Avoiding the cost of non-conformance in a vet practice

Avoiding the cost of non-conformance in a vet practice

stamp non conforming products in red over white background

A few years ago, when I began breeding affenpinschers, my vet did an ultrasound and told me my little bitch would be whelping one big puppy and would require a C-section. When the time came, I took her to the local emergency clinic and told the vet there what was required.

A couple hours later I was told the vet decided (without consulting with me) to let her deliver the pup naturally. The result was a dead puppy and a furious client. To this day I will not visit that clinic or recommend them to my worst enemy. The clinic lost a happy client, goodwill to its reputation and a couple thousand dollars of revenue per year.

This is a classic example of the cost of non-conformance. And it probably happens at your clinic more times than you would like. Billing mistakes, meds errors or failing to listen to the client and perform the requested services are some of the ways you may be wasting money on failures in your practice.

The concept of finding ways to help businesses conform to a quality standard developed when product engineers realized it was far less expensive to develop, train on and follow procedures correctly the right the first time, rather than have to correct a mistake that affected a client.

The dictionary definition of the cost of non-conformance is:

“The element of the *Cost of Quality* representing the total cost to the organization of failure to achieve a good *Quality* product.

CONC includes both in-process costs generated by quality failures, particularly the cost of *Rework*; and post-delivery costs including further *Rework*, re-performance of lost work (for products used internally), possible loss of business, possible legal redress, and other potential costs.”

Your profit is directly impacted by the cost of non-conformance in a number of ways through the money that comes out of your pocket for:

  • Cost of staff time to fix the mistake(s)
  • Cost for loss of future business and impact to reputation
  • Disruption that requires you take time from client care
  • Delays in seeing other patients, revenue stream slowed and angry clients
  • Cost of wasted supplies, drugs and equipment usage
  • Cost of down time figuring out what went wrong and who to blame!
  • Cost of product returns (if it involves meds or retail products)
  • Cost related to injury to the animal or staffer
  • Cost of customer lawsuit and impact on professional insurance premiums
  • Potential for Regulatory or Government fines
  • Costs related to losing the customer and referrals from that customer
  • Cost related to loss of goodwill when affected customer(s) submit negative online reviews

Reducing the number of mistakes is not without its own cost to you: it requires a strong commitment on your part to establish and document industry appropriate client care protocols, engaging the staff in on-going/relevant training. The goal is to reduce the rate of errors each month by a goal amount that you set with your staff. By recording future errors, it will be possible to modify procedures or training to consistently improve the quality of care you provide to animals. You also will see a positive impact on the profit and goodwill that your practice generates.

By | 2018-08-06T17:28:26+00:00 August 22nd, 2016|News|Comments Off on Avoiding the cost of non-conformance in a vet practice

About the Author:

Camala Bailey, CPA, CVA
Cammi Bailey is founder and president of CPA4Vets. She consults with practice owners nationwide helping them to achieve financial health. She speaks nationally educating veterinarians and practice managers on financial and management topics relevant to running a healthy practice including cash flow and budgeting, team engagement and stress management.