Fuel prices drop, yet surcharges remain for diagnostic services

DVMs push back; Antech drafts letter to explain fees

December 18, 2008 (published)
By Jennifer Fiala

Veterinarians are incensed that Antech Diagnostics continues to pass along its energy costs, billing practices for fuel surcharges that range from $15 to $30 as the price of oil plummets to roughly $48 a barrel.

It’s a fee that a high-ranking Antech official says might soon be eliminated. Antech's top brass now are working to calm veterinarians like Dr. Richard McAroy in Merrimack, N.H., who was so angry about the $30 charge he received on his bill this week that he initially called for a boycott of Antech by members of the Veterinary Information Network (VIN). For a company reporting $1.2 billion in 2007 revenue and net income of $121 million, it seems like bad customer relations to continue the fuel surcharge, especially considering the economic slowdown that's destined to impact veterinary practices, he says.

“We should all switch to IDEXX,” McAroy insisted before hearing from Vice President Mark Michael. Now he's sticking with Antech "because the VP of the company called me three times and seemed like he really cared," McAroy's VIN message board post says.

McAroy isn’t the only veterinarian blasting fuel fees. Antech customers exchanging their experiences on VIN are confused about why some veterinary practices are charged a fuel fee and others are not in addition to the varying rates.

“I think that in general, people feel that it’s kind of a rip off,” says Dr. Doralee Donaldson, who practices near Birmingham, Ala. “I think they can handle the extra costs without charging us. It’s annoying at this point, especially when gas is down. There are alternatives I might start considering.”

But a switch to IDEXX, Antech's biggest competitor, won’t save veterinarians from fuel surcharges. According to company spokeswoman Betsy Richards, IDEXX buries a fuel surcharge within its transportation fee. It’s a common practice, she explains — one that many companies now consider standard operating procedure.

“This type of charge isn’t unusual for businesses that depend on courier services,” Richards says, adding that she has no knowledge of how much IDEXX charges or how the costs are broken down among customers. “IDEXX has begun an internal review of its current surcharge, and will consider changes as the economy dictates.”

Higher-ranking IDEXX officials could not be reached.

Darrin Nelson, VCA Antech’s senior vice president, initially was “surprised” that the topic of fuel surcharges warranted the VIN News Service’s attention and chuckled at the notion of a veterinarian-initiated boycott to address the situation. He explained that fees vary largely depending on volume and geographic location.

Yet Antech Diagnostics President Josh Drake appears to take the dissent more seriously, noting that Antech has drafted a letter to clients to explain the fuel fees, which remain, in part, because the company was late to the game of tacking on surcharges as fuel costs soared to record levels. The concept, he says, began when Antech’s vendors started charging extra for fuel, so the company passed those costs on to veterinarians.

“We’d held off for a long time, hoping that the nightmare situation on fuel would reverse itself. When it became apparent that that wasn’t going to happen soon, we instituted a fuel surcharge,” Drake says.

The additional fees from vendors have relaxed but have not disappeared, he adds. In response, Antech cut its December surcharge to its veterinarian clients in half.

“We’ve been very aware that when we go to the pump, the prices are down,” Drake says. “We’re trying to determine when it’s the best time to make an adjustment. The swings in fuel prices have been pretty dramatic, so we’re going to wait a couple of months and re-evaluate. We don’t want to be herky jerky with the fuel charge if costs rise again.”


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