Economic sustainability for veterinary services: the role of pet insurance

Once again, I’m taking this opportunity to provide a little more detail about the specific projects we’re undertaking to address the AVA’s five strategic priority issues. Last month I wrote about the role of a stock and flow model in effective workforce planning, and this month we move on to how we are working to ensure economic sustainability in veterinary  practice.

While the profession encompasses far more than practices, veterinary practices do need to be economically sustainable, and veterinarians need to be appropriately rewarded for their investment in education and hard work. The welfare of animals, the prevention of disease and the protection of our food sources are closely linked to a sustainable profession.

A few months ago my hairdresser was telling me a story of how her dog suffered an ailment which her veterinarian said  would require a long and complex treatment. I was pleased to hear that the dog made a full recovery, but braced myself for the usual litany about how unbelievably expensive the veterinarian was.

To my surprise, she said ‘the vet was amazing, and it only cost me $150. I had pet insurance.”

Unfortunately this is the exception, and the norm is a conversation in which a new acquaintance marvels at the fees “you vets” charge and the great personal wealth they believe you have as a result. You’ll be accused of being ‘too expensive’ even though you are meeting the demand to provide increasingly sophisticated treatment using expensive, technologicallyadvanced equipment.

When it comes to companion animals, it’s clear that there’s a general misunderstanding about the costs associated with owning and responsibly caring for our furry and feathered friends.

Let’s talk pet insurance

The AVA does recommend that pet owners invest in pet insurance, but we don’t recommend any particular provider. Our  policy on pet insurance is that:

Pet insurance can contribute to optimal health and welfare outcomes for all Australian pets, and pet insurance should be  available to all Australian pets regardless of age or condition.

Pet insurance continues to be a hot topic for members. If you would like to read about your colleague’s experiences or share your own, please visit the AVA’s pet insurance discussion forum which has seen increasingly lively contributions since it  started in 2010: www.ava.com.au/forum/experiences-pet-insurance-0.

According to research conducted by Galaxy Research this year, recently published by the Animal Health Alliance, 12% of cat
owners and 18% of dog owners have pet insurance. For those who don’t have pet insurance, the reasons are almost  identical between dog and cat owners. Almost half don’t see the value or need it; more than a third consider it to be too expensive, while a quarter just haven’t looked into it.

In the UK, pet insurance has been readily embraced by pet owners. Even during the 2008 recession in the UK, research by the Pet Food Manufacturers Association showed that while pet owners reduced their overall expenditure, they prioritised the needs of their pets.

Unfortunately, pet insurance is slow to be embraced in Australia. There is no doubt that Australians love their animals – we  have more pets than people!

So, we’ve decided to look at the broader issues with the uptake of pet insurance by starting a steering committee to work  with veterinarians and the insurance underwriters.

The AVA’s pet insurance steering committee

Our pet insurance steering committee held its inaugural meeting last month. The committee members are: Rena Richmond  (Chair) and Debbie Neutze from AVA National Office, and AVA members Dr Chris Blair, Dr David Marshall, Dr Garry Edgar, Dr James Thompson and Dr Tara Cashman. They are all very passionate when it comes to the topic of pet insurance.

From this first meeting, three key actions were identified. The group are now working to develop:

  • guides for veterinarians to make the claims process easier
  • promotional tools for pet owners encouraging them to invest in pet insurance
  • a pet insurance code of conduct.

The steering committee is also working with the two insurance companies that underwrite the market in Australia, Hollard  and Allianz, in order to:

  • share information
  • provide clearer definitions on pre-existing conditions and what can and can’t be claimed
  • streamline the claims process.

Watch this space, as we work to provide practices with more tools to help clients decide how to insure against the cost of health care so that more treatment decisions can be based on medical needs, rather than financial circumstance. Hopefully it will also lead to fewer of those hilarious/depressing stories about how your new acquaintance at a BBQ helped buy their veterinarian a Porsche by paying $100 for a consult.

Graham Catt
AVA CEO

This article appeared in the October 2013 issue of the Australian Veterinary Journal

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