Setting Prices at Your Veterinary Hospital? Start Here.
Many veterinary hospital owners have questioned whether or not they should make changes to their current fee structures to adjust for the high demand for their services. Price changes can be made each year, but evaluating potential fee increases can be tricky. Even though it is difficult to truly understand the price elasticity of specific services, hospital owners can utilize data to help determine which services may be the best candidates for increases.
The first step in evaluating the hospital’s current fee structure is to keep track of the number and type of services that a doctor recommends that are ultimately declined or accepted by the pet owner. If a particular service is declined more often than others, this may indicate that the service is priced too high and that the fee should be lowered. Conversely, if there is a recommendation that is accepted 95% of the time, this could signal that there is an opportunity to increase the fee for this service. If adjustments are made and the acceptance rate declines, this may indicate further evaluation is needed due to price elasticity.
Pricing can fluctuate greatly based on your area’s demographics or competition, but tracking declined recommendations can be a helpful way to narrow your focus and identify service lines that could need further price evaluation. Even if the price of the service is not changed, hospital owners can pinpoint areas where pet owners may need to receive more education from doctors in order to fully understand the benefit of the procedure for their pet. With any price changes, it is important for hospital owners to remember that fees are not permanent and can be adjusted as needed.
If you need help evaluating and improving your hospital’s profitability, please contact KSM’s veterinary consulting team.
A Guide to
Learn how you can run a healthy, efficient, and profitable veterinary hospital.