Pet health insurance: what veterinarians should know

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Interview by R. Scott Nolen

The option of a third party paying for a portion of a pet's annual vaccinations or covering part of the expenses for costly radiation treatments appeals to a growing number of owners.

Yet many veterinarians worry that if pet health insurance takes off, they are doomed to a fate similar to the human medical profession, whose pricing and service options are largely governed by insurance companies and health maintenance organizations.

By way of helping practitioners make informed decisions about what some consider a trend in veterinary medicine, the AAHA, during its 67th annual meeting, assembled a diverse panel to argue the merits of pet health insurance.


Dr. Kathleen Neuholt brought a unique perspective to the group: the Indiana veterinarian is also a practicing podiatrist, and has firsthand experience dealing with third-party providers. At Dr. Neuholt's family foot clinic, most of her patients are insured, whereas few are covered at the animal hospital where she works.

The costly, time-consuming procedures required by health insurance companies for doctors to see patients and receive reimbursement has convinced Dr. Neuholt that pet insurance "would be a nightmare for my beloved profession."

At her foot clinic, all medical procedures and diagnoses are extensively coded and filed electronically via software that can require expensive updates. A staff person devoted solely to verifying and filing claims is usually necessary, Dr. Neuholt said. Some insurance companies randomly review charges, which can delay reimbursement by several months.

If veterinary medicine were to go the way of insurance, Dr. Neuholt speculated that for veterinarians to "survive" the world of third-party providers, practice consolidation would be a must, but with the adverse results of increased competition and higher costs.

On the other side of the argument were Dr. David Goodnight, of Veterinary Pet Insurance; Dr. Tomas Neuzil, of Petshealth Insurance Agency Inc; and Mark Warren, of the Canadian-based PetCare Insurance Brokers Ltd.

Dr. Goodnight, executive vice president of business development at VPI, the oldest and leading insurer of pets, with nearly a million policyholders, said, "If I thought for a moment that what I was doing was heading [the veterinary profession] down the wrong road, I would quit today."

He and Dr. Neuzil, director of veterinary services at Petshealth, explained that what their respective companies offer is, technically, property and casualty insurance, not health insurance. This distinction separates them from human health insurance providers, they said.

"Look at us as supplemental indemnity insurance," Dr. Goodnight explained.

Claims forms are uncomplicated, they said, and pet owners are reimbursed a portion of their veterinary bill according to their policy. Policyholders are free to choose their own veterinarians and services.

Pet insurance has been available for several years — VPI was started in 1980, Petshealth in 1994 — yet an overwhelming number of pet owners are not policyholders. PetCare chairman and CEO, Mark Warren, said that around 80 percent of pet owners in North America do not know the service even exists.

That low awareness is not a reflection of product quality, but a consequence of nearly nonexistent marketing and advertising, he said.

Warren made the case for pet insurance by noting a number of recent factors that make it more appealing to owners: the strengthening of the human-animal bond; greater longevity of pets that, as a result, face more health complications; and the rising cost of veterinary health care.

For pet owners, insurance reduces the monetary risks of caring for a pet and lessens the frequency of "financial euthanasia," Warren said. Veterinarians and their staff will benefit because insurance would be the chief way for practices to grow financially.

In Warren's opinion, the human health insurance model is not a true model for pet insurance because the companies neither control the pricing at veterinary practices, nor do they dictate what procedures are allowed. Policyholders can also shop for the practitioner who best meets their price range, he said.

Closing the panel presentations, Owen McCafferty, a certified veterinary practice manager, advised veterinarians to "stay out of the fray."

Pet health insurance will likely become a fixture of veterinary medicine, he said, but practitioners must make every effort not to become confused with insurance providers.

"Do not be a part of the process for purchasing or selling insurance," McCafferty said. "Stay in the area of being the doctor of veterinary medicine."