Which Side of the “Truth” Are You On
The “truth” about pet insurance always depends on what “side” of the insurance you are on – the buyer of the insurance or those benefiting from those that buy insurance. The “truth” for clients that purchase pet insurance is certainly different than the “truth” for us “in” the veterinary industry. I work in a veterinary hospital and let’s face it pet insurance would be good for the veterinary industry – that is the “truth” for us. Insurance companies that sell pet insurance design policies to make a profit so the expansion of pet insurance would surely benefit them as well. But the very reason that it benefits us puts all veterinarians in a conflict of interest when recommending pet insurance to our clients – wouldn’t you think? It seems the insurance companies only see it one way – good for everyone!
The real question that must be answered: “Is it good for our clients?” And of course that’s where the debate begins and maybe the controversy too. But before I go to far into the debate lets go back and take a quick refresher on pet insurance and make a simple comparison with a type of insurance we are all familiar with, our car insurance. Like car insurance pet insurance is a type of indemnity insurance. Crash your car and your car insurance company pays – all things being equal. But most of us don’t crash our cars and don’t make a claim. But do we feel ripped off at the end of the year when we’ve paid our premiums but haven’t made a claim? Not likely. That’s a comparison the pet insurance industry would love us to make. Gee aren’t we lucky we didn’t wreck our car or have Fido hit by a car!! But is that how a pet owner should feel about pet insurance? I’m sure pet insurance companies want pet owners to feel that way. But as consumers we would think that pet insurance is similar to health insurance and that’s where consumers are mistaken. The reality is pet insurance is really NOT like human insurance because pet insurance is not true medical insurance it is indemnity insurance. With indemnity insurance insurers generally only pay a portion of the costs incurred by the policyholder (i.e. there are deductibles, co-pays, exclusions, policy caps, etc) as specified by the policy – so if you can find the fine print read it carefully.
So we ask the question again: “Is this good for our clients, does it provide an economic benefit to our client?” Again there is not always a straightforward answer. If the client is simply looking for “peace of mind” when a veterinary medical disaster occurs, insurance may help reduce the costs of such a calamity to such a degree that they can afford the expenditure – these individuals may find value in pet insurance. Still others may be looking for more of a financial return on their investment in pet insurance and these individuals may not be as satisfied with the benefits. But again this is only part of the answer with pet insurance. In today’s difficult economic times many clients, even if they had the best and most comprehensive pet insurance, could not withstand a major medical veterinary calamity or take advantage of their pet insurance because they could not afford to pay the “up front” costs to get the procedure done and then wait to be reimbursed. This inability to pay the veterinarian would make any pet insurance basically useless or at best only part of the answer without help from a third party provider (someone that can lend you some money to pay the vet before you get reimbursed) such as Care Credit. There are pet owners that will purchase the more comprehensive wellness programs and expect most, if not all of their “routine” veterinary costs to be covered, and common sense dictates that only a portion will be covered (visit my website at www.wvah.net look for pet insurance and use our “calculator” to estimate how well you would fair with your pet insurance given your vets prices).
While most of the articles extolling pet insurance gloss over the potential coverage “shortfalls” Dr. Christine Merle, a consultant with Brakke Consulting in Dallas states 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 emergencies. While this is exactly how the pet insurance industry wants consumers to think about insurance pet owners might think twice about pet insurance when they are told not to look at the financial returns. Imagine if your financial advisor told you that? It is no wonder that in one article the author states that the “experts and practitioners we talked to agreed that pet insurance is a good thing” (for themselves) when they also state that “pet insurance is not for clients to recoup costs.” But we still haven’t determined whether or not this is good for pet insurance holders.So let’s look to our veterinarian for help and see what she has to tell us because we trust her to be an honest broker in this ordeal.
Here’s What Veterinarians Are Hearing And From Who
Now let’s look at what’s happening in the veterinarian’s world, the person the average pet owner looks to for advice on pet insurance. But first this important news flash – “most veterinarians and those working in veterinary hospitals know very little about pet insurance, we’re just like the average pet owner.” While veterinarians are genuinely interested in learning about pet insurance they are skeptical about “insurance” based on all of the horror stores they hear about human health insurance and how it might affect the way they practice veterinary medicine. So how are we in the veterinary industry finding out about pet insurance? Well not surprisingly primarily from the pet insurance industry itself, professional associations or professional journals that may not necessarily be completely objective (guess who advertises in those journals). As usual the internet also has vast amounts of information and we will examine that later. Veterinarians’ interest in pet insurance has sparked our professional associations to study the topic and insurance companies have already seen an opportunity to put their spin on our perceptions of it – the game of persuasion has begun. One of the first major studies of the pet insurance issue was completed this year by the National Commission on Veterinary Economic Issues (NCVEI). While the report is well written and thorough it is rather one sided – the side of the veterinarian – and also relies, in part, on studies conducted by the pet insurance industry – hardly an objective party in this analysis. The report articulates the benefits insurance has bestowed on the dental industry and suggests the same would happen to veterinary medicine but on a smaller scale. The study also “coaches” veterinarians on how to “make insurance a more productive factor in your practice.”Personally, I believe the problem with the study is it really only looks at how pet insurance benefits veterinarians (which is their role so it is hard to fault them for that) and not really how pet owners can benefit. The study is also troubling when it makes the following statements of fact:
- “The effect of insurance is to reduce the perceived price of care.”
- “Pet health insurance is not true medical insurance. It is fee-for-service indemnity insurance…the insurers generally pay only a portion of the costs incurred by the policyholder as specified by the policy.”
- “those premium levels and the insurance company’s risk management approach – not veterinary fees – ultimately determine the amount the companies pay out for various types of claims.”
I have not put these quotes in context but look at the quotes and tell me if they make you feel good as a prospective pet insurance policy holder or a veterinarian recommending pet insurance to a client – can you see the conflict there for your veterinarian? Does you family physician recommend insurance coverage? Still other articles in professional magazines tell veterinarians to use the car insurance model as a good comparison and dismiss the comparison with human health care as an apples to oranges comparison that CANNOT be made. Well the same can be said about car insurance and pet insurance even if there are some similarities. Maybe car insurance is better compared to life insurance – glad we have it but hopefully won’t use it this year – but that is not a comparison I want to make with pet insurance. I buy it because I expect to use it. On the whole the pet insurance industry, through surrogates (other veterinarians), is telling veterinarians that there is absolutely NOTHING to fear from pet insurance and that it will benefit veterinarians significantly – just look at dentists they say. Well one always has to worry when there is absolutely NOTHING to fear – its like saying “never.”
So we can all see that the pet insurance industry has already started to shape the debate – “it’s great for consumers it will protect against catastrophe (as long as you can pay your veterinarian all of the up front costs) and its great for veterinarians financially and they have nothing to fear.” But there are those that disagree. Consumer Report reviewed pet insurance in July 2003 (Is pet insurance worth the price?) and were not kind to the pet insurance industry. The NCVEI report dismissed this report because “the focus of Consumers Reports appears to be keeping pet costs as low as possible.” Well that is to be expected as that is the raison d’etre for Consumer Reports as NCVEI’s is to “Ensure the Economic Future of Veterinary Medicine.” You can access part of this report at http://www.consumerreports.org/pets/0307vet2.html and look at a simple table they used to evaluate the various policies. We have designed a similar table that will roughly allow you to compare the cost of various pet insurance policies with the costs at your veterinarian based on your pet’s age and routine procedures that healthy pets should have performed annually. So now you know where your veterinarian is getting her information and who is giving it to them. So now lets look at the internet.
Pet Insurance and Cyberspace
As one might expect the internet is awash with data about pet insurance but I am not certain how much of it is truly unbiased “information.” When I googled “pet insurance” I got back 32,400,000 hits all of the top ones “paid sponsors” or advertisers and numerous duplicates of sites ostensibly to “review” pet insurance. While some sites do provide lots of very useful information about pet insurance and listings of costs, coverage, deductibles and co-pays there is no real hard analysis or comparisons of the policies on the most “polished” sites which leads one to believe that the sites are run BY the pet insurance companies. Instead of actually “reviewing” the pet insurance plans many sites just provide links to various pet insurance sites (which probably pay to be there) and then you can look at what that company has to offer and get a quote – hardly a critical “review” of pet insurance. The first two sites listed on google were http://www.petinsurancereview.com/ which, to its credit, does provide both positive and negative client reviews, and http://www.petinsurancereviews.org/ which provides useful information on pet insurance basics but no customer reviews. The site does however do a really “good” job of selling pet insurance – clearly a site provide by the pet insurance industry. A site that I like is http://www.organic-pet-digest.com/index.html. It genuinely looks at pet insurance plans, names it favorites and gives a reasonable breakdown of the packages – but like always one’s actual experience may differ from a simple point by point analysis. This site also gives a wonderful analysis of its two favorite packages “Pets Best” and “Quickcare” and is a good model for how anyone seeking pet insurance should compare companies and plans. Pet insurance, like human health insurance or the fine print on credit card agreements, is difficult to review, compare and analyze. Consumers can obviously compare prices (this is relatively easy but still confusing given co-pay options, exclusions, deductibles, policy caps and other fine print items), try to compare coverage (much more difficult given the same issues as above plus the nuances of each policy and company) and how easy it is to file a claim to get reimbursed. To see if pet insurance “might” work for you visit my web site at www.wvah.net, click on pet insurance and use our “calculator” to compare the value offer by any individual insurance policy against the costs that you might normally incur for a healthy pet at any given age on an annual basis. Your veterinarian may recommend more or fewer procedures based on your pets needs and where you live in the country.
If you find this article helpful please lets us know and please feel free to tell us about your experiences with pet insurance. We will post ALL responses to help both consumers and veterinarians make informed decisions about pet insurance. Please be specific about what happened. For example tell us what problem your pet had, what company and type of pet insurance (just accident coverage or wellness and accident coverage) you had, how much was your deductible and co-pay, how much your vet bill was and how much, if any, was covered. Also tell us if you were denied coverage. Then you can editorialize and tell us if you happy or not with your coverage. My intention is to put together a comprehensive analysis of what is and isn’t covered, how mush is and isn’t covered, and which companies are doing the best job of “insuring” our pets. The ultimate goal is to help individual pet owners determine if pet insurance is right for them and provides the kind of “value” or “peace-of-mind” they are looking for when seeking pet insurance.