Letter to Vetted: Pet insurance worries me

Letter to Vetted: Pet insurance worries me

This veterinarian learned to hate vision insurance when she worked as a human optometrist, and she’s afraid what more insurance control of veterinary medicine could mean.
Oct 31, 2018
By dvm360.com staff

Editor’s note: Are you worried about pet health insurance, or excited about its ability to help pet owners afford care? Do you think pet insurance will penetrate veterinary medicine the way it has in human medicine, or do you think they’re two different business models with very different realities? Email us your thoughts at [email protected].

I was an optometrist first and practiced for several years before going back to vet school. I still own two optometry practices and practice part-time, but mainly do veterinary medicine now, which is really where my heart is at. Because of my background I have a strong understanding of the similarities and differences in human vs. veterinary medicine, and, unfortunately, I see veterinary medicine taking a similar path to the one human vision/medical insurance went down 20 years ago.

Back then, vision insurance was in the same place as veterinary medicine, with many insurers allowing payment for 100 percent of the doctor's charges. Today, most charges are discounted by anywhere from 50 to 70 percent, and doctors aren’t allowed to bill the patient the remaining balance. For example, if I charge $100 for an eye exam, but I accept a certain vision insurance I only get paid $35 total and am not allowed to collect the remaining $65 from the patient.

This same vision insurance was started with seemingly good intentions—just like today’s veterinary insurance. However, the negative impact comes when a majority of clinics sign provider contracts. Then the insurance companies change the fee schedule and reimbursements. By that time, patients are already used to Dr. X taking their insurance and even if Dr. X stops being a provider, another doctor down the street is a provider and the patient will just switch practices.

To compensate for the reduced income, doctors raise their rates to offset the discounts by collecting more from patients with no insurance, and it becomes a vicious cycle. This same bait-and-switch cycle has happened with nearly every vision insurance company, and by the time optometrists knew what was happening, they could no longer drop the insurance or they would lose too many patients. They also couldn't discuss it with colleagues due to federal consumer trade laws, so the cycle continues.

I don't see a 50 to 70 percent discount as something feasible in veterinary medicine from any of the articles I've read about tight margins, struggling income-to-debt ratio of new grads, etc.

— Jessica Czerny, OD, DVM
Spearfish, South Dakota

Misconceptions about Pet Health Insurance

.Unfortunately, Dr. Czerny is not familiar with how pet health insurance functions. Since pet insurance became available in the early 80s, no veterinarian has been required to sign a contract with an insurance company. The only contract required is between the insurer and the pet owner.

Pet health insurance is a form of property insurance, like automobile collision insurance. Every pet owner understands that they are personally responsible for paying a deductible and the difference between the cash benefit and the total bill (co-insurance). Unlike human medical coverage, veterinarians ultimately receive full payment for their services.

Warnings that pet insurance is starting off like medical insurance but that, eventually, insurance companies will dictate fees and cause a reduction in veterinary revenues have been perpetuated for over 30 years. Unfortunately, this sad prediction has been partially responsible for our profession's inability to fully embrace this very valuable tool. While it is true that veterinary medicine has several revenue related problems (student debt is only one), it is also true that pet insurance provides the biggest potential for overcoming those problems.

Kent A. Kruse, DVM