20/10/2023
THE COST OF PRODUCT VS THE COST OF SERVICE��
The most common complaint all veterinarians get is with our rates.�
Often we get comments like: vaccines cost only this much or the syringe costs only this much at the agrivet, lazada or in the drugstore. These vets are just in it for the money.��
A veterinary hospital or clinic delivers not only the product but more importantly, a SERVICE. This is what many people fail to understand. A lot of work goes into being able to provide a service. Many people want to avail of the service, but do not want to pay for it.
��Let me break down for instance, the cost the hospital incurs in able to offer vaccination services to the pet owner. An average vaccination and physical exam lasts about 45 minutes at AKVH.��
DHLPPi Vaccine - Php228
�BD Syringe - Php8
�New Disposable Needle (new and sharp so the puppy wont feel as much pain)- Php2
�Alcohol - Php0.25
�Cotton Balls - Php0.25�
�Vaccination Card - Php25
�Doctor- he performs a full physical exam on your pet. The physical exam is non negotiable in our hospital as we need to determine if your pet is fit for vaccination or not. He will point out good or problem points with your dog. Many clients like to ask the doctor to check on some things they noticed like something on the ear or skin at this time. The doctor will gladly oblige to check on these and answer other questions during the physical exam. Clients love this part of the service because they learn a lot of things about their pet.
�The average pay of our doctors is Php35,000/month. Others get paid more, others less depending on seniority and skills. 45 minutes work using the average rate will cost Php126.20.
�Customer Service Representative - they greet you politely and with warm smiles when you arrive, take your name, make a record for your pet or communicate with the records section to pull up your pet’s files, make estimates for your pet’s procedures, tally up your bill, note down your follow up appointment and texts you to remind you of your upcoming appointment. She gets paid Php16,000/month. Ten minutes work to pull up your pet’s forms, answering your questions and tallying up your bill is worth Php12.82.��
Pet Care Assistant - if your pet is anxious or not too happy with being at the vet, he will hold your pet so the doctor can do a full Physical Exam. He will also clean and disinfect the clinic, dispose of medical waste (syringes, needles, cotton) into their proper receptacles after each use. PCA’s are often paid an average of Php16,000/month. Fifteen minutes of his time costs Php19.23.��
The disinfectant the PCA uses to clean the examination table, the floor and other things that came in contact with the patient costs Php6,000/gallon. This is diluted into appropriate solutions and will cost Php4 for every 200 ml used to disinfect the room after each use.��
As you sit in the reception and as your pet gets his vaccination, you enjoy light and air-conditioning. These are run by electricity. Same with the refrigerator used to store the vaccine that will be given to your dog and the servers powering the laptops that store your pet’s records. Our average monthly electric bill is Php65,000. Electricity juicing our air conditioners and lights costs Php8.83 for 45 minutes.��
Parking space is a big sticking point with pet owners as they need to be able to park their cars properly and safely while their pets are being treated. Rental for 450 square meters in a prime location with parking good for 10 cars (12 in a pinch) costs Php245,000/month. If you and your dog arrived in a car, you will use approximately 20 square meters of space in the parking lot, reception and the doctor’s clinic. The use of 20 square meters for 45 minutes costs Php34.03. �If you bring more than 1 dog plus the entire family along, you will occupy more space. ��
In order to open and operate a business in Cebu City, one needs to pay for permits, garbage fee and business taxes. To do business in Cebu City, we pay City Hall Php144,000 a year. If we average 40 walk in patients a day, Php10 from each patient’s bill goes to City Hall.��
We need an accountant to compute our sales and report this to the BIR and City Hall, process our permits with City Hall, BIR, BAI, DTI and SEC. They also process government mandated benefits for our employees like SSS, Pagibig and Philhealth. They get a retainer fee of Php10,000 a month. Once again, if we average 40 walk in patients a day, Php8.33 from each patient’s bill goes to pay the accountant. ��
The Bureau of Internal Revenue kindly takes away 12% of each sale for E-VAT. If we charge Php600 for the vaccine and the exam, Php64.28 of that goes to the BIR.��
All of that already accounts for Php551.22 of the Php600 charge leaving the hospital a profit margin of only Php48.78. ��
Many people like to think only of the vaccine (Php228) and choose to ignore that the vaccination service itself, the use of the facilities and the right to be able to offer such a service also cost money. ��
We have not yet even factored in the rest of the silent but constant expenses - water, hand soap, detergent, toilet paper, disposable tissues, mopheads, etc (Php30,000/month);
�monthly maintenance of airconditiong system (Php12,000/month), �monthly maintenance of the air purification system (Php16,200), �continuing education (Php50,000-80,000 per doctor per conference- count 10 doctors go on conferences every year);
�retainer fee for the IT consultant who maintains our servers and laptops (Php5,000/month); retainer fee for the Xray technician (PHP45,000/year); �telephone, wifi and mobile phone (Php15,000/month);
�credit card service fee (5% of all credit card sales;
collection and disposal of medical waste by a Cebu City and DOH accredited facility (Php75 per kilogram of medical waste-syringes, vials, IV bottles, IV fluids, used gauze and cotton)
and many many more. �
We are only speaking of maintenance and not even yet considered the actual cost of acquisition of things like X-rays, ultrasound, lab equipment, surgical equipment that run into the millions of pesos.��
If we factor them all in, we are not really making any money from vaccinations and should probably be pricing vaccinations at Php1,000 per. But we don’t do that because vaccinations are a regular wellness service that should be affordable to our patients but at the same time not entirely disadvantageous to our operating expenses. In short- breakeven.
We want our patients to be happy and healthy and these visits serve as a bonding time between vets, clients and their pets.��
You like that you can park your huge SUV at the vet? You like that there is a doctor that will watch over your hospitalised pet at night? You like that your vet can provide your and your pet a VIP room? You like that your vet cares about the air quality that your hospitalised pet breathes? You like that your vet regularly texts or calls with updates on how your hospitalised pet is doing? You like that your vet calls or texts to remind you of your appointment? You like that your vet’s kennels are air-conditioned? You like that your vet’s facilities are clean and doesn’t smell? You like that your vet uses gas anaesthesia, electrosurgery and monitors your pet’s vital signs, ECG and blood pressure all through out his surgery?
Your vet did not come by them for free.
��So next time some of you decide to call us extortionists, nawong kwarta/ mukhang pera/ money faced, or complain that your bill is too big, think about and give value to what went into providing the quality service and facilities that you and your pet enjoyed.
