Focusing on pet insurance: The myths and truths


Develop a crystal-clear picture of how pet insurance works.

Last year, one of Dr. Robin Downing's clients brought in an older German shepherd with gastric dilatation and volvulus syndrome. Dr. Downing knew what she needed to do to save the dog: remove his spleen and keep him in the ICU for five days. This care came with a $5,000 price tag, which the client paid out of pocket.

Two months later, the client's other dog, a 3-year-old German shepherd, arrived at Dr. Downing's clinic in Windsor, Colo., with the same condition. The client couldn't afford to pay for the care a second time around, so she made the painful decision to euthanize her pet. "When this client first brought in this dog as a puppy, and at several following visits, we encouraged her to buy pet insurance—but she didn't," Dr. Downing says. "This was a fixable problem. What a horrifying way for the client to learn this lesson. That dog didn't have to die."

Dr. Mona Rosenberg, a veterinary oncologist at City of Angels Veterinary Specialty Center in Culver City, Calif., is currently treating a 1-year-old cat that had a severe upper-respiratory infection and developed pneumonia when the client adopted him. The client didn't expect the cat to live—but he did.

The client has an insurance policy for the cat, but the company won't cover anything associated with the upper-respiratory infection because it considers it a preexisting condition. "Now the cat has benign cancer of the jaw, which will become fatal if we don't treat it," Dr. Rosenberg says. "There's a clear date of diagnosis, so it's not a preexisting condition." Still, the client's finances are limited, so she's waiting to proceed with treatment until her pet insurance company decides how much of the cat's care it will cover.

These two cases outline the importance of pet insurance and how it can impact a pet's care. But practitioners have questions and concerns about pet insurance. And clients, despite mounting veterinary bills, aren't completely sold on it.


Dr. Downing, however, is convinced of the benefits of pet insurance. She has experience with it firsthand as a pet owner—and she purchases pet insurance for her team members as a benefit. Because of this knowledge, Dr. Downing and her team talk confidently to clients about insurance at the very first puppy or kitten visit and at every subsequent visit. It also allows Dr. Downing to practice more thorough medicine with less resistance from clients.

Not sure if pet insurance is the right fit for you and your clients? To clearly understand how it can be a benefit, you've got to look at how it works. Compare it to car insurance, another type of indemnity insurance.

If you have car insurance and you get into an accident, you're covered. "That doesn't mean you wake up in the morning and say 'I'm going to exercise my car insurance this morning and crash into someone,'" Dr. Downing says. "The same is true for pet insurance. It's insurance against accident and illness." In essence, the insurance company is betting that your pet will never have an accident, and you're betting that at some point, your pet will.

Pet insurance is a contract between the pet owner and the insurance company. The client pays for care out of pocket, completes the necessary paperwork, submits it to his or her insurance company, and the company reimburses the client based on the plan in place.

The veterinarian has a certain level of responsibility and, depending on the plan, that responsibility varies. Keep in mind, says Dr. Christine Merle, MBA, CVPM, a consultant with Brakke Consulting in Dallas, that the goal of pet insurance is not for clients to recoup costs—they might not make a financial return on their investment. Pet insurance is about risk management for serious illness and emergency emergencies.

So if it's that simple, why hasn't pet insurance caught on? Clients and veterinarians alike are leery of it. "We don't like the word 'insurance,'" Dr. Merle says. "We hear a lot of negative things about the human health insurance industry, so it's hard to think that pet insurance can be a positive thing."

Clients also have fears about the limitations of pet insurance. A colleague of Veterinary Economics Editorial Advisory Board member Dr. Jeff Rothstein, MBA, recently treated a client's dog for cancer. The client's pet insurance capped out at $1,500.

The client couldn't pay for the rest of her dog's care and she opted for euthanasia. "There are still a lot of misconceptions out there about what insurance can and can't do," Dr. Rothstein says. "Depending on a pet's susceptibility to genetic diseases, it can be pretty restrictive. So is it really that beneficial?"

Clients now have more options than ever in choosing a plan. In the last two to three years, Dr. Rothstein says, with more pet insurance companies launching all the time, there are tons of options out there—every company and every plan is different.


Let's set one thing straight: the experts and practitioners we talked to agree that pet insurance is a good thing. It gives clients the option to seek care for their pets that they might not otherwise.

And for Dr. Rosenberg's cancer clients who often can't afford her treatment plans, it can be difficult to make the decision to treat a pet if the outcome isn't going to change. "If more clients had pet insurance, it would make it easier for them to feel comfortable about moving forward with treatment, especially in my world where most patients we treat are terminal," Dr. Rosenberg says.

Every client has their own level of risk they're willing to tolerate. So what about your tolerance level when it comes to the ins and outs of pet insurance? You've likely heard the horror stories about paperwork, managed care, and customer service issues. But your experiences with pet insurance—and clients'—don't have to be negative. Here's more on the pros, cons, myths, and truths to help you see pet insurance clearly.

MYTH: Extra paperwork will overrun your practice.

TRUTH: Paperwork on your behalf is fairly minimal.

Clients may need you to help them fill out the insurance company's paperwork or claim form, which often includes the date of diagnosis, what the diagnosis is, your signature, and a copy of the receipt. Sometimes the insurance company may require additional information, such as a copy of the medical record. Just what you need, more paperwork, right?

But before you cringe at the thought, think about how you could make the paperwork a routine part of your day. Take a proactive approach. Instead of waiting for a client to bring in the paperwork, keep a copy of the client's claim form on file and make a note of it in the electronic medical record. Print a copy of the form and hand it to the client. Print two copies of the receipt.

You already provide clients with great service every day, so remember that helping clients with pet insurance paperwork is just another part of that great service. Going the extra mile is what sets your practice apart from the crowd.

The goal of pet insurance isn't to create extra work for the veterinarians. "It's about providing a service that's beneficial to clients and your practice," says Dr. Karen Felsted, MS, CPA, CVPM, CEO of the NCVEI. "If it allows your clients to do more things for their pets, that's great for the pet, the client, and you as the veterinarian." Occasionally, yes, you may end up doing some extra paperwork, but if a client opts for a $1,500 procedure that they wouldn't have considered without pet insurance, isn't it worth it? Think about how often you call other veterinarians to get copies of records for clients. You could just ask the client to bring the records in, but you do it as a courtesy. Signing off on clients' pet insurance paperwork is about offering them that same courtesy and excellent service.

MYTH: Pet insurance will create a managed-care nightmare.

TRUTH: That's a longshot and you have all the control.

Comparing pet insurance to human healthcare is like comparing apples to oranges. The pet insurance model isn't similar to managed care and it would take major changes in the profession to steer it that direction.

A big part of what has made human healthcare a mess is the contracts between three parties: the insurance company, the physician, and the patient. The insurance company has influence on the doctor's decisions. It can even exert pressure on the physician to practice medicine a certain way, whether offering certain prescriptions or treatments.

It's hard for the pet insurance companies to put pressure on veterinarians because the companies don't have a contractual relationship with them. "No one wants the veterinary profession to suffer the nightmares that human doctors are going through with insurance," says Dr. Felsted. "It's not likely to happen because the insurance products are different and the relationship is between the insurance company and the pet owner—instead of with the veterinarian. Plus, she says, only a small percentage of pets are covered or expected to be covered in the future.

So instead of comparing apples to oranges, let's look again at the car insurance model. You hope you don't get into a car accident, but if you do, the insurance company pays you an amount based on the value of your vehicle. The goal is to never use it.

Pet insurance follows the same model. Despite this, there is a fear in the veterinary community that pet insurance will turn into a nightmare like human health insurance. "For us to say that it will never go in that direction wouldn't be true," says Dr. Merle. "But it won't dominate because of the independent attitude that veterinarians have. Remember 15 years ago, when everyone was scared that corporate practices would take over? That hasn't happened."

Here's why a change in the current model isn't likely: Human healthcare is very specialized. To get the go-ahead to see a specialist, patients must go to a primary care doctor first. This minimizes costs because patients don't make appointments with specialists when all they really need is a primary care doctor.

In contrast, veterinary medicine predominantly consists of general practitioners—far more general practitioners than specialists. And even though you refer to specialists, it's not a requirement for a specialist to conduct the treatments like it is in human medicine. Also, there are no cost savings in the veterinary world if you minimize the number of people going to see specialists.

If managed care were to work in veterinary medicine, there would need to be a very large group of practitioners willing to participate. Practitioners would have to choose to be involved—it wouldn't be forced upon anyone. The industry has a great deal of control over not letting pet insurance turn into managed care—you hold the cards.

If you don't want to take the next steps and form networks, just say no. "We're already in a profession that doesn't charge what it's worth," Dr. Downing says. "So why on earth would we sign up for managed care? I hope that's a huge motivator for the profession not to go down that path."

MYTH: Clients will blame you when things go wrong.

TRUTH: Do what has been asked of you, and you'll help prevent clients' headaches.

If there's a downside to pet insurance, it's the frustrated clients who come to you for answers. But this is true of just about everything you recommend to clients. "There's not a product out there that somebody doesn't complain about, either fairly or unfairly," Dr. Felsted says. "It doesn't matter what you do, they'll complain." Odds are at least one client will have a bad experience with something you recommend, whether it's a boarding facility, a groomer, or a pet food. So focus on the majority—the positive experiences—not the minority. And handle any complaints as you normally would—with patience.

If you're going to recommend a pet insurance company to clients, some responsibility falls on you to research a provider. Find out things like: How long does it take to be reimbursed? How's the company's customer service? What does the plan absolutely not cover?

"If I'm going to make a recommendation to a client, whether it's a product, service, or colleague, I'd hope that I'd be knowledgeable about the expectations that the client should have," says Dr. Merle. "The service the client receives should be equal to or greater than what I'd give the client. If it's not, it's my job to warn the client and let him or her know how to set expectations."

Take for example the referral process. You work with a one specialist who is really great with customer service and has a warm bedside manner. Another specialist you work with has great expertise, but his bedside manner is less than warm. You'd let the client know those things and give him or her an idea of what to expect. That's what offering exceptional client service means.

In regard to pet insurance, you can manage clients' expectations the same way and make sure you understand what may cause a problem with a claim or what types of exclusions exist. Clients will appreciate the heads-up and that you're willing to go to bat for them.

Educate yourself about the insurance company you're recommending or the plans your clients use. Some plans may require you to submit the medical record before the client turns in any claims. If the insurance company needs a copy of the medical record, supply it. Research what's considered a preexisting condition and don't send in a claim for it. That will only set the client up for disappointment.

Provide what the company needs, and find out what you can do in the future to ensure a claim is covered. "It's a learning process," Dr. Merle says. "What makes logical sense to the insurance companies might not make sense to veterinarians." So make sure you do what has been asked of you. This will go a long way in preventing problems.


You can take a big lead in educating clients about pet insurance. Since it's something they might not know about otherwise, you can further position yourself as the authority figure on their pet's care. You want clients to come to you for information first—you probably don't want them getting information from the Internet or their neighbor's cousin. Of course, the last thing you want is to be an unpaid salesperson for the insurance companies, right?

Think about this: You make recommendations every day about things that are good for clients and their pets—things you don't necessarily sell, like obedience classes, boarding, and food. If you believe in it, why not tell clients about it? If you're going to endorse a pet insurance plan, you must go beyond, "Here's a brochure, figure it out."

Dr. Downing offers pet insurance as part of her benefit package for her employees. If you work for her for one year, she'll pay to insure one pet. If an employee works for her for two years, she'll insure two pets, and so on.

Dr. Downing sees this as an opportunity to help her employees seek the best care for their pets. She can provide her team with a way to prevent economic euthanasia. Dr. Downing doesn't want any of her employees to choose second-rate care at another facility, no care at all, or euthanize a pet because of their economic situation.

Think about what you would do as a pet owner, not as a veterinarian. "We have an obligation to our clients to help them spend their money wisely," Dr. Downing says. "It's taking on a new urgency. We have an obligation to advocate on behalf of the pet. If we take that role seriously, we have to inform clients about their options."

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