Paid Doctor Production for the 'New Normal' in Veterinary Economics

Paid doctor production is a way of remunerating doctors based on their gross sales.  Typically a doctor is paid a base salary (ideally 20% of their projected annual sales) and receives an additional 20% bonus on all sales that exceed their annual goal.  These additional payments may be broken down monthly, quarterly, or paid out at the end of the year.  Production deficits may be carried over to the next period or may be wiped clean after an accounting term depending on the practice.  Vacations, maternity leave, unexpected slumps in business, and associate rivalry have all bedeviled the success and perceived fairness of the system.   Production-based pay works extremely well for some practices and is a cause for rancor in others.

Regardless of your practice’s past level of success with paid production, it’s likely you’ll need to rethink your position very soon. As we price more competitively and invest in new services and team training, the old rules are simple not practical and I would argue, unrealistic.

Begin 2012 with a review of your practice’s margin on production-based services and products, then discuss your findings with your veterinary team.  Including everyone in the discussion will improve buy-in.  Keeping the conversation about margin, rather than a doctor’s level of involvement with a service or sale of a product, will keep egos at bay.

Consider pulling production-pay on products that are competitively priced like flea, heartworm or non-steroidal medications.  If spays and neuters are priced as loss-leaders, perhaps production pay on these services could be reduced rather than fully eliminated.  Again, you have everything to gain by allowing the whole practice team to participate in the discussion.  A meeting like this may be just the spark you have been looking for to ignite a hospital-wide understanding of today’s veterinary business challenges and what every team member can do to improve the likelihood of success.

For a full list of recommended doctor production rules click here and follow the hyperlink to Veterinary Paid-Production Rules.