Why The New Medical Device Tax Shouldn’t Be Bad News For YOUR Veterinary Practice

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A Veterinary Medical Device Tax? Really?

As you should know, even though veterinary patients cannot benefit from the Affordable Care Act (also known as Obamacare), there is one part of the law that has a direct affect on veterinary practices.  Of course, we’re talking about the 2.3 percent medical device tax which was meant to make device manufacturers and their buyers contribute to the cost of expanding health coverage.

The spin from the government was that this tax was not a bad thing for medical practitioners because they would benefit from having more business from insured patients. However, they made one big oversight…some devices used on humans — including ultrasound machines and laboratory and X-ray equipment — are also used for animals. As a result, veterinarians have to pay the extra tax as well!

While Republicans are calling for its repeal in a deal to end the government shutdown even some Democrats are opposed to it because they have medical device manufacturers in their districts.

Just Another Obstacle To Navigate

Many veterinarians are up in arms about this veterinary medical device tax, and rightly so, however you shouldn’t fall into the trap of letting it affect your  business. You see, this is only one of a number of negative factors that are giving the veterinary profession a huge wake up call.

It’s just another item you can add to the following list:

  • New Veterinary Schools emerging and Veterinary Class sizes getting bigger when there are already too many veterinarians in the market place.
  • Veterinarians retiring later because their pension funds are depleted, practice values have declined and/or they’re just not ready to retire.
  • A decline in pet ownership. Between 2006 and 2011, dog ownership declined by 2 million and cat ownership by 7.6 million! During this same period the number of vets increased by 12,000!
  • A surge in new cheap spay and neuter clinics.
  • Big box stores and wholesalers entering the market for flea, tick and even heart worm preventatives.
  • Internet pharmacies.
  • Pet Vaccines being administered by travelling ‘shot doctors’ at small pet stores, street corner pharmacies and even gas stations!

Of course that list doesn’t even include the recession and the ‘New Economy’ we have entered in which consumers are far more picky and judicious with their hard earned cash.

Focus On What You Have Control Over Not What You Don’t

Here’s the thing… you have no direct control over any of these factors. So you can either complain about them, blame them and let them affect your veterinary business OR you can put yourself in a position where they don’t have any significant impact on your business.

Instead you can focus on making your veterinary business different and giving local pet owners compelling reasons to choose you. Even in a down economy only around 15% to 20% of consumers making their buying decisions solely on price. However, if what you offer is a commodity (or is perceived as being one)  then all make their decision based on price.

So if you can position your practice in ways where you cannot be compared with your competitors you can charge more than they can and attract better quality clients than they can i.e. clients that will pay, stay and refer.

So don’t let the medical device tax put you off buying that new $40,000 device you were planning on getting. Instead think of ways you can get back the extra $1,000 (2.5%) you will have to shell out to get it. Here’s just a few things you could be doing:

  • Raising your prices. When was the last time you raised them? If you’re offering value for money for services your clients can’t get elsewhere it should have little impact on whether clients stay with your practice but huge impact on your bottom line.
  • Raising the value of your existing clients by running promotions for preventative treatments to ethically get them in your practice more often.
  • Having scripts for your team and signs in your reception area to ethically get them to spend more while they are in your practice.
  • Doing more to attract new clients such as improving your marketing and referral programs.

The point is you can either sit back and let these factors pull your practice down or you can be proactive and make your practice bullet proof to these factors.

The question is what are going to do?

 

 

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