Inside AAHA: June 2021

AAHA board member Cheryl Smith, CVPM, discusses the essential nature of keeping track of inventory. New section, “Next Up for AAHA” alerts members to recent and upcoming changes in the association, a reminder to plan your Connexity experience, and Dear AAHA answers the question of how to dispose of an old X-ray unit.

View from the Board

The Essentialness of Inventory

INVENTORY MAY BE THE LEAST SEXY PART of running a veterinary hospital; however, it is vitally important to manage for the overall health of your business. After payroll, cost of goods sold (COGS) represents a hospital’s largest expense and directly affects the bottom line. The “sweet spot” of inventory management is not running out or having too much of an inventory item for hospital use and client sales. Everyone in the hospital should be involved in keeping the inventory at optimal levels, and developing standard operating procedures (SOPs) for the entire process is critical for success in inventory.

Each hospital should develop an SOP for the process of evaluating and vetting potential additions to hospital inventory. Often, this could involve the medical director initiating discussion with the medical team on which supplies and products will provide the best care for their patients and clients. It is important to limit the number of brands of the same classification of drug. For example, if you carry every type of heartworm or flea and tick preventive, it makes it difficult for your team to make solid, consistent, well-researched< recommendations to clients already bombarded with ads and, sometimes, questionable advice. It is important for your clients to trust the confidence you have in your recommendations.

After the medical team has settled on the product list, it’s time to order! First, practices should consider pricing. Best pricing is always a factor in business decisions, especially inventory. Practices should negotiate and take advantage of every resource available to ensure they are not overpaying. Discounted buying groups exist for nearly every practice. AAHA Advantage is offered to our accredited members and offers lower pricing and rebates. There are also applications that will take your shopping list and indicate which distributors have the best pricing on the order date.

As you consider where to place your orders, keep in mind that the distributor and pharmaceutical company representatives are always interested in making hospitals aware of new products and special pricing. While it is not prudent to take advantage of every offer presented, it is important to nurture partnerships with people who are familiar with the inner workings and challenges of running a veterinary hospital. I am personally very thankful for one of our representatives who came to me in January of 2020 and said that though he did not have specific guidance, he was getting a feeling that the supply chains of goods from other countries could begin to slow down or evaporate. He specifically mentioned PPE and other essential hospital supplies. His recommendation did not include specific products and order quantities; however, we heeded his advice and were able to weather the subsequent shortages a little easier. It was all thanks to our strong relationship with a trustworthy and knowledgeable distributor representative.

Everyone on the team must understand their important role in the inventory process. Systems need to be in place to indicate reorder points and maximum quantity levels. Some practices use colored stickers and organization systems while others rely on staff to indicate stock or needed items on a “want list.” As the items are received at the practice, protocols should be in place to ensure that the correct items were ordered and received, expiration dates are noted, and duties are segregated—the staff members receiving the goods vary from those placing the orders—to prevent theft. To ensure accuracy of our inventory, we conduct periodic physical counts and audit the records for complete analysis of correct quantities, pricing, markups, and dispensing and injection fees. Discrepancies that cannot be reconciled, or “shrinkage,” is a problem at many hospitals and may be attributed to undocumented hospital use or client items that were not invoiced. To combat the latter issue, we have settings in our practice management software that require a prescription label on all client sales items and alerts staff to check the invoice if the label is missing. Sadly, theft can also be the reason for missing items.

We all can profit by digging deeper into our inventory policies and procedures. Please use the article in this month’s Trends to guide you to lower those COGS and get control of your second-largest expense category!

Cheryl Smith
Cheryl Smith, CVPM, is a director on the AAHA board and is hospital administrator at Galway Veterinary Hospital, PLLC, in Galway, New York. Smith became a certified veterinary practice manager in 2009, and she graduated from the Veterinary Management Institute in 2011.

Next Up for AAHA

AAHA Standards Updates

We continuously update the AAHA Standards of Accreditation to reflect best practices in the field. Updates go into effect on June 1. See what’s changing.

Say “Hello” at VMX!

Stop by the AAHA VMX digital booth June 5–9 for exclusive AAHA Press specials and more.

AAHA’s Renewed Focus on Purpose

Hold on to your seats, AAHA members! The association has a new strategic plan and a renewed focus on the “why” behind what brought you into the profession to begin with. We are launching some bold initiatives in the coming year, and members will be the first to know—to give feedback and to benefit from our pilot programs that are sure to shake things up. Are you ready to join us? Renew before June 30!

Review Your Staff List

Is your staff list current? Ensure your team members are receiving their AAHA member benefits by logging into your account.

#AAHADay Is Next Month

Your team still has time to do something special to celebrate July 22! Get inspired and download social media posts.


Plan Your Year of Connexity

Save the Date! Sept. 22–25 in Scottsdale

After an all-virtual event in 2020, the in-person Connexity conference returns to Scottsdale, Arizona, this September. And, after a few years as an AAHA members-only event, Connexity is once again open to all in the profession.

“This year’s Connexity combines the things you loved about the old AAHA yearly conference with fresh approaches to CE and a forward-looking, inclusive vision,” said Erin Parrott, CMP, VEMM, AAHA’s senior manager of meetings and events. “Above all, it’s about providing spaces for the profession to grow and co-create together.”

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Virtual Connexity All Year Long

Last month, AAHA invited the whole profession to play in a free, virtual, mini-Connexity, including a game show–style showdown, a crowdsourced brainstorm on hospital staffing, and a session on how to reclaim your happiness in the profession. In lieu of a registration fee, donations were made to BlackDVM Network.

Connexity’s second virtual mini-conference is slated for November 10. Make your plan to attend the in-person, virtual, and on-demand sessions.

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Dear AAHA

Dear AAHA,

How should we get rid of an old digital dental X-ray unit?

—Cleaning House in Minnesota

Dear Cleaning,

X-ray machines contain dangerous substances such as lead, beryllium, and polychlorinated biphenyl–contaminated oil, so consult your state’s radiology safety department to see if certified personnel are required to remove the old unit. The vendor must disable the machine properly, and you’ll typically need to submit some paperwork and notify the state within 30 days. If the unit is truly broken, there are disposal services and medical equipment recycling services available. Another option, if the machine is still usable, is to donate it to Project V.E.T.S., which does accept older equipment for a tax-deductible donation. However, you would likely have to cover shipping costs.

—AAHA’s Member Experience Team

Have a question you’d like AAHA to answer? Email us at [email protected].


AAHA Meetings and Events

AAHA is closely monitoring developments related to COVID-19 and we will continue to follow recommended public health guidelines leading up to all scheduled AAHA events.

Updates to AAHA Standards
of Accreditation go into effect

June 1

Veterinary Management Institute

July 10

AAHA at VMX Virtual

June 5–9

AAHA-Accredited Hospital Day

July 22

Final day to renew AAHA memberships

June 30

 


Register for a learning program and learn more about AAHA’s upcoming events.

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