At its 2019 convention, the American Veterinary Medical Association revised its pet health insurance policy to be more supportive of client education. The AVMA’s official policy now begins: “The AVMA endorses the concept of pet health insurance that provides coverage to help defray the cost of veterinary medical care and encourages veterinary health care teams to proactively educate their clients about the existence of such resources.”
Many veterinarians have questions. What was behind the policy change? How can a veterinary practice best capitalize on pet health insurance? Are there risks to endorsing insurance?
The AVMA’s Involvement
When the AVMA hired Dr. Michael Dicks, its first chief economist, in 2013, the fledgling Economics Division started a systematic program to learn more about factors that influence the demand for veterinary services. One research initiative involved the AVMA’s commissioning a team of insurance experts at Mississippi State University to study the effect of pet insurance.
After conducting two surveys and a sophisticated economic analysis, the MSU experts determined that pet insurance positively influenced the demand for veterinary services. They concluded that owners of insured dogs spent as much as $216 more a year for veterinary services than did the owners of uninsured dogs.
About the time of the AVMA project, the North American Pet Health Insurance Association, an industry trade group, was conducting research, too. NAPHIA commissioned Brakke Consulting and a large market research firm, Lieberman Research Worldwide, to survey pet owners and veterinarians.
The NAPHIA studies corroborated the AVMA work. NAPHIA found that dog owners with pet insurance spent on average 29% more a year on veterinary care and cat owners with insured felines spent an astounding 81% more. (The MSU study did not include cats.)
Further, the NAPHIA research among veterinarians showed the majority of companion animal practitioners — 56% — wished that all their patients were insured. Only 5% of practitioners said they strongly opposed the use of pet health insurance.
Refining the AVMA Policy
With new research data in hand, the AVMA’s Veterinary Economic Strategy Committee decided to review the published policy on pet health insurance.
“The old policy wasn’t anti-pet insurance, it was basically neutral,” said committee chair Peter Weinstein, DVM, MBA. “The AVMA and NAPHIA studies clearly showed that more use of pet insurance is in the best interest of pets, as well as veterinarians. We felt the AVMA policy should reflect that.”
Dr. Weinstein also noted that an article in the financial press indicated that as many as 40% of pet owners were not aware that pet health insurance existed.
Rather than completely rewrite the AVMA policy, the committee, working in collaboration with the AVMA’s Council on Veterinary Services, added just 17 words to the existing policy: “and encourages veterinary health care teams to proactively educate their clients about the existence of such resources.”
“As pet owners’ primary advisers on pet health,” Dr. Weinstein said, “it falls to veterinarians to educate them on all aspects of responsible pet care. If pet owners are more aware of the existence of pet insurance and are encouraged to explore it, then potentially the pet owner, the pet and ultimately the veterinary practice benefits.
“We expect veterinarians to educate pet owners about heartworm and flea control, essential vaccines, and about financial tools such as Care Credit,” he said. “It’s also incumbent on veterinarians to educate their clients about the availability of pet health insurance.”
Educating Clients
NAPHIA found that while most veterinarians were supportive of pet insurance, their efforts were limited to putting brochures in the waiting area and perhaps adding them to puppy and kitten kits.
“Unfortunately, the research showed that this passive form of education just wasn’t working,” said NAPHIA’s executive director, Kristen Lynch. “It takes face-to-face communication to educate pet owners. Brochures are good handouts after you’ve talked about the topic.”
Using its research and interviews with veterinary practices that were successfully educating clients about insurance, NAPHIA published a best-practices guide available for download at http://bit.ly/2OoB8mn.
Among the most important best practices were:
- Put someone in charge; have a pet insurance education champion.
- Get the entire team on board, meaning veterinarians as well as staff.
- Talk to clients about pet health insurance. Don’t rely on literature only.
- Provide value-added services such as submitting claims for clients.
- Take advantage of no-cost trial policies when available.
Finding What Works For You
It’s one thing to know what to do and another to know how to do it.
San Tan Animal Hospital in Queen Creek, Arizona, learned by trial and error how to best educate clients. The rapidly growing, seven-doctor practice, just 4 years old, had worked previously with practice management consultant Wendy Hauser, DVM, who later joined ASPCA Pet Health Insurance as veterinary relations director. As part of a research project Dr. Hauser was conducting, San Tan Animal Hospital agreed to set a goal of educating clients about pet health insurance.
“We were always in favor of pet health insurance,” said Kristi Kruger, one of two practice managers. “But we were like most practices, I guess. We had brochures available and would answer questions when asked.”
Working with Dr. Hauser, San Tan started a yearlong program of client education, making it a practice-wide priority. Conversations were held, brochures were placed in new-client folders and clients were encouraged to investigate ASPCA’s 30-day no-cost trial policy.
With the insurer’s help, San Tan kept track of new policies purchased by clients. While San Tan discussed other brands of pet insurance as well, it tracked only new ASPCA policies.
“Even with all this effort, after three months we saw that what we were doing wasn’t working. We just weren’t getting much traction,” Kruger said. “It was shocking and frustrating.”
At the next team meeting, the practice managers challenged the team. “We said: ‘We all believe in this. We’re trying. It’s not working. What can we do?’” Kruger recalled.
At the start of the initiative, the education burden was placed on the front desk, a very hectic place. The client service representatives were busy checking patients in and out, scheduling follow-up appointments, ringing up purchases, answering questions — well, you know how it is.
During the team meeting, the veterinary nurses stepped up.
“The nurses volunteered,” Kruger said. “They said, ‘Our client conversations are about the health of the pet. It’s a perfect time to educate them about pet insurance.’”
Almost overnight, the practice started seeing results — from three or four new patient policies a month to 40 or more. To the practice’s surprise, the approach worked with cat owners, too.
More Than Money
With more and more patients insured, San Tan saw measurable revenue benefits. But there was more to it than that, Kruger said.
“We’re all sensitive to the stress when clients say ‘no,’” she said. “It’s tough on the doctors and it’s tough on the nurses presenting the treatment plan. With insured pets, we don’t hear ‘no.’ Sometimes clients don’t even ask about cost. They just say ‘do it.’ There is great satisfaction for all of us when we can do for the pet what it really needs.”
Dr. Hauser noted that while nurses made the initiative work at San Tan, other practices might have a different approach. Each practice must do what is best for educating clients because there’s no one-size-fits-all, according to Dr. Hauser.
“It’s also important to have realistic expectations,” she said. “Currently, perhaps 2% or 3% of patients are insured. If you work hard at it and get 5% or 10% of patients insured, that’s a home run. And the momentum will build.”
A Matter of Scale
After the AVMA House of Delegates voted to revise the pet health insurance policy, a few negative comments showed up on veterinary message boards. The sentiments were what you might expect:
- “No way I’m selling insurance.”
- “We don’t want insurance companies to do to vet medicine what they did to human health care.”
Dr. Weinstein has a different viewpoint. “We need to recognize that change alone is uncomfortable and when the status quo is disrupted, especially with veterinarians, there is no shortage of concerns brought forth,” he said. “What is necessary is that every pet-owning client be aware of pet insurance, and have the opportunity to explore whether it’s a good fit for them or not.
“After all, we have a responsibility to our patients, and by advocating for the consideration of pet insurance, we can be confident that more patients are going to get more and better care. Research proves it.”
There’s a purely mathematical reason why veterinarians have nothing to fear from pet insurance. Look at human medicine. It’s a $3.5 trillion business in the United States. More than 90% of Americans have health insurance. Insurance companies pay providers directly.
By comparison, veterinary medicine is a $27 billion industry, according to the AVMA. Only 2.3% of dogs and less than 1% of cats are insured, according to NAPHIA. And in most cases, pet insurance companies reimburse pet owners, not providers. From a practical standpoint, the economic influence over doctor decisions in veterinary medicine is virtually non-existent.