripled in cost over the last 6-8 years, and my income has not!

BTW, I seem to remember Corgis at risk for IVDD, so your concerns of gait abnormalities aren't paranoid at all!!

Barbara A. Albright/New Hampshire June 30th, 2008 10:26:00 PM

Add Commment

Your Name:

CAPTCHA Verification