The Business of Wellness Programs

One practitioner walks you through his wellness plans and his reasons for creating them.
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Implementing wellness packages helps veterinarians, clients and staff become invested in the practice’s mission to help horses and people.

Offering preventive health care for horses is often a major practice builder. Many practices provide these services piecemeal, doing what the client requests plus whatever else the practitioner recommends at the time of the spring and fall veterinary visits.

There is another strategy that provides added security, ensuring that clients follow through on their horses’ health care while also providing a guarantee for ongoing practice revenue: wellness programs.

“The first step is for the veterinarian to decide why they want to implement a wellness program,” said Ben Buchanan, DVM, DACVIM, DACVEEC, of the Brazos Valley Equine Hospital in Navasota, Texas. This is important for ensuring that a consistent message is generated within the business that encourages staff and associates to help support the program. “If there is not a goal or a vision about why to implement these packages in the first place, then there could be confusion with staff telling different things to different clients,” he added.

Buchanan has found that with a clear vision and message, his staff members “buy into” the idea of implementing wellness packages and are invested in the practice’s mission to help horses and people.

Buchanan described multiple reasons why veterinarians might want to start wellness programs:

  • the desire to generate more work for the practice
  • the desire to improve the bottom line on the vaccine and preventive care side of things
  • the desire to make clients’ jobs easier and more affordable by packaging wellness care into option plans. This strategy works well to provide care to the horses, also making it simple for their owners to access the care.

“The psychology of pricing is confusing,” noted Buchanan. “When we tried to make this a discounted package of services, it wasn’t very popular. When we raised the price of the wellness package, three times as many people enrolled.”

However, if the wellness package is too expensive, “there is a point where no one will buy anything,” he cautioned. Cost-conscious clients are likely to buy vaccines, etc., from feed and animal health supply stores—these folks aren’t the ones to whom you are trying to sell the concept of a wellness package.

If his clients were to buy services “a la carte,” they’d end up paying the same, he explained. However, this program ensures several things that clients find appealing:

  • The veterinarian’s office sends reminders and helps to schedule the appointments, rather than waiting for the clients to remember to call.
  • There is no ambulatory fee for any of the wellness package procedures, regardless of how many visits are made to the farm for the wellness work. An ambulatory fee is already factored into the package price.
  • Included in wellness services are:

▷ vaccinations twice a year, or as needed;

▷ deworming;

▷ a fecal exam once a year;

▷ physical exams twice a year;

▷ body condition scoring evaluation;

▷ a Coggins test;

▷ an unlimited number of health certificates;

▷ microchipping;

▷ dentistry with sedation; and

▷ sheath cleaning.

For clients with Buchanan’s wellness package, the emergency fee is waived for lacerations or colic, for example.

If an owner sets up an appointment for wellness services, then, “while you’re here, doc,” asks for a pregnancy check, an estrous cycle check or a lameness exam, Buchanan explained that there would not be an ambulatory fee charged. However, there would be ancillary charges for services unrelated to the wellness package.

Since November is a less-busy month, he tries to push less time-sensitive work, such as dentistry and fecal testing, until then. This helps spread services throughout the year, rather than bunching them up around spring and fall.

The wellness package allows more time for talking with each client and answering questions. Additionally, he has started a program of shirt patches that enrolled clients can wear that designate them as part of an “exclusive” club; the visible patches also serve to promote his business. If a horse dies part of the way through the year, then Buchanan compensates the owner with a pro-rated amount for the remaining time left on the wellness package.

If a horse is sold, then that year’s wellness package can be transferred to the new owner; however, there is no compensation for remaining time if the horse moves out of the area or the new owner doesn’t wish to participate in the program.

Most of Buchanan’s clients who sign on for the wellness program are one- to two-horse owners who don’t stable their horses at big barns. Others are trainers. He said that the 30-40 horses currently enrolled in the standard yearly wellness package is a manageable number, and he’d be willing to take on more.

Looking at the statistics, he noted that each client with a wellness package has an average of 2.5 horses. Each horse receives that include not just wellness care, but also wound, lameness and emergency calls. His practice is called to attend to these other issues in part because the client has bought into the practice’s philosophy of excellence in overall health care.

Best Not to Discount

Buchanan urged veterinarians not to discount procedures. He feels that standard pricing resonates best with clients who know you are there to serve and help the horses’ health, and that you are administering those services at a fair price.

“The small-animal model puts together a bunch of services at a discount,” he said. “Their objective is that they want their clients to use less than 30% of what the client is buying, and they are counting on small-animal owners not using the full package.”

By contrast, he wants owners to use everything included in his equine wellness package, because his core value is to help horses and help people. He strongly discourages discounts, instead focusing on instilling in the clients the concept of receiving the best health care for their horses in a program delivered throughout the year at a fair price.

Marketing

“The best method of marketing is word of mouth from clients and also internal staff referrals,” said Buchanan. He found that the technicians and receptionists are the most important marketers for the program. With a client on the other end of the phone, that staffer might say, “Are you interested in getting information on our wellness plan?” Similarly, while a veterinarian is on the farm treating colic or performing a lameness exam, the staffer could initiate the conversation about wellness plans. Selling the concept relies on effective communication of the practice’s vision of preventive health and wellness.

Other marketing tools, such as adding the wellness program concept into the business logo, are also important. Direct mailers about the program can be included with billing invoices. The use of Facebook and the practice’s website are other methods of marketing this concept.

Buchanan prefers that payment for the wellness package be made up front as a flat fee in January, rather than being paid monthly. This is better for cash flow for the business, takes less effort and manpower to ensure payment by the practice staff, and is more expedient for the client. Fees are locked in for that year, which is another attractive feature. The client must keep his or her account paid in full in order to receive continued care for that horse.

Where Is the Profit?

The wellness package generates 10-15% profit, which is Buchanan’s target projection. This is straight profit that comes after factoring out all overhead and veterinarian salaries/commissions. He considers the cost of overhead per minute and adjusts professional fees accordingly to achieve a target profit. It becomes a win-win for the practice, the horse owners and their horses.

It is important to be clear to an associate how his or her compensation for wellness packages will work, stressed Buchanan. In a multiple doctor practice, it is tricky to figure out production and commission/salary when the wellness package is paid for upfront.

Most associates care about their contributions to the business, yet if there are incurred charges not included on the books—because payment for the package was made at the beginning of the year—then it could look like their gross income for the practice was less than their work output would indicate. For associates receiving a straight commission base, there might be some logistics to get them appropriately compensated. If paid a salary, which is often determined by how much work is done by the veterinarian, the numbers need to be evaluated appropriately to ensure that credit is given for work done for clients enrolled in a pre-paid wellness package.

The Concierge Plan

Buchanan has a second plan that he is trying to promote: a concierge plan. He was able to collaborate with an insurance company to whom he pays a certain amount each year for each horse enrolled in the plan. The age restriction for horses enrolled in the concierge plan is 2-17 years.

Each enrolled client pays $600 per horse every six months to receive:

  • all the services in the standard Wellness Package;
  • annual blood work (CBC/Chemistry panel);
  • surgical colic insurance up to $7,500, regardless of whether the horse has traveled out of the local practice area; and
  • medical colic coverage up to $1,000 at any of the Brazos Valley Equine Hospital practices.

Buchanan’s practice self-insures the $1,000 payout. His view is that if the horses receive wellness care throughout the year and clients do as instructed with management, diet and exercise, then there are fewer reasons for a horse to colic.

Take-Home Message

A wellness program rolls a bundle of services into one package, and those are services you are likely to be doing anyway for your clients’ horses.

By bundling them into a specific program, clients will feel like they get more bang for their buck and are part of a special group within your practice, one that deserves special attention. It is important to advocate and communicate about this program to your clients, so they are motivated to sign on. This inspires client loyalty while also enabling you to carry out your mission of improving the health and quality of life for your equine charges.