Kent A. Kruse
Dr. Kent A. Kruse is the president of Kruse Veterinary Consulting. He is a former practicing veterinarian and a pioneer in developing computerized veterinary office management systems. He later joined the executive staff at Veterinary Pet Insurance as the chief operating officer and then PurinaCare Pet Health Insurance as vice president of professional relations. He continues to educate veterinarians about the importance of pet health insurance.Read Articles Written by Kent A. Kruse
Management consultants generally agree that establishing and monitoring meaningful metrics is a vital tool for business success. One of the more valuable metrics for veterinarians is the practice insurance quotient, or practice IQ, which represents the percentage of insured pets in the hospital’s active-patient database.
Why Practice IQ Is Important
Companion animal medicine is unique as a medical science because all elements of the industry and profession depend on the discretionary cash of pet owners to pay for the veterinary services, pharmaceuticals, hospitalizations and physical therapies necessary to keep pets healthy. Compared to human medicine, where over 90 percent of patients are insured, and dental medicine, where, depending on patient age, the percentage ranges from 40 to 90, the rate of insured pets hovers around 1 to 2 percent.
As the cost of providing quality medical care to pets has increased, their owners’ personal incomes have remained relatively stagnant or diminished. As a result, the gap between the cost to provide medical care for pets and the ability of owners to pay those costs is creating noticeable economic limitations for the profession.
In the past decade, veterinarians and consultants have begun to understand that the most productive method to counteract the limitations of client discretionary cash is to increase the number of insured pets. This is best accomplished by veterinarians proactively recommending to pet owners that they insure the health of their pets. Insured pets provide peace of mind to the owner, who knows that insurance will help pay for necessary or catastrophic medical expenses. Veterinarians benefit, too, from increased compliance and revenue as well as reduced requests for economic euthanasia.
In short, the practice IQ is increasingly being recognized as a valuable metric that is a strong indicator of the health of a practice.
What You Can Do
To create the IQ metric, first establish a unique one-character field in the patient database that is labeled “Insured (Y) or (N).” For practices utilizing a computer to check in patients, the “insured” field should be included on the check-in screen. A variation of the single-character screen might include a second screen for listing the insurance carrier name.
The next step is to establish a search for the total number of “Y” entries and compare that number with the total number of active patients. You then can easily calculate the percentage of insured pets in the active-patient database.
The IQ metric should be calculated monthly and, if practice staff are proactive in recommending pet health insurance to clients, the IQ should show a steady increase. If the metric is either stagnant or slow to increase, the techniques used by the practice team to encourage enrollments need to be reviewed or altered.
Updating the patient database requires dedicated participation by the reception staff and the support of all veterinarians and staff members. The method utilized should mimic the technique of every human medical office.
The first question in a veterinary practice assumes the pet is insured, so the insurance carrier’s name is requested. The second question verifies the owner’s address, phone number and email address. A “no” response to pet health insurance provides an excellent opportunity to discuss its importance and the peace of mind it would give the owner.
The best individuals to help clients understand the importance of pet health insurance are hospital team members whose pets are covered. Practices that are effective in growing their IQ metric provide insurance as an employee benefit. Insuring staff pets creates a cultural buy-in that supports efforts to grow the IQ metric.
When the entire staff has personal experience with the value of pet health insurance, the meaning and value of the IQ metric to both the practice and pet owner become a value to be shared with clients. The concept of effective frequency, or the number of times a person must be exposed to a message before a response occurs and before the exposure is considered wasteful, will help hospital staff understand the importance of their participation.
Here are five ways to utilize effective frequency:
1. Puppy or kitten orientation is the best time to introduce the value of pet health insurance. While the first encounter with a young patient and eager owners is filled with instructions and other information, insurance is important to emphasize. Puppyhood and kittenhood are periods in which the pet is most fragile and susceptible to injury or health problems associated with the young animal’s inquisitive nature. Remember that insurers do not cover pre-existing conditions, so having protective insurance in place before the first medical event is important. A hospital-prepared brochure and an insurance carrier brochure are valuable references to send home with the pet owner.
2. The receptionist is the first person to greet the client and inquire whether a new patient is insured. The doctor or veterinary nurse providing follow-up visits with the new puppy or kitten can ask the same question. These are good opportunities to stress the importance of insurance protection.
3. At the conclusion of medically related visits by mature patients, the veterinarian should ask if the owner needs assistance with an insurance claim form. If the pet is not insured, now is the time to remind the client that the medical services provided during that visit likely would have been covered.
4. Place an obvious, direct link explaining the importance of pet health insurance on the practice website’s home page. The information provided can be the same as in the client handout prepared for puppy and kitten orientations. If the practice recommends one or two insurers, provide links to the company websites.
5. Hospital newsletters or blogs are good places to share stories about clients who benefited from pet health insurance.
Do Your Research
Most veterinarians form their insurance provider preferences based on personal experience and favorable reports from clients. Certainly, insurance company representatives play a part in developing confidence in a provider or policy. What’s important is to step back from your previous opinions about a company and take a fresh look.
Almost all policies today share the medical cost risk with the pet owner through deductibles, co-insurance and annual limits. The higher the deductible and co-pay selected, the lower the monthly premiums. Companies have similar coverage restrictions, and none cover pre-existing conditions. The goal is to choose the insurer and policy that provide the best value — the most coverage for the lowest premium — to pet owners in your area.
Follow these four steps:
1. Using company websites, check the premiums for a 3-year-old dog and a 3-year-old domestic shorthair cat in your practice’s ZIP code. Select the very best coverage offered (unlimited annual benefits), a deductible of $200 to $250 and co-insurance of 10 percent. Select six to eight companies and chart your results. Avoid pricing policies that include wellness benefits because mixing accident or illness premiums with wellness coverage tends to confuse the true purpose of insurance. Remember, insurance is not an investment. Paying a pet insurance premium is purchasing peace of mind, just like with automobile collision insurance.
2. Evaluate the claims submission requirements. Most pet insurers process claims quickly, and pet owners receive checks within 10 days. While many clients can manage the requirement of paying in full at checkout, some will have difficulty. The newest technology allows claims to be submitted at checkout and the resulting benefit amount deposited directly into the hospital’s bank account. This technology reduces the amount that must collected from the client. Also available from some companies is claims submissions from the client’s cell phone.
3. Confirm whether an insurance company will preapprove a claim based on an estimate of charges for recommended medical services. Pet owners who receive preapproval make faster decisions.
4. Lastly, while pet insurance policies can be very similar, a few differences should be explored. Policy waiting periods, coverage for dental accidents versus dental illness, and understanding the difference between annual or “per incident” deductibles are important. Most policies include benefits for physical therapy, but others might require an additional premium. Also, some companies don’t cover veterinary exam fees. This exclusion could substantially increase the true amount of the initial deductible that the policyholder is required to pay for each accident or illness.
The Practice IQ Payoff
Studies have well-documented the basic benefits of pet health insurance. Owners whose discretionary cash is supplemented by insurance benefits are more proactive in making sure their pets receive the best medical care and without delay. They worry much less about the affordability of pet care.
Veterinarians who track and work to grow their IQ metric report a significant variety of practice benefits. Practice manager George Bailey of Stratham-Newfields Veterinary Hospital in New Hampshire reported that nearly 40 percent of the clinic’s active patients are insured.
“With compliance up and economic euthanasia requests down, issues associated with ethics exhaustion in our practice are reduced markedly,” he said. “More importantly, we can provide better care and longer lifespans for pets, which creates a cultural buy-in for the entire staff.”
Bailey added: “We pay for insurance for our employees’ pets, which provides credibility when team members are discussing pet insurance with clients. It does require staff time to discuss insurance with clients. However, the time saved by not having to sell needed treatments compensates for the time spent educating clients about the importance of insurance. In short, medical insurance for dogs and cats is a major bolster to the strength of our practice.”
He is a proponent of companies that supply the technical capability to provide preapprovals and submit claims at checkout time.
“With only a short delay in the invoicing time,” Bailey said, “we can submit a claim electronically and get a response from the insurance company within minutes. The company advises our receptionist of the client’s share of the total pet medical invoice. That amount is usually very affordable, and the insurance company simply transfers the benefit payment directly into our hospital bank account. This process also reduces credit card fees and finance charges from third-party credit agencies.”
The practice IQ metric, properly administered, has outstanding potential to maximize practice revenue, ensure quality treatment standards and reduce ethics exhaustion. Pet health insurance is the ultimate protector of the human-animal bond and provides peace of mind for pet owners, veterinarians and team members.