Ruffling Feathers Over Pet Insurance

If you’re representative of the majority of small-animal veterinary professionals, here’s an issue that might ruffle your feathers, or at the very least, elicit your strong opinions.

It’s pet health insurance. Though more than 30 years in the making, the industry is struggling to get off the ground, its success hampered by Consumer Reports articles of dubious validity and veterinary fear of HMO-style medicine.

While some of you may feel warmly toward the concept of a financial product that solves client problems, saves pets AND boosts our bottom lines, only a small percentage of us actively recommends it. Even fewer of us participate in disseminating pet health insurance’s potential glories to the tune this still-immature industry would have us dance to.

It’s been convincingly proposed that generalized consumer resentment of the U.S. health care system is largely to blame for this widespread hand-wringing. Will we:

  • Be forced to engage in expensive and odious paperwork?
  • Take on onerous reimbursement detail?
  • Suffer the business end of technicalities too fine-printed to tease out?
  • Manage client wrath when reimbursements fail to materialize?

Scarier still, will our prices be driven down by systemic and insidious insurance company integration into our daily practices? Might we one day see our standards of care and fee structures dictated by non-veterinarians?

Getting Over the Fear

I get it. We don’t have to be physicians to fear that pet health insurance can turn around and bite us in the butt. But is it a rational fear?

Convinced that it’s not, the industry has been working hard to counter the proclamations of the highly vocal, fear-mongering naysayers among us.

First, consider this year’s publication of a National Commission on Veterinary Economic Issues white paper on pet health insurance.

The document expounded on the virtues of the product with the earnest zeal of a rosy-bespeckled MBA student, advancing a thinly-veiled perplexity over why any veterinarian would not roll out the red carpet for a financial product that brings in the bucks and saves pets, too.

In doing so, it offered a comparison we’re all familiar with: dental insurance. Whether you buy into it or not, it’s a product we all basically accept. Sure, a percentage of dentists are none too pleased with it, but they adopt it in droves nonetheless. How else to start a practice?

See? “It’s really not so scary,” its authors effectively argued. Dentistry accepts it. No HMOs. No fee or practice standard requirements.

No fear.

Despite the NCVEI paper’s protests, the penetration of this product in the U.S. veterinary marketplace persists at less than 1 percent. In large part, the paper explains, that’s because the pet health insurance industry requires veterinary recommendations to bring it to the pet-owning masses. Its collective coffers are far too tiny to make a dent in the consumer drive to adopt its wares through direct-to-consumer marketing tactics, especially while we continue to pooh-pooh pet insurance when clients ask.

Now contrast us to Great Britain, where a reported 25 percent of pet owners carry health insurance for their pets. British vets can’t for the life of them figure out why their U.S. counterparts have such a bugaboo about a simple financial product that, in many cases, is the only thing keeping their practices in the black.

Horse Vets Endorse It

How is pet health insurance fundamentally any different from our beloved CareCredit anyway? How is it that most veterinarians continue to sing the praises of veterinary credit programs while so many of us resist recommending pet insurance? Given the banking industry’s track record, can it be rational to find comfort in this model of payment over insurance’s?

After all, it’s noted, our large-animal brethren are comfortable with the animal insurance status quo. How else to fund a colic?

Having recognized its utility long ago, equine practitioners watch us small-animal types tackle the topic with bemused shrugs. In all their years handling the product, they’ve not yet revolted against the prospect of a third-party payment system. “Not as long as it pays the bills,” they say. Not as long as the industry stays out of our medical decision-making and fees––and it has.

Conflict Resolution

Next point: Consider that consumer inability to pay for veterinary services is responsible—by far—for more veterinarian-client adversity than any other factor we face in small-animal veterinary medicine. It’s the most predictably intractable problem we’re forced to confront uncomfortably on a daily basis. It’s also the single most insurmountable obstacle to the advancement of companion animal veterinary medicine. It’s the elephant in the room.

Sure, pet health insurance would not cure the fundamental ills of a haves and have-nots society. But it would almost certainly raise the bar for practice standards and patient care. And isn’t that what it’s all about?

So tell me: How could a small-animal veterinary industry with widespread adoption of pet health insurance look any bleaker than what we currently live with? How much might this pet health insurance scenario have softened our recessionary times?

I anticipate your responses to these questions, expecting you’ll cite the twisted morass of bureaucratic medicine, the “Brazil”-ish flurry of paperwork and signatures, the “Sicko” human health care system we flounder in or maybe the current acceptability of the status quo.

So here’s where I’ll posit the following assessment: It’s not rational to compare the HMO system to pet health insurance. Not while we can trace the foundations of the ass-backwards HMO system to the Nixonian public health care decisions made in the late 1960s.

Once President Obama starts offering presidential proclamations on how pets should be covered, I’ll sit up and start taking notes on the timing of our professional demise.

It’s Up to Us

Until then, veterinarians are in the driver’s seat. We bring enormous power to bear on how pet health insurance will look and feel and work in our practices. It’s up to us to build it to our specs. And it won’t happen unless we accept the inevitable and get involved in its management.

That’s arguably and laudably what the American Veterinary Medical Assn. was hoping to achieve when its Group Health and Life Insurance Trust partnered with Pets Best of Boise, Idaho, a pet health insurance carrier allied with Aetna. Aetna also offers AVMA-GHLIT’s human health care products.

In its announcement of the alliance, the AVMA referenced its own veterinarian-friendly criteria for pet health insurance. Pets Best, it explained, had credibly met AVMA standards for developing a pet health insurance scenario devoid of managed care’s taint. Though it argues the contention, it’s my view that in singling out one carrier on the grounds of philosophical affinity, the AVMA effectively endorsed the company.

The AVMA backpedaled in light of member protests related to unprofessional free-market violations and tampering with a delicate industry’s early development, not to mention a questionable conflict-of-interest scenario. Many veterinarians who heard of the kerfuffle were shocked at the AVMA’s lack of responsiveness to member complaints, especially given the appearance of impropriety revealed in the wake of the announcement.

Some in-the-know veterinarians pointed out that a former senior AVMA official and the head of GHLIT share a nuclear family. Further, said former long-time official now sits on the board of Pets Best, presumably receives compensation for his consulting services, and continues to wield power within our professional organization. How’s that for feather ruffling?

Despite our collective reluctance and an imperfect product devoid of clear consumer protection standards, it’s clear to me that pet insurance is our single best hope for better medicine, more stable businesses and a more satisfied clientele.

But it’s by no means a no-brainer. We need to remain involved in the process of building a stronger, more equitable system of small-animal health care distribution, lest pet health insurance continue to evolve without the direct involvement of the veterinary stakeholders most likely to be impacted: us.

But next time, let’s try it without the questionable business tactics, OK? In fact, let’s just call for a do-over. <HOME>

Patty Khuly, VMD, MBA, is a small-animal practitioner in Miami and a passionate blogger at She earned her veterinary degree in 1995 and her business degree from Wharton in 1997.

This column first apeared in the August 2009 issue of Veterinary Practice News


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