Should vets be as comfortable reading balance sheets as blood results?
Nazrene Moosa qualified as a veterinary surgeon from the University of Pretoria in South Africa in 1988. She has been in small animal practice ever since – first in South Africa and, for the last 18 years, in the South East of the UK. In the last 27 years she has worked as a sole practitioner/owner as well as for independent and corporate-owned practices, and currently works in a busy small animal practice in West Sussex.
When I first arrived in the UK almost 20 years ago, there were major changes afoot in the profession. My first job was in a corporate practice in Portsmouth, and I have some fond memories of being at the forefront of this new trend.
Nazrene Moosa
Since then the inexorable march of the corporate practice has forever changed the landscape of the veterinary profession in this country. The sheer number of corporate-owned practices means that, for many vets, and especially for newly graduated vets, a corporate employer will be all they know. Independent practices are becoming less the norm, especially in the small animal sector, and there is an almost inevitability that many of these will succumb to the lure of the corporate pound at some stage.
So the corporates have ensured the survival of many practices that may otherwise have disappeared into the annals of history. They provide employment for many young vets and formulate development programmes that support new graduates. They aim for gold standard care and try to achieve this within a financially sustainable environment. The usual mantra from the corporates is that they allow vets to be vets rather than managers, they enable them to concentrate on the stuff that matters, rather than the humdrum financial and management issues that many vets have little or no interest in. They have experts in human resources and management to do all of the non-veterinary stuff. But is there a way of incorporating (pun intended) vets in a more positive way so we’re more than ‘just vets’?
Fast forward to 2030 and I believe the profession is likely to be predominantly corporate based. Personally I would feel more comfortable if, over the years, something of a paradigm shift had occurred in the way vets viewed their roles. I am hoping, at some stage, the penny will have dropped and the powers that be at teaching institutions will have recognised the need for an increased amount of business training being an integral part of the undergraduate degree. It’s not the sexy end of the job, but needs must and it is an everyday skill that is sadly lacking in many vets today. I remain optimistic that the many development programmes that the corporates of today have in place will have translated into a new breed of vet who is comfortable with the multiple roles of vet/manager/financial expert. Ideally vets would be as comfortable reading balance sheets as blood results and be able to make decisions affecting ‘their’ practices with the knowledge and authority that will ultimately impact on their own lives, and those of their patients, in a positive way.
When I was at college 1973-1979 I wrote to the then Prime Minister Margaret Thatcher complaining that I had gone to University to become a vet and the essential business and communication skills I would need were nowhere to be seen. The response was ‘you will have to employ a manager to do that work because w=the course is already too overcrowded.’ Since then I have done lots of work in developing my own knowledge and expertise in these areas, and have researched and developed material for the RCVS CertAVP and other postgrad education for vets. I believe that the independent practice run by independent vets is likely to remain the most profitable and most successful and most rewarding for an ‘all rounder vet’ and if the profession wishes to retain the ability to recruit the best people in the future it needs to understand and continue to develop these skills and initiatives, and the belief in this ability to succeed on our own account. This can be done. The whole crux of the matter is that whoever provides the finance to back the industry, the profession needs to maintain the independence that is intrinsic to being a profession.
Financial acumen is an absolute necessity to providing excellent medical care as the 2 are inextricably related. Balancing the books, so to speak, is what pays for expertise, equipment, materials, premises, etc, etc. Medical knowledge and expertise are no guarantee of financial success. It is the lack of business management/principles which has undoubtedly contributed to the poor return on investment of the average veterinary practice and hence the unattractiveness of practice ownership and the relatively poor salaries of all veterinary employees. Quality medical care often requires a high-end operation in terms of facilities, equipment, number of staff, etc. and this requires a solid financial foundation. Being able to read balance sheets, then drawing accurate conclusions, allows for better financial decisions and hence improved practice success.
Regardless of it you work in a corporate or independent practice, there is a need for basic finance information to all the vet teams – not just vets but veterinary nurses too, at Universities and colleges. An understanding of where wages come from and why when “you give this away or don’t charge for that” it has an impact of the practice finance should be included and continued through from managers/PM’s to employees. For those who want to go into management or business ownership – vets, VN’s or PM’s, can take further qualifications or find courses to help expand their knowledge. Each member of the team has a responsibility to the practice and will require some business information/knowledge to work effectively for the practice, their colleagues and the clients, afterall, a bankrupt vet practice is no use to its clients!
It’s just great to read these four positive comments about the essential nature of business skills in veterinary practice. I worry that veterinary medicine students live in a fantasy world of what their careers are going to be like and the skills they will really need to continue practising into the future. I’d really welcome any ideas about how to get these skills more embedded in the veterinary curriculum so they are considered truly essential and not just optional.
Liz Jackson
Lecturer in Business, Royal Veterinary College
I’ll take an opposing view, potential heresy from a previous practice owner and ex SPVS president…
I’m not convinced that vets need to understand balance sheets as much as they do lab reports, especially in the early stages of one’s career. The assumption that it should be taught at university is incorrect, for the course is that of Veterinary science (or medicine etc) and the course is, I suspect, already quite crowded. There is also the aspect of those undergraduates who have no interest in being practice owners and I suspect there are more of them than there used to be. What does need instilling is the simple matter of always charging correctly for one’s work and never giving away someone else’s money as a discount. The education in balance sheets should come later and ideally left to those who do understand them – ie good managers; unless owner vets are prepared to give up clinical time to manage and learn how to do it properly.
Iain
As someone who is at the stage of career where business acumen is becoming more relevant I think as already stated that there is a need for vets from day 1 to have a general common/business sense about charging correctly for services, how much things cost, not only relevant to our own business but to the clients business as well. I have certainly worked with new grads that have no idea how much a milk withhold costs. Therefore I think that maybe there needs to be some very basic teaching on this topic at University or if you’re lucky with EMS or at least an encouragement to make an effort to find this information. However I agree that not all vets need to be really on top of the balance sheets because some of us are just not that way minded and would work better with guidance from somebody who is. But on the other hand I feel that management with no vets involved can be detrimental to clients and employees so there is a balance to be found which will be different for each business.
I think Louise and Iain both raise extremely valid points. I whole-heartedly agree that veterinary graduates do not need to be fully-qualified CPAs but I think that anyone who works in any business must have a fundamental awareness of where the money is coming from, how it is circulating through the business and how hard it is to come by. Furthermore, everyone in a business needs to understand the importance of having a cash resource so that short-term obligations can be met…such as…paying the business’ wage bills at the end of the month. All of this knowledge comes from having an awareness of money and the awareness of money comes from the business’ accounts.
Iain is right that the veterinary curriculum is desperately over-crowded but I would argue that it is over-crowded with material with which first-opinion vets are not going to be exposed. In fact the veterinary curriculum is not based on any evidence of veterinary caseload, disease prevalence or work practice patterns. Stephen May is often cited as advocating “A proliferation of knowledge in all scientific fields and an increase in public expectations of the profession” (May, 2008, p. 573) has resulted in enormous growth in the volume of information that could be delivered to the students, “just in case they may one day need to use it” (May, 2008, p. 577). It seems to me that this “just in case” knowledge is being provided at the expense of essential knowledge that will allow the veterinary business to remain sustainable. This essential knowledge to which I refer is the knowledge Louise talks about (e.g. costs) as well as other skills like communications, team work and marketing.
Reference: May, S. A. (2008) “Modern Veterinary Graduates Are Outstanding, But Can They Get Better?”, Journal of Veterinary Medical Education, 35(4), pp. 573-580.