NCVEI issues pet insurance guide

The National Commission on Veterinary Economic Issues on Jan. 19 released the first in a series of position papers concerning major business and economic issues facing the veterinary profession.

In a user guide published for distribution at the 2009 North American Veterinary Conference, the Brakke Veterinary Practice Management Group concludes that an insured clientele has a beneficial economic impact.

The paper, "A Veterinarian's Guide to Pet Health Insurance," provides a balanced overview of the pet health insurance industry, explains benefits pet health insurance can bring to a practice, and gives tips for proactively promoting the use of pet health insurance among clients.

An electronic copy of the study is posted online here.

Dr. Karen E. Felsted, chief executive officer of the NCVEI, said, "Pet health insurance information, whether on the Internet or in a brochure, is often directed to the consumer and/or created to sell a particular policy. We wanted to take an objective look at the topic and give veterinarians the information they need to evaluate the growing pet health insurance industry."

The guide was developed in response to the recent and rapid growth of the pet insurance industry, which grew 20 percent annually from 2003 to 2007, with total growth at 107 percent. During that time, the number of companies offering pet insurance increased from three to 10. This rapid growth means more pet insurance literature in veterinary hospital reception areas and more questions for veterinarians and their staff.

Despite the increase, insured pets still represent a small minority of the total U.S. pet population. Estimates place the number of insured pets in North America near 850,000, according to the NCVEI. The guide contends that one inhibiting factor to the growth of pet insurance is a prevailing fear among veterinarians that widespread use of insurance will result in a managed care system. The paper outlines the differences between the managed care model of human health insurance and the indemnity model of pet health insurance.

"While pet insurance doesn't have the 'managed care' problems that human insurance does, there is some similarity between dental insurance and pet insurance," Dr. Felsted said. "Numerous studies have shown that those with dental insurance spend more annually on dental care than those without insurance.

"Research on the veterinary side also indicates a similar spending increase for those with pet health insurance, as well as increased engagement in their pets' overall health. Since the recommendation of a veterinary professional is often a deciding factor for those considering a pet health insurance policy, we believe this guide gives veterinarians the tools they need to understand pet insurance and its place in helping clients provide a high level of care for their pets."

Although it is an NCVEI-commissioned study and position paper, the AVMA is a member of the commission, along with the American Animal Hospital Association, and Association of American Veterinary Medical Colleges. NCVEI sponsors are Bayer Animal Health, Hill's Pet Nutrition, Merial, Veterinary Pet Insurance, Fort Dodge Animal Health, CareCredit, and the Simmons Educational Foundation.

In November 2008, the AVMA Executive Board approved "Guidelines on Pet Health Insurance and Other Third Party Animal Health Plans." This policy serves as the AVMA's sole policy on pet health insurance, superseding any previous endorsements and other documents on pet insurance. The policy is accessible online here.