GettyImages/Liliboas Pet health insurance has been a flop in the United States. In recent history, this industry has served less than 10 percent of our country’s pets.1,2 Compared to the UK, with up to 25 percent of pets insured, and Sweden, with 90 percent,3 the U.S. pet health insurance has been an abject failure. While we can point to a variety of missteps on the part of pet insurance companies and the innate reluctance of a public ill-inclined toward the insurance industry writ large, it is my contention veterinarians are mostly to blame. We, after all, exert the most power over pet owners when it comes to adopting pet healthcare products, especially when said products are inextricably linked to the delivery of care. How it happened I’m old enough to remember the start of the modern pet health insurance industry. While the first companies have been around since the ’70s, the ‘90s marked the industry’s early transition into the real world of veterinary medicine. That was when it gained its first foothold in small animal veterinary practices and discussions surrounding its future impact on veterinary medicine initially boomeranged across early online vet media spaces. The earliest vet-to-vet conversations were almost uniformly sour on the subject. The way most veterinarians saw it, the despicable bane of human medicine was coming for us next—and there was no way we were going to take it lying down. We fought it fang and claw. The last thing we wanted was for third-party payment plans to turn our practices into places with more billing specialists than techs. What were we thinking? While equine medicine dealt with insurance for decades—successfully and uneventfully—small animal veterinarians had never been exposed to the concept. The fee-for-service business model had built our success, and we viewed pet health insurance as a Trojan horse-shaped threat. First, they would come in all vet-friendly—with a reimbursement-only model—and bait-and-switch us over to a third-party payment system after they had solidified their market position. Before long, we would all be swimming in the muck of managed care; they would be dictating our fees and telling us how to practice. It was a not-unreasonable fear if you consider the wider context: At the time, a much larger percentage of veterinarians owned their practices. They were doing well. Why crash the apple cart? This was also the era of an emerging lawsuit panic and early practice consolidation. Our industry’s growth was scary. We were on the cusp of something more sinister, and pet health insurance was an easy target for our fears. Just another tool In retrospect, we were not wrong. The ’90s was arguably the decade in which it became clear we veterinarians were losing control of our profession. The irony, however, is pet health insurance should have been the least of our concerns. Big Pharma, Big Pet Food, Big Labs, etc., were the real wolves dressed as sheep. Pet health insurance is—as it has ever been—just another tool in our marketing arsenal. From the beginning, pet health insurance marketed itself as just that—a tool to help us grow our practices. These companies claimed if we would only recommend their financial products to our clients, we would have immediate access to a clientele more willing and able to spend on our services. As a profession, however, we actively blocked the industry’s efforts—at first, anyway. Though we eventually decided it was not the Death Star we had once predicted, we have never taken a pro-insurance position, either. Most of us still do not actively promote it. We continue to behave as if insurance has nothing to do with what we do or how we practice. Just imagine … If every single one of your clients carried a pet health insurance policy for their pets, what kind of a practice would you have? How much easier would your working life be if you had the luxury of putting finances on the back burner in every exam room discussion? Would you make more money and experience less stress? Yes. Would your practice have incrementally more paperwork? Sure. Would you have to eke out some time to discuss insurance with every new client? Definitely. (Though your team could do it for you.) Maybe you would even have some new issues to resolve whenever the insurance company denies a claim. Too true. But would you feel more satisfied in your role as a clinician who’s more capable of practicing the way you have always wanted to? For sure. Why wouldn’t you promote peace of mind? Over the past ten years, I have grown my practice from an average of five percent insurance-carrying clients to about 15 percent insurance penetration. Even with this modest uptick, I have seen a significant difference in my associates’ comfort with finances. What’s more, I rarely hear clients complain about their policies or express dissatisfaction with their decision to maintain one. So, why do most of us continue to practice as if pet health insurance is not available? We breathe a sigh of relief whenever we are made aware our sick patient is insured, but we do not carry that forward into an active plan of pet insurance promotion. Why not? “It’s not our job.” We are not insurance salespeople, but we promote crate training, seat belts, pool safety, and microchips. Why would we not promote a product that would make it easier to treat a pet when it is sick? “It’s tacky to talk about financial products that might seem self-serving.” Is it not tacky to have to cross out items on an estimate when people cannot afford them? “I don’t have time.” I get that, but do you not have a team? Plus, think about how much time you will save when that client is not nickel-and-diming you over a urinalysis or CBC. “Insurance is a scam.” Insurance buys peace of mind. That’s it. Just because you do not like spending your money on it, does not mean others do not cherish the same. So, is pet insurance a flop? I have been thinking about this subject ever since a pet insurance company dropped hundreds of thousands of pets from their policies. When my sister called to report her two older shepherds had been dropped, I felt almost personally aggrieved. After all my support for pet insurance over the decades, that company goes and dumps on my eternal optimism, proving pet insurance carriers are not to be trusted. It is clear the industry has not come too far in all these years. If companies will not stand behind their products and regulators do not care enough to make rules that protect pets … it has obviously failed. Yet … the very next week another company covered a $12,000 neurology bill for one of my Frenchie patients. The client even wrote me a card thanking me for recommending pet insurance way back when the dog was a pup. When was the last time you got a tangible thank you for recommending a product? Which leaves us where? To be sure, I’m feeling much more cynical on the subject of pet insurance. Still, I will not be changing any of my recommendations and practices regarding pet insurance anytime soon. No more, anyway, than I did when recommending commercial pet food after 2005’s major recall. At some point, we just have to accept there is a cost to doing business with every supplier in our industry. Pet insurance is no different. Moreover, I continue to believe that veterinarians are primarily responsible for the industry’s failure. If we were more involved in the industry’s machinations, taking more credit for its successes along with greater responsibility for its failures, more pets would receive the healthcare they deserve, and fewer companies would risk our scrutiny by dumping pets from their policies. Patty Khuly, VMD, MBA, owns a small animal practice in Miami, Fla. and is available at drpattykhuly.com. Columnists’ opinions do not necessarily reflect those of Veterinary Practice News. References North America Pet Health Insurance Association State of the Industry Report 2023. https://naphia.org/wp-content/uploads/2023/05/NAPHIA-SOI2023-Report-Highlights_Public-May9.pdf https://americanpetproducts.org/industry-trends-and-stats https://www.pawlicy.com/blog/dog-insurance-statistics/
