Discounting Veterinary Services: The Good, the Bad and The Ugly

When vet business owners use discounts thoughtfully, they can be powerful tools to drive increased revenue, smooth cash flow and enhance patient care.
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Offering a discount on pre-season soundness exams is an example of a "good" discount.

The definition of the word “discount” in the Merriam- Webster dictionary is: to lower the amount of a bill or price; to lower the price of a product or service; to think of something as having little importance or value. Discounts can have a place in veterinary medicine, but you never want your clients to think of you or your services as having little value!

Scarcity of Time

In veterinary medicine, we are limited in the volume we can produce because we have only our time to sell, and time is finite. This limitation on our time is the same as scarcity, and so has the potential to create value if we manage it with intention.

Vets are generally compensated for the professional services they “sell” based on their education and clinical experience. Our services do not change much from year to year. While we utilize pharmaceuticals and diagnostic equipment, those are simply tools of our trade. We need to be paid sufficiently to fully cover the costs of having these tools at our disposal, but truly it is what resides in our brains that gives us value.

The equine vet industry has slow times of the year and insanely busy periods. These seasonal variations create cash-flow ebbs and flows that can be difficult to navigate. “Good” discounting gives clients incentives to seek services during months when the vet team is not working to capacity, and ideally results in greater overall revenue and better patient care. By performing examinations when there is less time pressure, more comprehensive communication and care is likely.

An example of a “good” discount would be the offer of 10% off of a soundness exam performed before the beginning of the active competition or riding season. A conversation with the owner, trainer and/or rider could ascertain the season’s objectives and a schedule of important competitions or events. Appropriate time points for re-evaluation of potential problems or chronic injuries could be planned, and a rational conditioning schedule could be discussed to meet expectations while avoiding injury. With all of these activities taking place before the crunch of the busy season, clients would likely benefit from a more relaxed and attentive veterinarian. As a result of this focused attention, the value they place on this service would be enhanced.

Giving the horse owner incentive to request these services in a different time period by offering a slightly lower price will accrue a number of benefits. Cash flow is enhanced; the available capacity of the vet team is utilized in a more balanced way; and the quantity, quality and value of the service received is maximized.

Wellness Programs

Another example of discounting that is beneficial is the bundling of services into a wellness program. Many practices find that providing a small discount on the price of an annual package of health services can improve compliance, increase revenue and build client loyalty.

Bundling an annual physical examination, a geriatric or athlete blood panel, a quantitative fecal, and dentistry with recommended vaccines can enhance a patient’s health care as well as build additional revenue streams from services that might otherwise not be performed.

Bad Discounting

Typically, “bad” discounts are unplanned, and they often follow difficult conversations or poor communication. Vets are generally caring, empathetic people who want to help animals and the people who love them. Who among us hasn’t given away a bottle of antibiotics or changed a bandage for no charge?

We perceive that clients can’t afford care. We forget that horses are luxury items, not basic necessities of life. We forget that discounts come directly from a practice’s profit, and that our families and employees are depending on our ability to maintain a profitable business in order to remain sustainable into the future.

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Compassionate discounts can be allocated per vet so they aren't a surprise to the bottom line.

Compassionate Discounts

One of the best ways to deal with the need of vets to give compassionate discounts might be to establish annual discount accounts for each veterinarian.

Practice owners decide each year how much each veterinarian is allowed to give away, so they can budget for it. It might be $100 or perhaps $1,000 per veterinarian. This benevolence becomes a planned discount with a known cost to the practice.

Complaint Discounts

The worst discounts are those that a vet hurls as a defensive shield against client complaints. Some horse owners use complaining about fees as a way to reduce costs, because most vets dislike talking about money. The more uncomfortable a vet becomes in the conversation, the higher the discount he or she is likely to offer.

Each time a discount to services already rendered is given in response to a client’s complaint, it has the same effect as the vet taking out his or her wallet and handing over money. Unfortunately, these clients become trained to expect a discount every time they ask for one. They begin to perceive that the services they received for their horses are overpriced.

When faced with a client who utters the words “mistake” or “malpractice” (even when there has been nothing remotely amiss), many vets simply forgive the bill. Obviously, if upon review of an invoice and the medical record an adjustment is deemed fair to both parties, it might be appropriate to adjust the fees charged. However, the decision should not be made from an emotional stance, but from a financial, business-focused position.

Take-Home Message

Becoming more comfortable with conversations about fees and feeling confident in the value of your work often comes with experience. Seek training in business and communication to help you address discounting issues. When a vet truly understands revenue, expenses and profit, unplanned discounts generally cease.

When vet business owners use discounts thoughtfully, they can be powerful tools to drive increased revenue, smooth cash flow and enhance patient care. The danger comes when vets lower their prices without a sufficient understanding of the impact on their practices’ profitability or use discounting in reactionary ways. 

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