Welcome to The Future of Veterinary Medicine. I'm your host David Hall, co-founder of GeniusVets. As you know, we are focusing on some topics that are very important to Independent Veterinary Practice owners across the country this season. We have two amazing guests with us here today, both from AmeriVet partners—David Liss, the director of operations, and Jayson Dickerman, the executive VP. David Liss is a distinguished veterinary business leader holding an MBA, a certified veterinary practice manager, as well as professional and human resource certifications. David served as the ER department manager and hospital manager of two different 24-hour veterinary practices and led the Platt College Veterinary Technology Program as the program director.

In a past life, David was a veterinary technician specialist working on the floor as an ER ICU technician for more than 10 years, winner of Speaker of the Year award at WVC and the RVT of the Year award from the Southern California Veterinary Medical Association. David enjoys presenting to veterinary teams and has done so internationally since 2009. David currently is the regional operations director for AmeriVet Veterinary Partners management and resides in Los Angeles, California. David, thank you so much for taking some time to meet with us today.

And Jayson Dickerman, executive VP. Jayson's a well-known figure in human health care sales and the business development world. Jayson spent his 20 years plus career in various capacities as the national marketplace medical sales leader, where he's been instrumental in the growth of large multi-billion-dollar companies, as well as mid-size and startup pharmaceutical companies. Most recently, Jayson's journey within human health dermatology brought him to the consolidation arena. Jayson spent many years on the business development team at Schweiger Dermatology Group, where he served as the president... vice-president, sorry... of business development as they grew to the fourth largest dermatology group in the country. In this role, he was a member of the executive leadership team under the CEO. He played a pivotal role in the rabbit's successful PE-backed expansion. And as a result of the pandemic, his next chapter began in November this past year when he took over the reins as the business development department at AmeriVet Veterinary Partners. Currently, AmeriVet has partnered with over 80 hospitals nationally and is growing quickly.

 

So you've come on pretty recently from the human side to the animal health side, how's that transition been for you?

It's been great, it's been really exciting. Is a lot to learn, big differences between the two. I spent more than 20 years in human health and I respect doctors, physicians, vets, human health, animal health. I was pre-med. I always wanted to be a doctor. I went into medical sales, like my dad, like my brother, so it was in my blood when I was younger and it's... So financially it's a great living, but also I love working with healthcare workers of any sort. Specifically, in animal health, it's been really eye-opening. It's amazing to see how fast it's growing. I was in a bubble on the human health side. I really didn't have a lot of exposure until AmeriVet to see, not only the industry expand, but as a result of the pandemic, animal ownership increase so I'm learning a lot about the expansion of the business, but also getting to know the veterinarians.

They're really unique, and interesting, and smart people, very down to earth, very easy to talk to, which I love. Coming from human health dermatology, I had very similar experiences, very similar types of people. That's similar in that transition, but for the most part, it's been great especially working with this team at AmeriVet. They've been really supportive knowing that I still have a learning curve a little bit on this side, but I've been able to shadow a lot of our partnerships in hospitals. And I'm a big believer in learning as much as I can, as I grow into this role.

 

What will make you feel normal again? What are you looking forward to getting beyond all the lockdowns and everything? Jayson, what are you looking forward to?

Yeah. I would say, one, is more sentimental. I live up in Massachusetts, outside of Boston. My family's in Florida, so I haven't seen them in almost two years. My dad, my brother, it's family, so it would be that I'm looking forward to is bringing my daughters down there to see their family as many people have experienced this situation, and I'm sure lots of people are looking forward to that as well. And then I'm probably looking forward to going to a baseball game, or a concert, or... I went out to dinner the other night and it was like, I was enjoying every moment of it because it was the first time in forever, safely of course, that I was just socializing in a small group. So I'm looking forward to maybe, as we open up a little bit more, just being around strangers, being around people. Maybe that'll feel a bit normal. We're always around people we know now a lot so…

 

What are you looking forward to, David?

So it's actually somewhat similar to Jayson, but I have not yet had the opportunity. Well, I don't know if you were dining outdoors. We have some of that here in California, but dining indoors with a large group of friends and not feeling that people are gross in the sense of, they could give you something. That's been such a psychological tough thing to wrap your head around. We didn't really distrust the germs of strangers and we have the last year, so being... Whether we're indoor or outdoor, but going to a meal without a mask and being able to share a glass of wine with five or 10 people, whether it's a big family or big friends and being indoor on a cold night, especially for those who are on the East Coast, I hear you, I get you.

And then more on the solo front, it's just being able to go to a coffee shop and spend a few hours inside, sipping a cup of coffee, and seeing people filter in and filter out, and just be on the laptop. You can do that here outdoors now, but as you know, LA real estate is pretty limited in terms of where there's outdoor stuff, and if there's one or two tables, it's totally full. So just be able to go inside to a coffee shop and grab a corner table and sit there for a few hours. So I agree with Jayson to concerts and all that kind of stuff are great and really all that normalcy will be great, but those are really the top two things for me.

 

What did you guys been doing over the past year? Something that's really been important in veterinary health, particularly for a long time, is there some challenges in this area particularly in this industry, but what have you been doing over this stressful time? I mean, there's been COVID, political craziness, so many stresses over this past year. What have you guys been doing to protect your mental health?

Yeah, I've been meditating. Every morning, I'm trying to focus on my mental health and making sure that I'm in a good place each day no matter what happens because last year was really stressful for a lot of people and for myself, and I ended up in a great place, but through the pandemic, I mean, now it's about a week, last year, was really the last week I was in New York and out working for my last job. And through this pandemic, it's caused my career shift and it worked out great, but it was definitely a lot of change in one year, working from home, having four-year-old daughters knocking on the door all the time when I used to be out in an office. So meditating and fitness, and there's a very COVID safe gym by my house called Koko Fit, so that's a nice little plug for them, and they have a smart trainer, and it's perfect for a quick 30-minute workout.

So I've been watching what I eat. I've been taking vitamin D. I've been through this pandemic. It really dawned on me to make sure that I'm as healthy as I can be, being 45 years old. And if we're going to be dealing with these threats and this new way of life, going forward, I want to make sure that my immune system, my mental health, my mind, body, soul, as hokey as that sounds, I'm a believer now. I really want to make sure that I'm in the best position to handle whatever comes.

 

David, what have you been doing?

So to follow along the lines of working out, the gyms have been closed in California. I think they just started opening outdoors. They were closed again for a while. It's been really back and forth. So I retook up running and the first couple of months, certainly in last March, were a mile or two, and then a huff and a jog. And I got up to eight miles at one point, and now I'm nursing a little bit of a sore hip. But it's been a little bit of that kind of control and an uncontrollable world. So if I hit the pavement, and looked at my watch, and I've done three and a half, four miles, I go, "Man, I did that," that sense of control that you can get back in your life.

And same as Jayson said, using that to stay healthy, certainly did my fair share of Uber Eats and gross takeout, but also cooked a lot at home, and was watching what I was eating. And then just a lot of self-talk, telling myself that the four walls I'm in are okay and turning off the TV at times, and hearing either whether it's an aggressive backlash to something or upset people or whatever it might be, saying, "I'm not in that place," and disconnecting from that. And then, as an operations director, I stayed really in close contact with our teams, and our teams were just brutalized in terms of the clients that took it out on them, and that was just kind of national anger and upset at the world, and also being busier than they ever have, and really changing the way that their workflow was.

And even fear of coworkers and just staying in really close contact with them and channeling that empathy of, "I get it guys, and we're all in this together, and how can I help support you?" And AmeriVet did a fantastic job of supporting our teams through the pandemic with mostly whatever they needed, including weekly Starbucks for every clinic that wanted to take advantage of that as a thank you. So it was really great to be able to offer something to them. I said we can't change the rules maybe of the County, or the state, or the country, and also can't change the state of what's happening in the country, but I can provide what support I can.

And that actually in a way, paid me back in spades too. It helped maintain my sanity to say. It felt good to give them something to say, "Guys, you're on the front line, you're the one checking on the dogs and doing the temperatures and all these things, how can I help support you?" And I think in a way that keeps you sane because you're channeling some of that upset and anxiety into helping, right? And so that's what I did for the last year, was on the phone with my managers, multiple times a day, being on a speaker phone in an all-staff meeting, talking to staff teams about health stuff and COVID guidelines, and talking to individual team members about pay and all these different things. And so, it really helped just keeping that connection with our community.

Yeah. Helping others really can be so therapeutic. It's really great. And you can't overstate how much a just a little something, just slightly out of the way, just unexpected little kindness can go so far with people, [crosstalk 00:14:43] really make a difference. Yeah. You mentioned running. I've wanted to get out... I swear. I'm not supposed to run, and the way that know that is every time that I get out and I start at the three miles. I get to four, I get to five, I started getting up above that and I get injured. Yeah. Some weird injury always just comes because, "No man, what are you doing? Do something else."

 

I'd like to shift gears a little bit and let's talk about the veterinary industry, let's talk about some trends in the industry, and in particular, one of the big topics we're talking about on this season of The Future in Veterinary Medicine is consolidation. Consolidation is one of the biggest trends and forces that are shaping and reshaping the veterinary industry. So I'd love to open it up. And Jayson, I know this is just right up in your wheelhouse. Now, just so everybody knows maybe a little bit for guiding this conversation, AmeriVet does have an interesting partnership model that we'll get in and talk about a little bit, but I think everyone should get a good sense of exactly what each of you do. Jayson's more seems to be in the... It's definitely front lines of meeting, and discussing partnerships, and how you can work together, and David, you're more in the helping them deliver resources once people are in the fold. Is that accurate?

Yeah.

 

So if we're going to talk about consolidation, then let's talk about, first of all, the number one force. Sorry, some sort of a notification coming through to my computer. Why are practice owners selling to corporate do you think? What's the number one force that's behind that or some of the top forces that you're seeing, pushing people to make those decisions, Jayson?

Yeah, that's a good question. I think why they're being approached and then looking to sell is because you have a really valuable industry. It's growing quickly. Probably there's a lot of independent hospitals. It's probably around 20% consolidated. So there's a lot of runway for an independent hospital to partner with a corporate entity. So in my experience, and any time there's a specialty that's growing fast and checks the boxes a lot of valuable areas, you're going to have interest from investors. And I think that's what you're seeing right now for the past few years, and you're going to continue to see is, you have real smart people who worked for private equity groups or they work for corporations, and they want to invest their money in something that they see a value that is growing.

So you're having a lot of different consolidators come to the market, pitch their model to an independent veterinarian in our hospital. And then, if it seems like the right fit, they'll see from a financial value, because the financial is there and it's very appealing and incentivizing in a lot of cases, plus taking a lot of the day-to-day work off of their plate and some of the things that might bug them about running their practice, that keeps them from seeing patients the way they want to, or practicing medicine the way they want to, or interacting with their staff. And that's when a partner can come in and take a little bit of that off the plate.

And also for those who envision a path towards retirement, or exit, or something else, you have other groups who will help them see that exit in a way where they're financially taken care of and they get value for their hospital. So I think that's a big reason why this is happening right now. Not every independent veterinarian will do it, but I think that's why you're seeing a lot more each day, partner up.

 

Once you actually have then identified a partner, you work through an agreement, you get through to that side and there's a handing off of the baton, so to speak, within your group. And David, when you start working with these owners, what do you find are a few of the biggest things that they really are seeing big relief in, like, "Thank goodness," motivators towards that type of a relationship where they're... Just what are they really happy to get off their plate, typically, at least at a high level?

Yeah, that's another good question. So I think number one that I see is paying the bills. And it's often a bit of a reminder that I have to do with some of our partner veterinarians that are current owners. We're 100% owners, or now partners and say, "You don't have to pay this anymore. We've got the system in place," so they will just send us the invoices basically, or the receipts, or whatnot, and we have an accounting department that deals with all that. And so they'll often say, "Well, what do I do with this? I got this bill for whatever." And I say, "You send it to this email and you forget about it. And it magically gets paid now." So that's think, one of the areas that they really enjoy. Some of it is, sometimes the practice manager had done payroll is another big one, where again now, they don't have to micromanage the payroll, the staff clock in and the manager takes a quick look at the timecards and approves it and it gets handled by our back office.

So that's, I think, the really big second one. And then the third one, I think really is more just having moral support. So when a partner comes on and is fully integrated, as we call it, brought into the fold, they now have legal, accounting, HR operations. There's all these people that are in their corner, and are an email or a phone call away, to help them run their business. And somebody in veterinary practices, "No, I started working in independent practices and I worked in corporate practices." And you get a client that screams, "I'm going to sue you," or you get a letter from the state and you go, "What the heck do I do with this?" And with AmeriVet, you send it off to the email or call the number and HR, legal, or finance, or whoever takes look at it and it gets magically handled and we do that.

I think a way that's also really beneficial to partners, will call them and have meetings and say, "Here's what it is." And we educate them on whatever that stuff is. So it's very collaborative. It's certainly not the whole idea of, "Send off the bill and don't ever worry about it." There's transparency. They can see where things are in the queue and what's getting paid. But I find those are the top three things that partners often have to be reminded of in a gentle way to say, "You don't have to worry about this anymore, we got you, and let us just do the jobs that we do really well."

 

There are a lot of differences between the groups that are acquiring practices, consolidators or whatnot, and within the veterinary industry. Could you describe a little bit, what differentiates your model from others that are out there? What are really the key tenets that make you unique?

Yeah. Sure. What appealed to me about AmeriVet before I came here was, having worked in healthcare consolidation before, I was really used to the 100% model, right? You would buy a hospital, you buy a clinic 100%. The owner will become an employee. And then that clinic would become a location of the mothership if you will. With AmeriVet, what I liked about it is, they evolve the consolidation model and it's important for veterinarians because, in keeping their culture and their independence, which, in speaking to a lot of them, that's important. They're able to... with AmeriVet... partner together, so it's not 100% buyout. We buy a portion of ownership of the hospital. And then, the other portion remains with the owner. So it's a true partnership, and it's the foundation of our model. So it's a joint venture.

So in that way, we're all rowing in the same direction. We're working on the AmeriVet side to help support the practice and help it grow. And you still have skin in the game and ownership from the owner to still lead and keep that culture and identity of the hospital intact. It's a little bit more challenging to do that when you have a 100% buyout. So those are really the two typical ones. You'll have consolidators that buyout 100%, and then the owner will stay on for a predetermined amount of time and go from there. With our model, it's really important that... and that's part of what my team does, is not only do we try to engage with sellers and opportunities to partner and bring them to the table, but we're also looking for the right partner in return, right? So we want to make sure... because our model is unique... that we're working together to help grow the hospital together. So that's a little bit of a different model compared to the 100% consolidator.

And it's not saying one's right or the other, there's probably about 60 different groups out there, and just like anything, they're all different, and I think that's one of the myths about some of the corporate groups and the private equity groups, is that we're all the same. And just like any corporation, it's built on people, right? And so it's all the people that are there that make up the corporation. So if you're 100% consolidator, if you're JV model, if you're helping support the partner to grow, then you're doing your job. So those are really the different types of consolidation.

 

What I'd love to do is ask you, David, when you get handed over to a client, there are a couple of specific areas that you usually play a huge role in the profitability of a veterinary practice. And when you're talking about the cost of goods sold and payroll, off the top, those are the two biggest areas of revenue. So could you give us a little bit of an insight? When it comes to the cost of goods sold and talking about drugs and supplies, prescription diets, outside services, labs, disposal, cremation, all those sorts of things if you're first going to start working with a new partner, how do you approach that? What do you go in looking for? What kind of analysis do you go through? What kind of things do you find that you're able to start cleaning up and delivering some value from early on?

Yeah, that's a great question. So typically when we interact with possible partners before they come on, essentially that whole process of the due diligence and research that both AmeriVet does. And the new vet has elicited a lot of interesting information and we know some of the historical numbers. So for example, the practice historically runs... I don't know... 27% COGS, for example. And so we know some of that going in and formulate our... I don't want to call it an action plan, more of our support plan. And so often we have... once the deal is done and we've given them a little bit of time to breathe and go, "There are all of the credit cards as an error or the time clock isn't working well."

So there are all those things that pop up. Once that's settled, typically in our meetings with partners and, or the practice manager whom they may have defaulted to, to talk some of the business stuff with, we'll go through, and COGS is one of the first things we look at. So when we finalize the deal of a practice, we do a complete inventory count just to get a baseline. It's part of the accounting that we do. And often we'll find right there, either stuff in the computer that's not reconciled. So they just haven't been using the computer much or a lot of backstock or overstock that is expired or isn't being used to generate revenue. And so a lot of times, my first question is, "Look at your COGS. They are historically..." I don't know, "... 27%, 28%." And then I can use some of our benchmark AmeriVet data and say, "Our COGS run X%, do you want to work on some areas to improve that?" And 99.9% of the time, it's like, "Yes, absolutely help us with COGS."

So then go through my rigmarole of looking at their inventory, optimizing in the PIMS, and redundancies on the shelf. And we've also brought in a lot of our national, kind of preferred partners and agreements that we have. And if the partner DVM wants to take advantage of those are already going to see some cost adjustments there. And so then we work together and usually, the partner can pick from a menu of options. So either, the whole hog thing, "Let's get the computer synced up and let's do all this stuff," or, "Let's start with these smaller pieces first," and we roll them out. And then we look on a monthly, quarterly, and yearly basis on the COGS and see what kind of adjustments we have.

And then in between there, AmeriVet is always looking at ways to improve and tighten COGS, whether it's a new agreement or a promo with a vendor, or something along those lines. And COGS happens to be one of our focuses for this year. So we have a whole year to do some work on that. And so it really goes back to, I think, having a real gentle hand in change management. I don't dictate, we don't dictate anything. So we say, "Look here. Here's how we can help you improve." And then the partner can say, "This is what I'd like to do." And I can say, "I really think that this piece is very important. Can I try to work on it?" And they say yes or no. And then we come to a level of consensus and go from there.

So that's really how I approach really anything in the practice. It's always a partnership. It's always a back and forth between AmeriVet/me and the partner. And you all mentioned culture. I think we really uphold that. And there are multiple times a day that I step into something that I messed up on because it isn't their culture. So I might say, "Should we do this thing?" And they'll say, "No, that's not something that's part of our DNA or our fabric." And I'll say, "Great. Got it." And unwind or rewind. And then we realign and get back to work. But COGS, I think is one of my pet passions, because it is something that you could really use data and some of the smallest tweaks, like having four different NSAIDs on the shelf and you can stream it down to one and optimize your online pharmacy for the other ones, always, already can save a couple of percents. And all we're talking about usually to move the dial is between 4% and 6% on COGS.

We typically think about COGS as an expense and it is, but a lot of people just think, "Well, I don't know why it's stuck into that line item." And when you think about that kind of accounting theory, it's really not the cost of goods sold, it's really the costs of revenue or the costs of services. And so, in order to do veterinary medicine, right? We have to use medications, or we have to send pets to the crematory, or we have to use outside services like a lab. And so, it's not an investment, it is an expense line item, but it's really the stuff that we use to generate revenue. And so when they see it like that, when I say, "We want to generate revenue by having as little on the shelf as possible to turn it over faster, because then otherwise we're just putting money in the bank with a 0.01% savings account," right? "It's not doing anything for us."

And when they start to see it in that way and they say, "Oh, the leaner I can keep it..." For inventory is a big example of this, right? "... and know that I have enough lean time to feel comfortable that in a few weeks if I run out, I've still got some on the shelf, but I don't need three to four bottles of something that takes me six months to sell, because it's sitting there and not generating revenue," that starts to click. We look at lab contracts. If they've been with X lab company forever and ever, and they're very tied to that company, AmeriVet can come in and say, "Hey, we want to look in renegotiating this," or, "Can we work around this? Or pricing, right? Pricing is a big piece.

We can look at the pricing and say, "Hey, in our experience, you could adjust this markup, or you could adjust this fee, or whatever to drop COGS and increase revenue." So yeah, absolutely. A lot of it is education, and coming at, very much from the angle of, "They've been doing this 30 years, so they know a lot, and we have maybe just had the time to read the accounting books. So let's reconcile that, right? And provide them with some of that insight that they may have never thought of before."

 

At what point do you, perhaps, maybe not force, but step up the encouragement to maybe some new cultural tendencies that can help profit and things like that?

Yeah. Well, I think AmeriVet does a really great job of this. As financial partners, we have to have meetings that may not be the easiest, and I think that we do that in a great way, and I think that our seller veterinarians, our partner veterinarians, get that too. They're also typically not going into this thinking that the deal happens, and then we come back in five years and say, "Oh, how are things going?" We're involved to the extent that they want or need us to be. And so we typically are radically transparent and radically, "Bring stuff. Here are the P and L for this-"

Yeah. There is information about what's happening here. And so that usually does elicit some of this, "Oh, that doesn't align," and it takes some time to figure out that as well. So I think the conversations that we have with partners, when we say, "Hey, we've got kind of a sticky situation, we want to go over with you," they're very respectful, right? We bring it right to the partner. We say, "Hey, we need some time with you. Do you want to do it in the morning, or the afternoon, or Zoom or however, so that it's confidential?" And the partner DVMs are also speaking to a financial partner as well. There's mutual respect, I think. And so I have these conversations and I'll say, "Hey, here's what's going on." For example, "A staff member emailed about this crisis they think that they're having, and I want to bring that to you and let's discuss it."

And I think that really immediately creates trust and also diffuses some of the totally natural defensiveness they might have of, "Hey, Oh my goodness. The light's been shined in these corners, that we know we're there, and we haven't really had a chance to really tackle yet." And it's very collaborative. I say, "Look, we're in this together now. Whatever stuff is there, let's work on it." And as you know the people, as you said, the veterinarians, the industry, there's really no bad people in this industry. They're all great people with... Everybody's got shortcomings, right? And everybody's got things we need to work on.

So when I approach it as a human being saying to another human being, "Hey, I got you. I've dealt with this before, as a manager, as a director. Here's how we can work on this." They often will say, "Thank you, and yes, let's get to work." And I think that they appreciate that it's brought very clear and direct with them, but in a collaborative way, it isn't. "Here's the issue, you deal with it, and we expect you to deal with it." That's not our model. Our model is, "Hey, I got you. Let's try to figure this out. Here what I'm hearing and I brought it right to you first as the financial owner, partner." And I think there's a lot of mutual respect that comes from that.

 

There are not enough veterinarians and there are not enough vet techs. And there certainly are shortcomings in the marketplace for the number of vets and vet techs that are out there. But over the past couple of seasons of this webinar and podcast, we've had some of the most brilliant people in the veterinary industry on, and they've talked about this issue, and really the consensus among them tends to be that the biggest issue is the doctor's not doing doctor level work or vet tech's not being allowed to do that tech level work and those sorts of things. You actually have vet techs, in short supply, and you have vet techs that are unhappy and leaving the industry because they're a glorified receptionist and not being allowed to do the things they should do, whereas in the human side... and Jayson, I mean, you connect with this... you don't know any sort of doctor's office. And I mean, you're seeing the admin staff and nurses 96%, 97% of the time, you see a doctor for a minute. How do you approach that ensuring... because this can be, there's a cultural thing, "This is just the way we do it here, but this is the thing that affects the bottom line." How do you get doctors to pull back, and do just the doctor-level work, and start utilizing staff in a way that makes sense and is more profitable?

Yeah. That's another great question. I think it just goes back to humans being humans and all of us going through change, and COVID taught us that change is not easy. And so I think the beginnings of change is really the why, "Why don't you do it this other way?" And usually, the why elicits the fear reaction, right? If these are the fears that I have around why I don't do it that way. So you dig into those. I mean, when you avoid those, I think as a collaborator, leader, partner, whatever you want to call it, when you just say, "They should be doing this way," or, "I don't know why they don't do it this way," or, "Why don't you do it this way?" And they say, "Well, we could never do it that way." And you just say, "Okay," that doesn't really move anything, but when you say, "Well, tell me about what is keeping you from getting there."

And I would say that mostly in the industry, the ripples are throughout that, yes, you're exactly right, that we have a lot of technicians leaving and we've got doctors that are really overworked also because they are taking on a lot of the technician stuff also, right? And so it's about leveraging the staff and using that to improve everybody's work day. The technicians then get utilized and do the stuff they should be doing, and they're doing higher-level stuff. And the doctors do doctor stuff, and then at a certain point can put their hands up and say, "This isn't my job. I do doctor stuff, you do tech stuff." And they don't have to feel like they have to do everything.

So it's really, I think mostly, supporting practices, for sure, with staff and teaching about how to stratify different things. Supporting the technicians they do have with good pay and good benefits, and then working with the veterinarians, whether they're owners or not owners to say, "Okay, let's look at the legalities of the state and what can technicians do and what can't they do. And then if it's not a legal issue if technicians are doing less than what is legally actually allowed, what's the fear? And I think the biggest challenge for veterinarians is they use the liability as a scapegoat, "I'm going to get my license in trouble if the technician does something wrong." Well, that's true, but you would also get your license attacked if the person from Subway did something wrong. They know it doesn't change because they're a technician or not a technician.

So you have to be ready to really make sure that you have cheques and balances, and good staff training and people are doing the right thing the right way. Most technicians, if they've drawn up the anesthetic drug in the right way, and they give it, and the patient dies, that wasn't actually anybody's fault. So that's not actually negligence or malpractice, right? It's just what happened and there was always a risk to medicine. So I think that working through and supporting them and saying, "This is why you have PLDT insurance and all these things to cover you." And then the next piece is kind of baby steps. So for example, if it's like dental, could the certified registered technician... Could you give them some drug doses? And could they do the induction of anesthesia with you in a room because you want to move it quicker and you don't need to be with them every minute, that they try that at one patient and see how it goes, right?

The 1% rule or the one... Try it one time and see how it goes, or could they monitor the surgery while you're not there, or could they... A lot of technician appointments for when things that we're talking a lot about now where they can do checkups on pets. They're not diagnosing, they're not prescribing, don't mince my words, but they're doing a temp, and await, and a gum check and an ear check on a pet who hasn't been seen maybe in a few months, but they could do a bi-annual check. The doctor does the full physical every year, and then they come in for some reduced fee and see the technician for something. The Anfield is doing a lot of these. So I think it's just digging into that and looking at that, and then I think you're right, having the right people in the right seat.

So the veterinarians doing veterinarian things, technicians doing technician things. And then looking to the outside of our industry where the nature of work is going, people, and especially millennials, are demanding autonomy, they're demanding development, they're demanding basic benefits that they see happening all over. We've got Target Amazon paying people several dollars more to be... during COVID. And so the staff are going, "What about us?" Which is really true.

So it's really just about, I think, getting our heads out of the sand a little bit and looking at the rest of the world and the nature of work and the nature of employees, and then AmeriVet and our team and our HR team are there to support all of the practices that are with us. And I think that that's really what adds to really kind of wider, deeper career, when you've got this really wide set of things that you do and you know your lane and you're in your lane, I think that's really important.

I think one of the biggest things that AmeriVet brings in, and Jayson mentioned this to our potentials is, you have now have a full-time recruiter if you finish the deal with AmeriVet. Sometimes during the process, we have recruiters engaging with practices to educate them. I don't know any veterinary practice other than maybe very large, 10 or 12 doctor practice that could afford to have a full-time person doing recruiting. It's usually the manager and the owner that is going to the conferences or putting up the job ads and calling people. So one of the advantages we have too is offering recruiting services, which is really important. I mean, in this day and age, we have to be targeting people in vet school or in internship and residency.

So you've got somebody who's calling doctors from LinkedIn, and sourcing kind of leads, and gauging their interest, and building them up with the company that they'll be in, and then also selling the independent model. And they go to the independent clinic and meet with that partner DVM. A lot of that is very important to veterinary candidates too. Some of them just don't want to work in corporate, which is fine. And so they get to meet the partner on the ground, that our model sets up. So I like to tell our practices that even though you may not hear from them every day, there's a lot of independence... I mean, there's a full-time recruiter, that's working for you behind the scenes, eight to 10 hours a day, every day. So you've got a lot of support there.

 

What are some of the big things that you find, that the conversations are coalescing around between the things that practice owners are particularly interested in what you can do for them?

Yeah, David hit it on the head. What I'm finding just coming in is that veterinarians, in general, are at a premium. There's what? 24 vet schools in the country. So there's a lot of hospitals and there's a need to grow these hospitals, and one of the ways you grow it is by adding associates, adding any veterinarians to the hospital, and that's at a premium right now, as well as techs are. So one of the things that makes these groups like ours appealing is our scales, our size. You join AmeriVet, you join a group like ours, and now you have 2000 friends to tap into of a network if you need information on, "How do I maneuver through this challenge?" Or, "Can you give me an idea of how you can help me with COGS or with staffing?" So we have a lot of wells to tap into. So I think our people and culture team, is faced with the same challenge as an independent hospital, but because of our size nationally, we're able to maybe be evaluated resource to support because we're larger.

Need to establish a better culture within your practice? Check out our free Culture Workshop by DVM, The Drake Center owner, and GeniusVets Co-Founder Michele Drake. 

 

We've worked with hundreds of practice owners, and I find a lot of practice owners look at marketing like this, like, "Okay, look, I'm a doctor. I just want to practice good medicine. Everybody said, yeah, you got to market your business. So help me check that box." And that's what they look at it. They look at it as like a commoditized, "Go ahead and check this box. Are we marketing or are we not?" And they don't really want to spend a lot of time leaning into it. It's not their comfort zone. How much do you find that something that, practice one hand off and what do you guys do to help them?

Yeah, I think, even through this conversation, you're seeing a huge resource in people like David who know the industry, who know the space, who can help support our hospitals, right? You can just hear him speak. And he has a vast knowledge of ways to support. We also have that on the marketing side. We have a team that works on social media for our hospitals, helps with marketing, search engine optimization, things like that. And it's a big value add, and it... You're probably right.

It's not something that's first and foremost on an owner's mind, right? But one way or another, you're marketing your hospital versus others, your brand, your identity, and you're all doing something really well, just a matter of getting that out, whether it's through testimonials or through reviews, and there are different things that work for different hospitals, but I'm a big believer, being in a sales marketing background, that one of the key ways to drive your business and to grow is to have a social media presence, is to work on your website, make it more appealing, more user-friendly because yeah, if that's something that needs... You could definitely do your own pilot study and see if you really paid attention to it, how much have a great team on our operations that helps support that.

Yeah. I would second that. One of the things that I find AmeriVet brings, and another group would bring too with any kind of centralized marketing, and we have brilliant people in our marketing department is, really the focus on marketing. And I heard marketing described once, which I think was really useful in a way to say, marketing's about telling the world who you are, so it's not the website, or e-commerce, or click-through rates, or whatever, it's about telling the world who you are and what you offer. And as Jayson said, a lot of our practices and the nature of the industry were very word of mouth, right? You're the community veterinarian. You may not have a veterinarian within 10, 15, 20 miles. And especially in areas like mine and urban areas like Los Angeles, we've seen it exponentially grow.

The barrier to entry is really low. I mean, you can get a place and redo it and get a decent SBA loan and get leases on all the equipment, and boom, all of a sudden you have a veterinary practice. So the competition has been growing and you're always going to have a small set of clients that are not that happy or looking for something new. And so they will leave you and go to a different place. So you have to have both the healthy kind of client retention, which I think it's marketing, but it's more on the client education side and driving new services and keeping them educated and connected like social media. And then you also have the organic kind of the new client-side, too.

So you have to have a new, healthy funnel, and I've worked with practices and we have some AmeriVet that come in and they notice that they're kind of average active clients, is actually trending down and so are their new clients? And so we actually have to boost the new clients up through a lot of paid and, or social, and then teach them that that's the client that's going to pay you back over 10 years. And so even just digging into that and thinking about ways to do paid ads, to do organic, to optimize their website, to launch campaigns, to connect with them through platforms, like some of these systems that'll do reminders, that can email or text the clients, which is all part of the marketing strategy, right? Is extremely important, especially in the digital world where, to be honest, their client is probably split, right?

50% generation, baby boomer, 50% millennial, and the millennials are demanding technology. So if they're behind on some of that, then they're going to be losing that, the new client from even the top of the funnel, right? Looking for the new vet and saying, "Vet near me," and then it comes up and they click it and it doesn't have a great optimized website, or they're not finding a link to book an online appointment or... whatever that might be, they're looking for, you're going to lose them and that's going to be a pain point.

So I think that marketing is extremely important, especially in today. And it's just about, again, educating, teaching the partners, "Hey, competition is fierce out there, whether it's you or the next guy, and we have this great centralized full-time department looking at you and creating aggregated agreements with website providers or whoever it is to provide in best in class." And then we bring that to them and they get to customize all the marketing.

They get to review all the copy that goes out, strike stuff, change stuff, and then we help launch these things for them. And I think if we were to survey a client pre-AmeriVet, post-AmeriVet, in some of our clinics that have really taken on our marketing initiatives, I think we would see higher potentially NPS scores because we've provided now what the clients have been asking for or wanting. They just don't have enough people to make that happen, right? They may not be working with a group like GeniusVets to provide a kind of off-the-shelf marketing solution. So I think, AmeriVet has not only able to use a third party like GeniusVets or some of these other groups but also has internal folks working for us who love pets and love helping people that help pets. So it really makes it full circle.

 

I know that there's a big thing that you guys can help people with attracting staff. What about when it comes to professional development, getting past the interviewing, helping hire people, what about retaining those staff? What sort of things do you guys do to really help practices with that?

Yeah. I love that. Is developing people. So I have a team of seven business development professionals, and I've been through leadership classes, and development classes, and coaching, and like David was saying, it's the business of being humans, right? So people want to get better, people want to improve, people want to do things that scare them and take risks and grow into their role, or grow into a different role, or find something else. So that's my passion. I love that, in addition to business development. But also getting to work with a group of people who really care about this industry, and about their company, about the partners that we bring on. Same thing at the practice level, the hospital level. There's a lot of their staff, their employees, who are great at what they do but maybe they want to be challenged more, maybe they want to grow into a different role, or they want to try another task or project.

And I think that that's one of the hallmarks that I like to encourage when I'm meeting with a potential future partner is, for those people, on your team, that you want to keep happy and we want to make them happy because we want their patients to be happy, is to help them grow in their role and do a SWOT analysis and say, "What do you feel like your strengths are? What do you feel like areas you can improve are?" And I think we have a lot of great directors on the business operations team, and people in culture and lots of companies have it. It's one of the things that we talked about earlier is, will the partner tap into it? In learning development departments, and tutorials, and webinars, and things that we offer because it's there.

But that's one of the great ways to grow culture, is to grow your people and grow your individuals, and then your hospital will subsequently improve and grow from there as well. If we can highlight anything specifically for staff because that's one of the things that happens in these acquisitions. We're so focused on the owners and we're focused on the transaction that... These are employees, these are people, these are staff, these are people who get up early and stay late and give it all to their patients, and really care and love animals and show up every day.

 

So we have a people and culture team that really wants to support those people so that they're not terrified of a new partner coming in and they understand what the expectations are, and we try to limit surprises. But one of the things we'd like to point out is options for those who want to grow in their role or do something different. And I think the larger scale probably allows for that.

Mm-hmm (affirmative). Yeah. I would say too, that we've made some significant investments in training our people and we're big, but we're still small, right? 80 practices are great, but we're also not thousands. And so we still have really that independent touch. So I would say, at my level, I have personally supported multiple practice managers getting some... whether it's going to a conference or growing across the company. We've promoted several practice managers to area manager once the new practice manager has come into place and believe me, those partners, I'm sure it was very hard to let go of that manager, but we say, "Look, they're still in the practice, part of the time, but now they have a small portfolio." And then even some area managers that have stepped into ops directors roles, we have also done some significant investments with our doctors.

We have our newer doctor associates DVM cohort training program that focuses on communication and professional development, and these guys move through it as a cohort. Was built by our people in the culture team. We know that newer veterinarians, even if they get that day-to-day mentorship from the associate... or from the partner, from the owner, there's still just a bigger gap because they're not of the mindset of, "Pull yourself up, by your bootstraps and get it done," they want the support and mentorship in a really extreme way. I would say most newer graduates do not feel ready to go practice medicine, even though in years past, it was probably the fear of being channeled into, "I'm ready, let's do it." And now the fear is being channeled into, "I don't know what to do."

And so we've built this entire doctor training program with our new associates as well. So lots of reinvestment in professional development. I think teamwork is really part of our fabric and part of our culture, and teams have weak players and strong players like Jayson said. And so on the weaker players, the idea is not to cut the chain but to strengthen the links so that they can really come together and pull their own weight, so to speak, to grow the company and make us all stronger.

 

Can you guys talk a little bit to, what kind of role has that emerged throughout the organization over the past year, and what kind of benefits can you highlight for potential future partners in that regard?

Yeah, absolutely. So, I mean, on the operations side, this would be mostly probably post-acquisition clinics. The ops directors, each held kind of all-hands meetings with our groups, our clinics regularly. It was initially every week and certainly throughout the company and it evolved rapidly, right? And it was changing rapidly. So we had kind of an all-hands-on-deck approach. And so, for example, I'll give you a story. So it was 9:30, just about a year ago when Governor Newsom put out the stay-at-home safer order, and it had in there embedded a lot of restrictions of social distancing and masks and things. And I sent out text messages to my boss and HR, and I said, "Guys, we got to get on a call. I don't know what to do here. As of the next day, it's going to change the way we do business."

And we all came together. I had HR on the phone and my VP, Chris Flowers, and I read the guidance and we said... We came up with the bullet points. And I decidedly... because it was about 10:30 at night... sent a text message versus calling our managers. And I said, "Guys, I hate to do this, and I'm here with you, but tomorrow morning as of 7:00 AM, we're doing temp checks, we're doing this, we're doing that." And I got nothing, but thank you from the managers. "We understand. Thank you." Because I think that AmeriVet did the heavy lifting of reading the guidance and looking through it and seeing what we had had to do and what we could take some time to implement or discuss.

So that was piece number one. And then on the reverse end, with curbside, I would say that model, we quickly adopted, we were very quick to move to that and bring that to our partners. And then again with these weekly meetings and then of course the corporate team met on a regular basis as well. It was nothing, but "Hey, this practice is doing that, sharing best practices." And it got turned over immediately. We got it to marketing who could do a one-pager on the process, and then we sent it out to the practices. And so there was this really fast turnover of communication. And I would say, most of getting through COVID was, "Are the corporate team doing the due diligence stuff?" And then the clinics saying, "This is what's working well."

And through COVID we signed agreements with a variety of different agencies, one for VoIP and doing specialized phone systems, and got those integrated, some PIMs conversions, upgrading, whatever was upgrading the internet to handle that, adding phone lines, implementing two-way texts. And then I and the sales support people from these groups, adopting the same approach, me calling them and saying, "Hey, my clinic needs to get on two-way texts tomorrow. Let's get that done." And they jump in and help them. So it really was an all-hands-on-deck situation. I think that that went really well for everybody.

 

What types of practices really fit the AmeriVet mold?

Yeah, it's a good question. I think the ideal partner would be one who understands where we can support you and still... Hey... envisions himself or herself practicing for a while because our goal is to create an environment where the owner is happy, and growing, and enjoying the quality of work-life balance with AmeriVet, long-term. So if they have still enough left in the tank and have that entrepreneurial spirit still remaining and still want to take a leadership spot in their hospital, I think that's probably ideal. Having multiple DVMs and vets in the hospital working along, I think is ideal as well in a good market where we can help grow.

But, again, it's definitely not one size fits all, it's like buying a house. Is going to be trade-offs and things that might be suited for us, and then there are things that might not, but a lot of it is just in the conversation. I think what I'm learning in this world is, it really comes down to the attitude and personality of our partner and vice versa, and trust, and having that good working relationship, and open communication, and someone that we can have both comfortable and uncomfortable conversations with, because in a partnership, you definitely need that, as my wife knows. So I would say, it's someone who's not looking to be purchased and then throw the keys at us and say, "Here you go."

It's definitely someone that still has that emotional investment and financial investment in their hospital and wants to see it continue in their vision and what they created. They didn't become a veterinarian to sell their business, right? They did it for other reasons, right? We're doing this to help support the business, but also add fuel to the fire that ignited them, right? So if we can help rejuvenate by taking some things off the plate, but still get that investment from the owner of leading their side of the hospital into the future, well, we'll have a great partnership.

But we have all shapes and sizes, and I'm probably leaving out some ideal partners, but that's what I think, with this model, really works the best, just being in tune and realizing, we all have positive intent and we're trying to help, support each other and grow. And yeah, I think that would be ideal.

 

Well, I'm sure you probably have some of the few veterinary practice owners or managers that are on this end that probably really enjoyed what you had to say, and if they do, and they're interested in reaching out to you, how can people... What should they do? How can they get a hold of you?

Yeah. Sure. They can email me directly. It's [email protected], or they can go to our website and there'll be directed to our local business development rep. We have seven and they're located in each region of the country. So depending on where the hospital is located, we'll have somebody reach out to them. The website URL is Amerivet.com.

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Well, everyone, thank you so much for spending some of your time. And if you are a veterinary practice owner or a manager, remember your practice already has a full-page live profile at geniusvets.com. It's true. Go to geniusvets.com/start. There's a one-minute video that will tell you all about it. It explains what the benefits are and it's free. They're incredibly valuable, but we're giving them away for free. And why would we do this? It's to support independent veterinary practices across the country, to give you the opportunity to outrank corporate competitors, and just really boost your web presence. Again, 100% free. So go to geniusvets.com/start, check it out today, and claim your profile. So I'm David Hall, co-founder of GeniusVets. Thank you so much for your time. I hope you guys enjoyed it. Join us next week, we've got another fantastic interview lined up, and I'll talk to you then. Have a great day.