The birth of a business idea often comes about as a result of personal experience. Perhaps you've struggled with something for which you wish you could find a solution. For most of us, we probably have hundreds of ideas in a given day about how our lives could be easier, how tasks could be made more convenient, how money could be better spent. Sometimes, there is one idea out of all those that persists and nags at you. For me, that idea was how to make veterinary care more affordable for pet owners.
My $4,000 Vet Bill...
Over the past decade, I've had four dogs and four horses. You can only imagine what I have spent on veterinary bills, and I don't regret a bit of it. I don't have children, so for me, my dogs and horses fill that void. Like many pet owners, I am willing to do almost anything to ensure that they have a good quality of life. However, paying for that quality of life has often been a challenge at best, and cause for sheer terror at worst.
Some years ago, I had an emergency vet bill that amounted to $4,000. Seeing that bill was terrifying. At the time, I was going through a difficult divorce and a job transition, and I didn't qualify for a third-party financing option. Had I not had one credit card with a zero balance, I would not have been able to pay for my dog's treatment, which saved her life. However, it took a very long time for me to pay that balance off, and at an outrageously high interest rate.
New Job Leads to An Opportunity to Solve a Problem
Several years after the "$4000 Vet Bill," I found myself with the opportunity to go to work for a payment processing company. Our core business is the electronic processing of recurring payments, through automatic debits to a consumer's checking, savings, or credit card account. We have a long history of efficiently and cost-effectively handling electronic transactions. Nearly 27 years ago we started out by serving clients primarily in the health and fitness sector. Recurring automatic debits are common when you join a gym, and most people are familiar with how that works. My task when I started here was to figure out ways to expand our business to other markets beyond health and fitness, to help other businesses benefit from the electronic recurring revenue model.
While there are really countless businesses that we can help -- anyone with multiple recurring billing needs, or membership or subscription-driven businesses, there was one place I thought we could go where we could fill a void not just for the business, but for their clients as well, and that was the veterinary industry. So I started to do some research.
Both Vets & Clients Struggle with Conversations About Cost
What I found was interesting and compelling. Veterinarians often complained about the difficulty of discussing the cost of veterinary care with their clients. Their clients, in turn, were anxious about that conversation, too, knowing that most veterinary clinics require payment in full at the time services are rendered. While this is a fair expectation for the clinic -- after all, it is a business -- with the rising costs of vet care, payment in full is often difficult, if not impossible, for some clients.
3rd Party Financing Plans Not Always the Best Solution
Veterinarians have not ignored this issue by any means. Most of them want to help their clients, and their clients' pets, any way they can. It has become quite common for veterinary hospitals to offer third-party financing plans. There are a number of 3rd party financing companies out there, but most vets use one in particular. These financing plans are a great option for many clients, provided they are approved for the line of credit, and that they completely understand the terms of repayment. The veterinarian benefits, too, because he or she gets paid in full -- albeit with a 5 to 10% fee taken off the top. While that is quite a hefty percentage, until recently there has been no other viable alternative for vets who wish to offer their clients payment terms. And that is where my idea came in. I began wondering if we could set up recurring payment plans that veterinarians could offer to clients with a legitimate need for payment terms, but for whom financing wasn't an option, for whatever reason.
Of course, the perspective I had on this was primarily based on my viewpoint as a consumer of veterinary services. It would make my life easier and give me some peace of mind knowing that I had a payment plan option that was not interest-based, and that I could pay off in equal installments over a period of a few months. That's all well and good for me. But there needed to be a benefit to the veterinarian as well.
The Gap Between Financed Payments and Non-Payment
From the research I've done, as well as the anecdotal evidence I've gathered by talking to vets in my area, I discovered that many of them have no alternative to offer to clients who have a large bill, and who do not qualify for financing, or do not wish to open another line of credit. In the absence of the third-party financing option, many of these vets have set up promissory notes with clients, held credit card information and billed the card each month (which is a data security risk to the vet practice), or even held onto post-dated checks. Other attempts to reconcile clients' payment problems include everything from having the client clean cages in the back of the hospital to finally having to offer a deep discount on services, just to get paid something. (One vet I talked to even held the title to a client's truck!) It seemed to me that I could come up with a better, more systematic way to help these veterinarians get paid without resorting to all of these largely unsuccessful tactics.
Many months of research, both formal and informal, have resulted in the professional payment plan management package we are launching for veterinary practices. Our program aims to create a "win-win" situation for vets and their clients, which makes me feel very good. If I can't offer a legitimate service that will truly solve a problem, then I am not doing my job!
A Simple Solution for Filling a Void in Veterinary Payment Options
Our program really offers a simple, streamlined solution, and I'm proud of that. What we do is make it possible for veterinary clinics to offer clients a recurring payment plan, with the payments automatically drafted from a checking, savings, or credit card account. We offer multiple debit dates, to make it easy for the clients to budget the payments. We also want the vet clinics to have the freedom to set up the payment plans on their terms, not a set of terms we dictate to them. The clinic can decide the amount of time they want to offer the client to pay off their bill. They can make this decision on a case by case basis, in which the client's need can be balanced with the clinic's need to get that revenue in the bank.
We also wanted to make it easy for the vet practice to offer these payment plans without creating extra work for their own staff, by having to track payments and follow up in the event of a returned or declined transaction. Our company will handle all of that on the clinic's behalf, so we can act as an extension of their "client relations department."
No Cost to the Vet Practice
Finally, we intended to offer these payment plans at no cost to the veterinary practice. The client pays an enrollment fee, and a nominal convenience fee is added to each periodic payment, so the administrative cost is absorbed by the client instead of the vet. The only costs for the vet are a one-time set-up fee (less than $200) for our optional Credit Score Recommendation (CSR) system, and if the vet decides to use this system, there is a fee for each credit check.
Assessing Client Credit Risk
The way the CSR system works is simple: After accessing the system, the client's basic information is entered (name, address, SSN), submitted with the click of a button, and an instant credit decision is returned, featuring a credit letter grade (A - G), along with a recommendation for the amount of down payment to collect, and the length of payment period to offer. We designed these results as recommendations, based on our research into typical delinquency rates for each credit grade. The veterinary practice may choose to follow our recommendations, or not. They are meant to be a guideline, not a fixed requirement in order to offer a payment plan. The practice is in control of determining client eligibility for a payment plan, informed by our CSR program.
Since we are not a lending company, we do not provide payment in full upfront to the clinic. Our system does minimize the vet's financial risk, by combining credit assessments with systematic, automatic withdrawals from the client's account. We believe this is a beneficial option to the vet as well as the client, especially since the absence of a no-interest payment alternative can result in non-payment.
Most Clients Want to Pay and Most Vets Want to Offer Superior Care
It is truly my belief that most clients want to be able to pay their vet bill, and they will pay it, if they have a manageable way to do so. I also believe that veterinarians are pretty awesome people in general, and that they don't want their clients to be stressed about how to pay, when they are already worried for their pet's health. Vets want to provide the best care for the animal; clients want the best care for their beloved family member. I passionately believe that everyone can get what they want when the financial strain is reduced for both parties.
To learn more about our payment plan management package for veterinary practices, contact me (Suzanne Cannon) between 10 am and 6 pm EST at 1-800-766-1918, ext. 106. Alternatively you can click on our logo below.
I would welcome your comments or thoughts on this post! Feel free to comment here, or you can e-mail me directly at suzannec@ebcs-solutions.com. Thanks!!
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