Petshealth Insurance Offers Solution To Rising Veterinary Bills
When faced with veterinary bills in excess of $576.00, American dog and cat owners begin to give serious thought to euthanasia, according to a recent survey by veterinary trade journal, DVM Magazine. This was not an option for Michael and Maureen Dunlap of Canton, OH, when their three-year-old Persian, Monti, faced a series of life-threatening surgeries. "We got a second opinion in Iowa and third opinion in Florida," Maureen explained. "Putting Monti to sleep was never an option. We were prepared to do what ever it took to get Monti well."
Doing whatever it took for Monti meant a series of corrective surgeries and a program of high-dosage antibiotics, effective for no more than a few weeks. Finally, Maureen and Monti drove 20 hours from Ohio to the University of Florida Veterinary College Clinic where Monti was a candidate for an experimental reversal surgery that ultimately saved his life. The Dunlaps estimate they spent over $5,000 in veterinary bills.
"It was only with the prospect of losing Monti that we truly realized the impact pet health insurance could have," explained Dr. Michael Dunlap, founder of Petshealth Insurance, Inc.
Two years earlier, Petshealth co-founder Russell Smith and his wife Donna nearly lost their 16-week-old Yorkie-Chihuaha puppy after she swallowed a rock that lodged in her intestine. "The surgery was expensive and because Punkin was so tiny, there were no guarantees she'd survive. "I've teased Russell that we'll have to have that rock made into a necklace," Donna said. "After all, it is a $500 stone,'' she added, referring to the veterinary expenses.
The Smiths were encouraged that surgery was even an option and that veterinary science had come so far. However, these technological advances had not come without great cost.
Money still remains an important issue to pet owners and veterinarians must be able to cover their overhead. The American Veterinary Medical Association reports veterinary costs are climbing by at least 30 percent per year. This is exactly how the concept of Petshealth developed when the Dunlaps and Smiths met for dinner shortly after Monti's operation and held an impromptu brainstorming session. Dunlap, former chief development officer at Diebold Inc. and the first professor for the University of Northern Iowa's Entrepreneurial Management Center is now Petshealth's President and CEO. Smith, with a background in consumer banking, is Executive Vice President. He is also licensed as a property and casualty insurance broker.
"Coming from a background in property and casualty insurance, I knew agents and brokers had always wondered why no carrier offered a pet health insurance program," said Donna. "And given the amount of money it had cost us to care for our pets it was really beginning to make sense to me. Especially by the time we had gotten serious about Petshealth and discovered that there was only one other nationwide insurance provider in the U.S. for over 160 million pets."
But, pet health insurance is not a new idea. In Europe, pet owners have been buying policies on their pets for over 20 years. Over 19% of pet owners in the United Kingdom carry insurance on their pets. In Sweden, over 48% of pets are covered. In the United States however, less than one percent of pet owners purchase health insurance for their pets. A 1997 study by trade publication, Veterinary Economics reports the average pet owner pays $173.20 in veterinary costs annually. "People simply aren't aware that policies are available for their pets," Smith explained. "One of our biggest challenges is educating the public."
"We based our plan on policies sold in the UK," Dunlap added. "We've designed our policies to be like major medical plans for people. We wanted our plans to be easy to understand, administer and pay." Petshealth policies pay 80 percent of covered veterinary costs above a $100 annual deductible. Pet owner's pay a monthly premium based on their choice of three different levels of insurance coverage. From basic coverage to expanded well-care, the Petshealth plans include major medical, spaying and neutering, surgery, accident and emergency treatment. Petshealth policies are underwritten by American Home Assurance Company, a member of American International Group (AIG), one of the largest insurance underwriters in the U.S.
"Pet owners are happy with us because we don't insist they switch their veterinarian. Veterinarians are happy with us because we promote a wellness program and we don't negotiate their fees. We don't operate like an HMO or corporate conglomerate of animal hospitals," Dunlap added.
"Money should never become an issue when a pet's life is at risk and saving that life is a possibility,'' Dunlap said. "That's why Petshealth is here."