There’s Nothing Inherently Wrong With Production Pay for Veterinarians

How doctors get paid can influence their behaviors. That doesn't mean they turn into corrupt a-holes.

In veterinary medicine, it’s common to pay veterinarians a base salary, and then give them a bonus depending on the work they do. Their “work” is generally estimated using the money the vet brings into the clinic because this accounts for both the number of cases they see and how much they do with each case. The technical term for this type of compensation is Pro-Sal (Production-Salary), and it’s generally what people in veterinary medicine are talking about when they say vets are “paid on production” or getting “production pay.”

There are some veterinarians who are paid exclusively based on the practice revenue they produce. There is no limit to how much or how little they can earn. This is most often called “straight production,” and it’s generally pretty rare. There are some cases where this arrangement works for everyone, but the veterinarian is shouldering a big risk since they have no guaranteed income and most people don’t want that kind of stress. Since this arrangement is rare, I’m just going to ignore it for our purposes today.

There has been a lot of discussion recently about how veterinarians getting production pay is a real problem. (Here’s one example, and here’s another). I can absolutely respect that some people do not like being paid this way or working with people who are. Lots of practices prefer to pay their doctors a salary, and I would not argue that doing compensation that way is wrong or worse than paying production. I just don’t believe that paying doctors on salary is inherently any better, and production pay has some very real advantages for the doctors, the clients, and the patients.

The Case Against Production Pay

The problems people have with production pay seem to fall into three broad categories: Concerns about priorities, concerns about behavior, and concerns about mental health. Priority concerns revolve around the idea that production-based pay might incentivize doctors to prioritize their own income over patient care or team support. Behavioral concerns typically center on the fear that a desire for higher personal income could lead doctors to “case dodge” (i.e. avoiding appointments with low revenue potential) or to recommend unnecessary diagnostics and treatments to inflate invoices. Additionally, there’s a worry that doctors might support price increases simply for the resulting boost in their own production pay. Regarding mental health, critics argue that production pay discourages taking time off, as vacation days mean a direct loss of income. Furthermore, it shifts management’s attention strongly toward the volume of cases seen and the thoroughness of work-ups as revenue drivers.

I think all of these concerns are valid. I’m just not convinced that there are other ways of paying doctors that are demonstrably better. The main reason is that I believe the type of people who will try to do shady things when they are given the potential to earn a bonus will also do shady things when they are put on salary or paid any other way. Also, the type of practice that tries to take advantage of veterinarians by paying them on production is probably just as likely to take advantage of veterinarians by paying them a salary. In my mind, there simply isn’t a way of paying people that’s going to make them behave or protect them from being taken advantage of if there are slimy people involved. That brings me to the most important thing people need to know about compensation for veterinarians.

How we pay people is NOT A MANAGEMENT STRATEGY

Most of the arguments about compensation seem to involve an assumption that there is no management watching what doctors are doing, intervening when people misbehave, or enforcing any sort of quality control standards. In a well-managed practice, medical quality standards are important. If veterinarians are failing to meet those standards by under working cases or by over-working them, then that needs to be addressed and corrected. There should be a fair way that cases get distributed across doctors, and people who cheat that system should be reprimanded for undermining the culture of the practice and acting in bad faith towards the other vets.

Alternatively, if doctors are paid a salary and refuse to see difficult appointments, don’t practice the quality of medicine expected in the clinic, or regularly block their own schedules so they are unavailable, management needs to step in. No matter how people are paid, medical leaders still need to enforce standards of behavior, professionalism, and medical ethics. They also need to prioritize a positive workplace culture, psychological safety, and employee wellness. If a clinic doesn’t care about these things, then I don’t think any compensation strategy is going to fix their problems.

It’s really a choice of what you want to incentivize

When I was in veterinary school, I did an externship at a large veterinary hospital in Tampa, FL. During my time there, I asked the practice owner if he paid the doctors salary or production. He said he’d done it both ways and what he found was “when the vets were on salary, at the end of the work day I had to chase them out of the doctors office to see the last appointments. When I paid them on production, I didn’t have to do that.”

I believe that very few veterinarians are bad people. There are certainly some bad actors out there (and there are people who really are not their best when they are paid commission) but those people are few and far between. Just ask yourself, if you were paid on production at a veterinary clinic, would you take advantage of people? Would you recommend things people don’t need and cheer on price increases? Would your friends and family behave this way? I suspect your answers are no, no, and probably not.

Incentives definitely impact peoples’ behaviors, but I don’t think most of us become the worst version of ourselves when we financially benefit from the work we do. While production pay can potentially lead to negative behaviors, missed vacations, or increased stress, I believe it is far more likely to incentivize positive outcomes such as:

• Increased accessibility for patients by encouraging doctors to see more cases

• Higher standards of care, as doctors are motivated to perform thorough work-ups rather than taking the easiest path

• Improved efficiency through better delegation and leveraging of veterinary technicians

• A focus on providing an exceptional customer experience

• Fair rewards for those who work the hardest and are most accommodating

• A stronger sense of ownership, where staff training and team efficiency directly benefit the doctor, the clients, and the patients

Again, production pay is not a management strategy. Medical leaders must be attentive and protect workplace culture, client experience, and employee wellness regardless of how they pay their people. Assuming they are accomplishing these goals, it’s really just a matter of what behaviors practices want to incentivize.

If you are paid on production, please take your vacation

When people point out that production pay disincentivizes taking time off, I have to agree. The biggest challenge I have had with getting paid on production is the vacation piece. I remember when I was just out of vet school, had a baby at home, and was focused on making the best life possible for my family. At the time, earning more income felt really important. I never felt “trapped” at work, but I was very aware that my quarterly bonus would be significantly smaller if I took a week off from seeing appointments.

I think this is a real problem with production pay, and it’s something practices have to commit to combatting for the sake of avoiding doctor burnout. The best practices I have seen pay close attention to how many un-used vacation days doctors have, and apply actual pressure to make sure they are eventually taken. I’ve seen clinics go so far as to take doctors off the appointment schedule until they commit to taking some time off (think mandatory long weekend). Of course, this requires a certain type of practice and also some good natured doctors, but I have seen it work.

Regardless of how you choose to pay people, some things just need to be managed and other things come down to the individual employee. I don’t think practices can ever make veterinarians take time off if the vets don’t want to. I’m regularly bothered at how many vets use their vacation days to work relief shifts, and how many others use their weekends to work in emergency clinics. Don’t get me wrong here, I’m not judging these hard working folks. I just hate that they have to work this hard to support themselves. In these cases, I’m not convinced we are helping people by giving them a set salary and schedule that doesn’t flex to meet their needs.

The pressure to perform isn’t going away

Some veterinarians have shared that production pay can lead to being overworked. They feel management may funnel excessive cases their way, justifying the workload simply because the veterinarian is being financially compensated for the extra effort. Others have said that they despise having to answer questions about how many or few patients they see, and how they handle their cases. I think both of these situations are hugely frustrating for doctors, and also that they are probably not going away.

I don’t like it, but we seem to be entering a new era of focus on efficiency and productivity. I see fewer and fewer practices just letting veterinarians see who they want and work up cases the way they want. Requests for vets to take more cases and produce more revenue are only increasing as our profession becomes corporatized. My worry is that taking production bonuses away from veterinarians will not lead to a decrease in requests to fit in more patients, but a scenario where vets are being asked to fit more in and not being paid for the extra mental, emotional, and physical labor these cases require.

Not Perfect, But Not the Worst

In summary, I think a lot of the headaches people have with production pay are really headaches with management. Production pay is a good way to incentivize behaviors that lead to better client experiences, as long as bad behaviors are identified and addressed. If you want to get paid on salary, then I think that’s great. If having the potential to earn bonuses matters to you, I think that makes a lot of sense too. The most important thing, by far, is that both the veterinarian and the practice have a clear understanding about what is expected and how meeting those expectations will be compensated.