Ups and Downs of DIY Veterinary Wellness Plans

The pros and cons of creating and offering wellness plans in your veterinary practice.

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Originally published in the December 2015 issue of Veterinary Practice News. Did you enjoy this article? Then subscribe today! 

Wellness plans may be a good way to expand your practice or offer clients more products and services, but before plunging in a bit of forethought may be the best prescription for your veterinary practice.

“Wellness plans can help expand a practice’s growth in areas using a very strategic approach,” said Carol McConnell, DVM, MBA, vice president of underwriting and chief veterinary medical officer for Nationwide pet insurance.

Dr. McConnell’s recommended approach is as follows:

  • If your practice wants to perform more dental cleanings, then develop wellness plans that cover only pre-anesthetic blood testing, dental radiographs, teeth cleaning and possibly extractions.
  • Want to make geriatric care more affordable? Create senior plans and promote them to owners with pets over a specified age.
  • If your practice would benefit by bringing old clients back into the fold, then use wellness plans for catch-up visits and promote and contact pet owners who have not been to the practice in the last one to two years.

“Recently acquired or new practices can strategically use wellness plans to differentiate themselves in the marketplace in their community,” McConnell said. “Market research is strong. Clients want affordable ways to pay for veterinary services month to month.”

Wellness plans also can help “smooth the seasonal revenue peaks and valleys” and increase annual client expenditures, she added.

But if practice managers do choose to offer their own wellness plans, make sure there’s a “perception of value” for the client, said Matt Aster, marketing director at Embrace Pet Insurance.

“This can be accomplished by ensuring that the veterinarian considers what should be included, how much it should cost — less than if they didn’t purchase the plan — and how will they’ll track and handle the plan itself,” Aster said. “Secondary to that is understanding your audience. Will they care about the wellness plan? Have a testing strategy to roll out and deployment.”

Pros and Cons

The popularity and upside of wellness plans has prompted some clinics to offer their own. But going all-in and going it alone may not be the best approach, said Kristen Lynch, executive director of the North American Pet Health Insurance Association.

“The administration of these types of programs is an enormous amount of work,” Lynch said. “When vets administer their own programs, its takes them off the primary focus of their practice: delivering care. Pet health insurance companies can help the practice learn about and offer this coverage while remaining focused on the care aspect of dealing with pets and their owners.” 

She advised clinics to consider offering several types of wellness plans — perhaps a freestanding, preventive-only plan, plus one that is administered by a pet insurance company.

“That way veterinarians can connect their clients with the fullest range of reliable and affordable options, while remaining focused on their core purpose,” Lynch said.

Considerable resources need to be freed up if a clinic intends to offer its own wellness plan, Aster said.

“Ultimately the decision to start a wellness plan is not a small decision,” Aster said. “The hospitals we’ve seen implement their own typically have to hire additional staff to handle the workload.”

Billing, administering and collecting payments for what essentially can be considered a flexible spending account can be difficult, and many businesses aren’t prepared to handle the challenges, he added.

Take a clinic that offers a 12-month plan: What is the procedure when someone cancels her plan midyear or if a covered pet dies before the renewal period?

“Will you attempt to collect the difference in claims versus wellness plan payments?” Aster asked. “A solid recommendation is to start small to understand your clients and offer one $200 wellness plan that pays back $250.”

He advised making the payment an upfront, one-time cost, and then sit back and see what the take-up rate looks like.

“Ideally you’d note these in your system and analyze if you see the intended business impact from that section of your clientele,” Aster said.

Some of the same advantages and disadvantages were echoed by Jeannine Taaffe, senior vice president of sales and marketing at Banfield Pet Hospital.

“Wellness plans are a great way to drive business and create loyalty with your clients,” Taaffe said. “However, offering wellness plans does take more time and investment than simply making plans available. It takes a commitment to educate and work with your clients on understanding the importance and value of preventive care.”

Where, When, How to Implement Wellness Plans

Some clinics may have an easier time persuading clients to sign onto wellness plans if they are located in areas where incomes are more limited and have clients who need to feel they are getting the most out of their money.

“It is important to think about a pet owner’s perception of wellness plans at every step in the customer experience,” McConnell added. 

That means a clinic’s website should promote its wellness plans. And when someone calls the clinic for pricing or to make a first appointment, the receptionist should promote the wellness plans and direct the caller to plan information on the website. 

When a client arrives and checks in, McConnell suggested, have the receptionist mention the plan that’s best for them and their pet. Mention wellness plans once again in the exam room, she said.

“Be specific and tell them which plan your practice thinks is best for their pet,” McConnell added. “Clients get confused if you provide too many choices.”

Taaffe sees communication as key in generating enrollment. Start by talking to both clients and the hospital team, she said.

“Each group is critical to the success of the program,” Taaffe said. “It is incredibly important that the hospital team understands client needs and wants and that offering a wellness plan not only meets the needs of a client, but it can also add value to the partnership between a client and a veterinarian.”

  Failure to have a clear-cut way to roll out a wellness plan is one of the biggest hurdles clinics may face, McConnell said.

“The biggest pitfall is not developing a comprehensive implementation program for these plans,” she said, adding that practice managers should make these programs “part of the fabric of what you and your staff do every day.”

The prevailing mindset, Lynch said, should be that a wellness plan functions like an investment plan for preventive care.

“A pet owner is paying a monthly premium towards preventive care,” Lynch said.

If a pet owner isn’t committed to proactive care, scheduling appointments and staying on top of her pet’s health, then she won’t get the full value of the investment in care, Lynch added.

Wellness Plan Trends

The prevailing theme — ensuring that clients feel like they are getting full value — may be a driver behind the latest trend in the space, which Aster said is the comprehensive inclusion of services and products.

“Clients want everything as simple as possible and they want to see value,” Aster said, noting that dental is one of those services that many clinics have shown interest in. “In terms of the current space, dental is huge right now. It’s a main source of routine care revenue for hospitals and it’s typically an expensive service, particularly if extractions are needed.

“I don’t see the need for dental wellness changing in the future. I think over the next year or two we’re going to see a lot of hospitals try wellness plans, but ultimately in three years a lot of those same hospitals won’t be running them due to complicated processes or low client take rate.”

Taaffe sees wellness plans following other trends.

“We are seeing a movement toward more personalization in services and products based on pet needs,” Taaffe said. “Personalization makes absolute sense — it’s what pet owners are asking for, and it will help ensure that hospital teams are able to better take care of an individual pet.”

Here’s the bottom line: Whether a clinic is considering going it alone or seeking the help of a pet wellness provider, take time to determine a strategy.

“Do your homework,” McConnell said. “Fortunately, there is a lot of information out there on how to develop wellness plans, how to market them to clients, and most importantly, staff training and engagement.”

Besides talking to insurers about available options, she recommends looking to groups like the American Veterinary Medical Association, the American Animal Hospital Association or Partners for Healthy Pets.

Then once you have a plan or plans in place, drive home the most important message behind offering wellness plans to clients and staff, McConnell said.

“There is ample independent evidence that wellness plans provide better care for pets,” she said. “Clients who buy them visit their veterinarian more frequently and utilize more veterinary services.”

Typical Wellness Plan

Like most pet insurance offerings, wellness plans come in all variety of shapes and costs.

While pet insurance covers particular incidents or ailments, pet wellness plans are like a frequent buyer program. Typically, a monthly fee is charged for a basic set of services and preventive care. The more care and services on the plan, the higher the fee.

An illustrative example is Nationwide’s Puppy Wellness plan. One of the company’s most popular offerings, the plan covers services that puppies usually need. Clients are charged an enrollment fee of $40 and then $49 a month.

The plan covers four comprehensive examinations, two intestinal parasite screens and two deworming treatments. Also included are puppy vaccinations, as recommended by the veterinarian, four nail trims, microchipping and the first year’s registration, as well as a spay or neuter.

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