Revenue generation: A team affair

Recently, a post on LinkedIn told the story of a veterinary technician who returned to work after parental leave and asked her manager for flexibility in her work schedule to accommodate her new responsibilities as a parent. In this instance, the manager responded that while such flexibility was offered to veterinarians at the practice, she was not eligible for it in her role as a veterinary technician because she was not a “revenue generating” member of the team.  

This phrase really got me thinking: What does it mean to be “revenue generating?” And how should we look at the contributions each member of the team makes to the success of the practice? 

To explore these questions, I spoke with three experts: Karen Felsted, CPA, MS, DVM, CVPM, CVA, owner of PantheraT Veterinary Management consulting; Debbie Boone, BS, CVPM, President of Debbie Boone Consulting, LLC; and Cory Awerbach, CVT, a veterinary support talent partner for Veritas Veterinary Partners. They each shared their insight and experience from having worked in the trenches and managed veterinary teams.  

Veterinarians as revenue generators 

To help understand how veterinarians have come to be known as the primary revenue generators in a practice, Boone pointed to veterinarians who have served dual roles as doctors and business owners.  

“Looking back at 40 years of history, working in practices, it comes from the practice owner model that says, I am the practice owner, and therefore I am ultimately responsible for everything that happens in this building,” Boone said. “And if I am the only doctor in the building, then everything is driven through me. And that’s the kind of model that we’ve had,” she added.  

She said that as these practice owners started hiring associate veterinarians, they used a productivity model—keeping track of the goods and services provided by the veterinarian—to determine how much to pay them. “And then that’s how [veterinarians] got to be the revenue producers,” she explained. 

Felsted added that the legal responsibility veterinarians face, both to their clients and their licensing board, has also likely contributed to much of the revenue being attributed to them. 

In a thought experiment of sorts, Felsted imagined a multi-doctor practice staffed with only veterinarians. She pointed out that veterinarians are essential to keeping the doors of the practice open because no other team member is allowed to diagnose and treat patients.  

“Without veterinarians, you can’t have a business,” she said. “But,” she quickly clarified, without other team members, “it would be a terrible practice” in terms of efficiency and revenue generation.  So, while veterinarians are essential for a functioning practice that brings in revenue, non-veterinarian team members are just as essential for making that practice profitable.  

Team member utilization to drive revenue 

The revenue-generating contributions of non-veterinarian team members have been studied. A 2010 article in the Journal of the American Veterinary Medical Association summarized the results of a survey sent to US veterinarians in 2008. The results indicated that each increase in the number of credentialed veterinary technicians per veterinarian resulted in an increase in gross practice revenue of $161,493. 

Boone said that the main reason non-veterinarian team members aren’t associated with more revenue generation is that not all practices fully utilize the skills and capabilities of other team members efficiently.  

Additionally, most production models don’t track non-veterinarian team members’ contributions to revenue. 

“We’re not leveraging [credentialed veterinary technicians] to the top of their license,” Boone said. “If you are leveraging them to the top of their license, they should be seeing rooms. They should be driving revenue,” she added. But she added, “We’re [solely] tracking doctor productivity when we are looking at invoicing… We’re not tracking what part the technician did under their key or what part the receptionist did under their key.”  

Awerbach said he is starting to see this change as some practices experiment with offering production-based bonuses for their non-veterinarian team members. “It’s all new,” he said, “There’s no proof of concept.” 

Acknowledging the importance of all team members 

Whether it’s being tracked or not, Boone explained that it’s important to acknowledge how each team member contributes in an essential way to hospital revenue.  

This starts with the receptionist or client service representative (CSR). “If you think about it from the very beginning of the customer journey, if the receptionist does not give a good impression of the hospital, nobody else gets to do any work at all because that’s where it starts,” she said.   

“A good receptionist drives revenue because a good receptionist can convince a brand-new customer to come in the door. They can convince a client that they need to be seen when they’re sitting on the fence about whatever’s going wrong with their pet. And if you look at it starting there, they drive revenue because they open the door and say, ‘Come in.’”   

In other words, non-veterinary staff can serve as the foundation of a good business—and that’s priceless. 

“Front office people lay the groundwork for the wellness plans, for senior care blood work, all those things,” Boone explained. “So it’s a team effort. It starts here at the front desk and then the technical team picks it up. And the client says yes or no in the room. But then, even coming back out again, if they don’t accept something, then it’s possible for that front desk to say, well, you didn’t get it this time, but I can always schedule that for the next time. Or let’s talk about this prescription food and how important it is.”  

Seeing the bigger picture 

As a recruiter for specialist veterinarians, Awerbach gave the example of a veterinary practice deciding whether to hire a board-certified anesthesiologist.  He said that one of the arguments against this is that anesthesiologists are not considered to be revenue generating. “They’re not people that bill out. They’re not like a dermatologist that sees appointments,” he explained.  

The key, he said, is to look at the “bigger picture,” meaning all the advantages an anesthesiologist brings to the table. “It’s a big attraction to doctors and bringing them aboard,” he said, adding that having an anesthesiologist in the practice can also help elevate the skills of veterinary technicians and improve efficiency in the practice. In addition to serving as a recruiting perk for doctors and an efficiency tool for the whole team, anesthesiologists can also differentiate the practice in the eyes of future clients.  

“A lot of owners inquire about the price [of a surgical procedure] and we’d say, you can go to John Smith’s clinic down the road. But one of the reasons why we’re a little bit more expensive is because we have a board-certified anesthesiologist,” he said. 

“The value really is in the eye of the beholder. If all you’re looking at is who charges money, then you might think [anesthesiologists] are not generating revenue. But in reality, they are,” Awerbach said.  

And the same line of thinking can be applied to non-veterinarian team members, he added. “None of that revenue can be generated without those people in those positions.” 

Looking forward 

Felsted, Boone, and Awerbach all agreed that ignoring the revenue generating contributions of non-veterinarian team members—and treating them differently as a result—is harmful.  

“I think it devalues the rest of the clinic,” Awerbach said.  

“We are saying to some people, yes, we don’t value you as much as we value people who have DVM after their name,” Boone added. “And that should not be the case. Everybody is valuable.”  

Boone said that models for tracking production and revenue, even though they’ve been largely the same for decades, can be changed. “There are definitely parameters that are out there in the universe that we kind of feel like are set in stone that we use as a model,” she said. “But that doesn’t mean we have to keep them. We can change the model.” 

Further reading 

2023 AAHA Technician Utilization Guidelines 

Contribution of veterinary technicians to veterinary business revenue, 2007 

Photo credit: ArtistGNDphotography/E+ via Getty Images 

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