Table Of ContentPRACTICE MADE PERFECT
A Complete Guide to Veterinary Practice Management
2ND EDITION
Marsha L. Heinke, DVM, EA, CPA, CVPM
With contributions by John B. McCarthy, DVM, MBA
2
© 2012 by Marsha L. Heinke
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without
permission in writing from the publisher. The forms may be reproduced for use by the person purchasing this
publication, but may not be sold, transferred, conveyed, or provided to any third party.
The Author and AAHA do not assume responsibility for and make no representation about the suitability or accuracy
of the information contained in this Work for any purpose, and make no warranties, either express or implied,
including the warranties of merchantability and fitness for a particular purpose. Neither AAHA nor the Author may be
held liable for adverse reactions to or damage resulting from the application of this information. Advances in veterinary
medicine or practice management may cause information contained herein to become outdated, invalid, or subject to
debate by various veterinary or other professionals. AAHA and the Author are not responsible for any inaccuracies,
omissions, or editorial errors, nor for any consequence resulting therefrom, including any injury or damage to persons
or property. AAHA and the Author shall be held harmless from any and all claims that may arise as a result of any
reliance on the information provided. Users should contact their own legal counsel or advisors with respect to the use of
this Work or any of the forms in their state prior to implementation.
American Animal Hospital Association Press
12575 West Bayaud Avenue
Lakewood, Colorado 80228
ISBN 978-1-58326-172-9
Library of Congress Cataloging-in-Publication Data
Heinke, Marsha L., 1955-
Practice made perfect : a complete guide to veterinary practice management / Marsha L. Heinke ; with contributions
by John B. McCarthy. — 2nd ed.
p.; cm.
Includes bibliographical references and index.
ISBN 978-1-58326-172-9 (pbk. : alk. paper)
1. Veterinary medicine—Practice. I. McCarthy, John B. II. American Animal Hospital Association. III. Title.
[DNLM: 1. Practice Management—organization & administration. 2. Veterinary Medicine—organization &
administration. 3. Hospitals, Animal—organization & administration. SF 756.4]
SF756.4.H45 2012
636.089’068—dc23
2012007075
Aquisitions Editor: Bess Maher
Developmental Editor: Katherine H. Streckfus
Cover design: Robin Baker
Interior design: Erin Farrell / Factor E Creative
Printed in the United States of America
12 13 14 / 10 9 8 7 6 5 4 3 2 1
3
Contents
List of Figures
Acknowledgments
PART I: INTRODUCTION TO MANAGEMENT
1. What You Need to Know About Management
2. What Does It Take to Be a Manager?
3. Strategic Planning
PART II: PERSONNEL AND HUMAN RESOURCES
4. Personnel Management
5. The Employment Cycle
6. Employment Laws
PART III: OPERATIONS AND MAINTENANCE
7. Reception and Front-Desk Procedures
8. Medical Records
9. Inventory Control and Management
PART IV: FINANCE AND ECONOMICS
10. Hospital Revenue and Financial Control
11. Accounting and Bookkeeping
PART V: MARKETING AND CLIENT RELATIONS
12. The Human–Companion Animal Bond
13. Marketing Your Veterinary Practice
Glossary
References
Additional Resources
4
Index
About the Author
5
List of Figures
Figure 1.1 The Management Process
Figure 3.1 The Strategic Planning Process
Figure 3.2 Creating or Revising Mission and Vision Statements
Figure 3.3 SWOT Analysis
Figure 3.4 Five Forces
Figure 3.5 Pest Analysis
Figure 3.6 Value Chain Analysis
Figure 3.7 Support and Primary Activities: Self-Analysis Worksheet*
Figure 3.8 Veterinary Practice Scorecard
Figure 3.9 Ranking, Designing, and Assigning Smart Goals*
Figure 4.1 Communication Behavior Dynamics
Figure 5.1 Job Description Template for Veterinary Receptionist*
Figure 5.2 Interview Checklist
Figure 5.3 Application for Employment*
Figure 5.4 Questions to Ask a Reference*
Figure 5.5 Orientation Checklist*
Figure 5.6 Form W-4*
Figure 5.7 Form I-9*
Figure 5.8 Employee Evaluation Form*
Figure 5.9 Employee Self-Evaluation Form*
Figure 5.10 Employee Warning Form*
Figure 5.11 Termination Report
Figure 5.12 Employee Exit Interview*
Figure 5.13 Employee Record Form/Confidential
Figure 6.1 Sample Employee Policy on Harassment
Figure 7.1 Call-Handling Worksheet*
Figure 7.2A Client Information Form*
Figure 7.2B Animal Medical History*
Figure 7.3A Estimate Form*
Figure 7.3B Estimate and Admission Form*
Figure 8.1 Sample Progress Notes Form*
6
Figure 8.2 Controlled Substance Log Sample Page*
Figure 9.1 Sample Product Tracking Form
Figure 9.2 Purchase Order System
Figure 9.3 ABC Analysis Graph
Figure 9.4 Calculation of Annual Turnover for a Veterinary Practice
Figure 9.5 Calculation of Annual Turnover for a Single Item
Figure 9.6 Calculating Economic Order Quantity
Figure 9.7 Mark-Up Pricing Versus Margin Pricing
Figure 10.1 Sample Patient Service Tracker
Figure 10.2 1099-B*
Figure 10.3 1099-MISC*
Figure 10.4 W-9*
Figure 10.5 Sample Credit Information Form*
Figure 10.6A Sample Collection Letter*
Figure 10.6B Sample Collection Letter*
Figure 11.1 Bookkeeper Examination*
Figure 11.2 Summary of Withholding Taxes*
Figure 11.3 Form 940*
Figure 11.4 Form 941*
Figure 11.5 Control System
Figure 11.6 Accountant’s Compilation Report
Figure 11.7A Balance Sheet: Assets
Figure 11.7B Balance Sheet: Liabilities and Equity
Figure 11.8 Income Statement
Figure 11.9 Statement of Cash Flow
Figure 11.10 Stockholder’s Equity (Statement of Retained Earnings)
Figure 11.11 Financial Statement Timeline
Figure 12.1 The Pet-Caregiver-Veterinarian Bond
Figure 13.1 Post-Visit Card*
Figure 13.2A AAHA Client Satisfaction Survey*
Figure 13.2B Client Satisfaction Survey*
* Included on companion CD.
7
Acknowledgments
Thanks to the reviewers of this second edition: Lisa B. Bell; Robin Brogdon, MA; Amanda
L. Donnelly, DVM, MBA; Michelle Guercio-Winter, CVT, CVPM; Charlotte Lacroix,
DVM, JD; John L. Meyer, PhD; Carolyn C. Shadle, PhD; and Gary Truman Esq. Their
comments and additions greatly enhanced this publication. Thanks also to the first
edition’s editorial board: Laurel Collins, DVM, ABVP; Richard Goebel, DVM; Charles
Hickey, DVM; Clayton McKinnon, DVM; and Hal Taylor, DVM.
8
1 INTRODUCTION TO MANAGEMENT
9
1 What You Need to Know About Management
Financially successful and professionally rewarding veterinary practices result from good
management. Good management doesn’t happen by accident. It originates in a strong
professional and career vision and in thoughtful planning and decision making. Although
management may be intuitive in some respects, managers of superior veterinary practices
purposefully plan, design, and implement management systems and protocols.
Once a burgeoning field drawing from general business resources, veterinary hospital
management has evolved into a specialized and essential component of successful veterinary
practices. It is founded in well-educated and skilled personnel. Acquiring comprehensive
knowledge and a full array of management skills may require formal education in business
and management. Nevertheless, basic practice management information can be helpful to a
wide variety of veterinary professionals, including practice owners, associate veterinarians,
veterinary students, office managers, bookkeepers, any employee with supervisory
responsibilities, and other stakeholders in the veterinary profession.
Why Veterinary Practice Management?
Traditionally, veterinary practice managers have learned about managing hospital
operations through trial and error, through supplementary coursework, or simply by
trusting in fate to ensure adequate profit. The prime tenet has been “Practice good
medicine and all else will follow.”
However, practicing good medicine isn’t something most clients can see. The tangible
effects of good management increase client satisfaction and consequently client retention.
Keeping a practice well managed is a little like training a thoroughbred. Simply owning a
good horse doesn’t produce a Triple Crown winner. Success requires a wise trainer who
knows her team and uses her available resources. A systematic conditioning program,
superb nutrition and health care, an expert blacksmith, and an experienced jockey are all
needed, in addition to the racehorse’s veterinarian, to create a consistent winner.
Similarly, a manager must have a broad range of skills and knowledge to run a veterinary
hospital well. Financial management, facility development and maintenance, personnel
training and oversight, and regulatory compliance are just a few areas of management
import. Today’s challenge is to become a competent manager in all of these areas while
keeping the practice team fully attentive to client communication and patient care.
Good managers are stewards of the veterinary practice. They think proactively, bring
creative ideas to the table, follow through and execute directives, acknowledge their own
limitations, constantly seek self-improvement, and exhibit passion for and belief in the
10
