One of the blogs I follow contains the thoughts of Mr Stan. He has written about a recent report that people are abandoning their pets to animal welfare organisations because they cannot afford to keep them. The specific point he addresses is vets' bills. I am not an animal man unless the animal is in front of me on a plate, with gravy, I have never had a pet and do not understand the concept of pets at all, but I do understand that others derive some sort of pleasure from having creatures roaming around their homes. So be it, it's their choice.
The particular example Mr Stan gave was of a visit to the vet more than a year ago which cost £250 for a consultation and the supply of antibiotics for a cat. It made me think of my visit to the dentist last week for an examination and the removal of tar and plaque from my stubby brown teeth. That set me back £70, I need to have one filling replaced which will cost between £150 and £200. It seems an awful lot of money until you think of what is involved in running a dental practice, and I presume similar points can be made about veterinary work.
I happen to know a little about the costs my dentist incurs in running his practice. The surgery is very pleasantly appointed in premises which would otherwise be a shop of some kind. He pays £23,000 a year in rent and business rates to occupy those premises. The practice requires a receptionist (salary, £18,000) and a fully qualified dental nurse (£24,000). He has only recently moved into his present building and had to pay for it to be kitted out for his needs, the building work and purchase of furniture and equipment cost more than £70,000. He requires professional indemnity insurance, insurance for the building and contents and must pay National Insurance contributions for his staff. He budgets for £12,000 each year for the next ten years for capital expenditure to cover the cost of kitting out the surgery and replacing furniture and equipment as necessary. There are also various other necessary costs such as cleaning, electricity and telephones. Before drawing a penny himself or using a single dose of anaesthetic or a taking a single x-ray he has overheads of around £90,000. Assuming he works 45 weeks of the year even I can work out that he must bill £2,000 a week or £400 a day just to stand still. If he wishes to draw, say, £45,000 himself that figure goes up to £3,000 a week or £600 a day.
There will always be some voids when patients don't turn up or no one is booked-in, so out of an eight-hour working day he might only average six billable hours. So, he must bill £100 an hour after the cost of materials used in order to pay his overheads and draw the salary I have assumed for him; actually, make that £115 because he has to charge VAT at 15%. Add in a couple of x-rays, fancy modern white filling materials, porcelain caps and all the rest of the necessary paraphernalia and necessary billing rates might have to average well over £200 an hour even if he restricts his pay to £45,000 (which would be modest in London).
£250 for the examination of a cat and the supply of antibiotics might seem a lot but I think I have some idea why it is so much.
The particular example Mr Stan gave was of a visit to the vet more than a year ago which cost £250 for a consultation and the supply of antibiotics for a cat. It made me think of my visit to the dentist last week for an examination and the removal of tar and plaque from my stubby brown teeth. That set me back £70, I need to have one filling replaced which will cost between £150 and £200. It seems an awful lot of money until you think of what is involved in running a dental practice, and I presume similar points can be made about veterinary work.
I happen to know a little about the costs my dentist incurs in running his practice. The surgery is very pleasantly appointed in premises which would otherwise be a shop of some kind. He pays £23,000 a year in rent and business rates to occupy those premises. The practice requires a receptionist (salary, £18,000) and a fully qualified dental nurse (£24,000). He has only recently moved into his present building and had to pay for it to be kitted out for his needs, the building work and purchase of furniture and equipment cost more than £70,000. He requires professional indemnity insurance, insurance for the building and contents and must pay National Insurance contributions for his staff. He budgets for £12,000 each year for the next ten years for capital expenditure to cover the cost of kitting out the surgery and replacing furniture and equipment as necessary. There are also various other necessary costs such as cleaning, electricity and telephones. Before drawing a penny himself or using a single dose of anaesthetic or a taking a single x-ray he has overheads of around £90,000. Assuming he works 45 weeks of the year even I can work out that he must bill £2,000 a week or £400 a day just to stand still. If he wishes to draw, say, £45,000 himself that figure goes up to £3,000 a week or £600 a day.
There will always be some voids when patients don't turn up or no one is booked-in, so out of an eight-hour working day he might only average six billable hours. So, he must bill £100 an hour after the cost of materials used in order to pay his overheads and draw the salary I have assumed for him; actually, make that £115 because he has to charge VAT at 15%. Add in a couple of x-rays, fancy modern white filling materials, porcelain caps and all the rest of the necessary paraphernalia and necessary billing rates might have to average well over £200 an hour even if he restricts his pay to £45,000 (which would be modest in London).
£250 for the examination of a cat and the supply of antibiotics might seem a lot but I think I have some idea why it is so much.
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5 comments:
Very well put, its a pity our politicians are not so knowledgeable, but then again how many of them have worked in the real world?
Can it really be true that VAT is chargeable on dentisty. They'll be putting VAT on marriage licenses next.
FB,
I am not sure about your numbers. My dental surgery employs two dentists and uses one dental nurse who doubles as a receptionist. They may also have another who works part time.
Both dentists work full time, but in staggered hours.
So the costs per dentist are lower than in your example.
I would be amazed if they were not earning £500 per hour (after all costs).
The bread and butter work, pays the bills, but the real money is earned on expensive surgery such as bridges, implants etc.
They do no NHS work and probably earn £100-£150k plus.
Both are EU nationals and have chosen to work in the UK because dentists earn more here than at home.
Harley St is a different story. A Swedish friend, who lives in Marylebone, flys to Sweden to have dental treatment from her dentist who works half his week in Harley St and half in Stockholm.
As for vets, my one has a constant stream of customers who pay £50 for a 15 minute consultation. Any procedures are expensive because they are generally paid for by insurance. The other money earner for vets is selling very overpriced prescription drugs, but customers generally know that they can get them online.
I would be amazed if my vet, who has a large practice, was not on £200k plus. He is pretty high profile and has lots of rich punters,
Mr James, the figures I gave for rent, staff wages and refurbishment costs came directly from my dentist over a few pints at Saturday lunchtime. The other figures I gave were for the purpose of illustration.
I doubt very much that he is prepared to work for as little as £45,000 or £50,000 and there's no reason why he should.
And as for VAT, dental services are Vat-able (unless the rules have changed since the High Court decided the case of HMRC v Axa in April 2008).
Yes, but my point was that the overheads would be lower if they were shared.
The next time you see him,you might ask how much profit there is in a titanium implant.
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