2014 AAHA State of the Industry highlights need to strengthen bonds
The collaboration between AAHA and IDEXX Laboratories to help veterinary practices thrive in any economy took another step forward during the AAHA State of the Industry address at AAHA Nashville 2014.
During the address, Michael Cavanaugh, DVM, DABVP, chief executive officer of AAHA, and Mike Erickson, Ph.D., vice president and general manager at IDEXX, revealed data about the veterinary profession's economic performance and discussed why some practices are growing consistently in mixed economic conditions while others are declining.
According to the latest data, the average annual revenue growth for animal hospitals was 5.5 percent. However, 23 percent of hospitals, known as “Outgrowers,” accomplished annual growth of 10 percent. Fifty percent of hospitals grew from 0-10 percent ("Growers"), and 27 percent had negative growth ("Decliners").
The State of the Industry further identified a fourth group known as “Consistent Outgrowers,” who grew their revenue more than 10 percent two years in a row.
According to Erickson, this year's findings support previous data released in 2013 showing that each practice can dictate whether or not it grows despite the economy.
“We can conclude you can’t count on the economy in order to drive growth in your hospital,” Erickson said during the presentation. "The Outgrowers are doing it by taking growth into their own hands."
AAHA and IDEXX drilled deeper into the data this year to determine specifically how Consistent Outgrowers are succeeding, and here's what they discovered.
How are some hospitals consistently outperforming their peers?
AAHA and IDEXX conducted a survey with 202 Outgrowers, Growers, and Decliners to learn what financially strong practices were doing to maintain consistent revenue growth.
The survey revealed that Consistent Outgrowers are more likely to focus on four bonds: Pet and Owner Bond, Practice and Client Bond, Practice and Patient Bond, and Veterinarian and Staff Bond.
The two organizations then examined how Consistent Outgrowers view these bonds, and identified 16 statistically significant success factors that help them strengthen bonds and support growth.
Pet and Owner Bond - Consistent Outgrowers are more likely to:
- Believe this bond is very important to their hospital’s success, compared to many decliners who do not.
- See themselves as having a critical role to strengthen the bond.
- Describe their clients as “partners in providing the best care possible for their pets.”
Practice and Client Bond - Consistent Outgrowers are more likely to:
- Invest in community events to build their local reputation.
- Use outside client marketing software.
- Offer care payment plans.
- Share something after every visit to show value (e.g., visit report card).
- Forward book the next visit.
- Follow-up with client after the visit by phone or email.
Practice and Patient Bond - Consistent Outgrowers are more likely to:
- Provide a stress-free environment.
- Review complete diagnostic history for pets.
- Trend diagnostic results to detect changes relative to established baseline values.
Veterinarian and Staff Bond - Consistent Outgrowers are more likely to:
- Set goals and measure progress.
- Conduct daily rounds and staff stand-up meetings, to facilitate sharing and alignment.
- Invest in practice management technology and improvements in work flow that make it easier for staff to do their jobs.
- Commit team to higher standards, including AAHA accreditation.
By working on improving these bonds, Erickson said the veterinary profession should produce more Consistent Outgrowers.
“Your practice is stronger when you strengthen the bonds,” Erickson said.
AAHA and IDEXX will release the full study in a white paper later in 2014, but the State of the Industry fact sheet is currently available on AAHA's website.