Among veterinarians, likely no subject elicits a wider variety of reactions than pet health insurance. The topic has staunch supporters and steadfast detractors, with every variance in between. Most veterinarians, however, are indifferent; they have no meaningful opinion. Many of them agree that clients with insured pets make quicker decisions about treating complicated or expensive medical conditions. Unfortunately, busy practitioners often don’t have the time to educate themselves or their clients about this seemingly complex subject.
The Good
The medical and dental professions and their patients have clearly benefited from health insurance. The table below shows the mean annual 2022 income of physicians, dentists and veterinarians and their respective share of insured patients. More importantly, the table reveals how the low percentage of insured pets depresses revenue flow to veterinarians.
| Mean Income | Insured Patients | |
| Physicians | $251,990 | 90% |
| Dentists | $180,900 | 76% |
| Veterinarians | $129,900 | 3% |
Worthy of note is that the table shows the percentage of insured U.S. residents under age 65. Older patients are covered by Medicare and, in most instances, supplemental insurance.
While the figures indicate pet insurance’s low penetration rate, veterinary practices that aggressively educate clients about the product report insured patients ranging from 10% to 40%. Those practices benefit from:
- Increased client compliance.
- Fewer economic euthanasia requests.
- Less compassion fatigue by staff members.
- Enhanced veterinary care and longer pet lifespans.
In general, pet insurance positively protects and enhances the human-animal bond.
According to the North American Pet Health Insurance Association, insurance influences practice revenue. A NAPHIA study found that clients spent 29% more a year on veterinary care if their dogs were insured. Covered cat owners spent a remarkable 81% more. Similarly, a study of dog owners’ attitudes toward pet insurance, conducted by the American Veterinary Medical Association and Mississippi State University, found that insured clients spent more on each medical event without increasing the number of visits.
The Not-So-Good
Pet insurance was introduced in the United States more than four decades ago by veterinarians who recognized how the cost of care limited access to it. Since then, the number of insurance carriers has jumped to more than 30. The combined marketing efforts of these carriers, plus aggregators (licensed companies that provide comparative surveys of multiple carriers for prospective customers), have achieved only a 3% market penetration.
In today’s market, some U.S. veterinarians are concerned that a wider reliance on pet insurance will eventually result in a duplication of the administrative problems associated with human health insurance. However, what those veterinarians don’t understand is that pet insurance is a contract between the carrier and the pet owner. That contractual difference means veterinarians don’t experience the insurance dictatorial problems that physicians loath.
Historically, all pet insurance carriers utilized a claims adjudication protocol described as the “reimbursement model.” The process requires the pet owner to pay veterinary expenses upfront and then submit proof of payment to the insurance carrier. The carrier then subtracts any deductible or co-insurance from the invoice and pays the pet owner.
About 10 years ago, insurance carrier Trupanion recognized that requiring pet owners to pay the entire bill upfront was the likely reason for the low percentage of insured pets. To solve the issue, Trupanion developed claims-processing software that resides on a veterinarian’s office computer. The function of the software is to electronically submit a copy of a pet owner’s invoice in real time to Trupanion, resulting in a quick adjudication of the claim. Trupanion then directs the hospital team member to collect the deductible, co-insurance, examination fees and any other expenses not related to the medical services provided. Instead of being sent to the pet owner, the policy’s cash benefit is deposited quickly into the practice’s bank account.
As Trupanion continued developing and testing the software necessary to process an insurance claim in real time, the company obtained a series of patents protecting both the design and function of the software. Those patents prevent competitors from copying or emulating the same type of reimbursement model.
The Indifferent
The long-anticipated benefits of a broader use of insurance have not materialized in the United States because of pet owners’ poor acceptance of the common reimbursement product. In addition, the affordability of veterinary care remains an issue. Just as concerning are after-hours emergencies that see insured pets being euthanized because their owners can’t afford to pay a large percentage of the estimated treatment costs before medical care begins.
Social media is flooded with advertisements claiming that insurance provides peace of mind. But as we can see, is that true?
Veterinary medicine is a compassionate profession, and its practitioners are, by nature and training, problem-solvers. The profession and insurance industry need to collaborate to reestablish a sense of emotional accomplishment for veterinarians and a sense of comfort for pet owners.
As The Copia Institute’s Mike Masnick wisely pointed out, “Great breakthroughs tend to come not from a single mind, but in different people looking at the same problem, learning from each other and building on each other’s work. By throwing tollbooths into that process, you slow down the innovation.”
OVERSEAS
In contrast to the low market penetration of pet insurance in the United States, 90% of dogs and 50% of cats are insured in Sweden. In the United Kingdom, 54% of dogs and 41% of cats are insured. U.K. veterinarians who proactively promote pet insurance report insured patient rates in excess of 70%.