Most veterinarians polled object to a partnership between the American Veterinary Medical Association Group Health and Life Insurance Trust (AVMA GHLIT) and Pets Best Insurance, even though a majority of practitioners support pet insurance programs.
That’s the gist of a Veterinary Information Network (VIN) survey, filled out by roughly 1,700 veterinarians, 90 percent of who belong to the AVMA membership body. According to the results, while more than half of the respondents believe pet insurance plays a positive role in the profession and 60 percent promote it, 70 percent are “very uncomfortable” or “uncomfortable” with the AVMA GHLIT-Pets Best partnership decision.
Why? In basic terms, some practitioners feel that the AVMA GHLIT, the indemnity arm of AVMA, is using their good name to promote and legitimize a private insurance company. What’s more, critics say a nonprofit like GHLIT has no business exclusively promoting a private carrier, especially as allegations of nepotism and unfair business practices tarnish the deal’s reputation.
“The whole thing stinks,” says Dr. Carl Darby, from Seneca Falls, N.Y. “I think this partnership was a foolish move, and when you add in the personal relationships, it just looks really rotten, even if it isn’t.”
The controversy surfaced last July, when the GHLIT made public a partnership with Pets Best Insurance, one of an estimated 15 pet insurance companies serving the U.S. market. The deal was designed to promote pet insurance inside and outside the profession, as well as draw up general operating standards for companies in an effort to stave off insurance problems that have plagued human health care. The GHLIT standards for pet insurance favor companies that operate with a system that reimburses clients instead of negotiating for reduced fees, as seen in health plans for human medicine, according to the Trust’s white paper “Pet Insurance: Managing the Process to Promote Quality Medicine."
Yet what's resulted is an exclusive, promotional arrangement between AVMA GHLIT and Pets Best, both underwritten by Aetna. Since then, leaders in both camps have taken heat from veterinarians and insurance competitors who criticize the deal, characterizing it as an inappropriate use of a membership body’s name — AVMA — to promote a private agency. The partnership stipulates that the Trust will reap a portion of Pets Best profits to pay for promotional expenses, and GHLIT CEO Libby Wallace’s familial tie to former AVMA Executive Vice President Dr. Bruce Little, who sits on Pets Best’s board of directors, appears to further degrade the arrangement’s standing among veterinarians.
AVMA leaders, at press time, stated that they did not have time to fully review the VIN survey results, which included more than 90 pages of comments released to them last Tuesday, and issued the following statement: “We are grateful that VIN has shared the results of their survey with us. Given the number of responses and comments that were published, we believe it warrants more than a quick comment, but we would like to take a couple of days to give the material a thoughtful, studied review.”
GHLIT officials, too, requested more time to review the material. Wallace, who is Little’s daughter, previously explained to the VIN News Service that she was hired in December 2007, after the Pets Best deal was already in the making. In a previous statement, GHLIT acknowledged that Wallace went through the interview process with other candidates, apparently rejecting any claims that nepotism factored in her earning the CEO seat.
“As former vice president of national accounts with Coventry Health Care, her many years of service in the health-insurance industry made her qualified for this position. Many members of the AVMA are aware of her family heritage,” the statement says.
Such explanations have done little to quell a growing backlash from association members, who have expressed their concerns on VIN. Some Message Board comments cite distaste for the way the partnership appears to outsiders — as if AVMA and veterinarians, by extension, are in bed with a private insurance carrier.
“I take my reputation very seriously,” practitioner Darby says. “I feel this compromises my integrity as a veterinarian and an AVMA member.”
AVMA and GHLIT officials stress that in reality, the two groups are autonomous, independent agencies, although AVMA’s Executive Board oversees some governance of Trust operations. So it might not be surprising that VIN survey results show that 44 percent of 1,580 respondents consider GHLIT an AVMA service or subsidiary, not the stand-alone body that leaders insist it is. Twenty-six percent of respondents believe AVMA runs the Trust, and when it comes to public perceptions, 93 percent of 1,578 veterinarians polled think that consumers will assume that AVMA controls GHLIT's actions and decisions.
“From my perspective, we’ve gotten as a veterinary organization into recommending a specific insurance company, and I think it’s wrong,” says Dr. Neil Tenzer, an AVMA member for 45 years. “I think it’s dangerous and unethical. It sounds like a very cozy, unhealthy relationship to me.”
AVMA and GHLIT officials, in previous interviews with the VIN News Service, have stated that the union is intended to help, not harm, the profession. Aside from being a legitimate partnership, the deal is designed to shine a light on how pet health insurance can work for veterinarians, supporters contend.
A report released in January by the National Commission on Veterinary Economic Issues (NCVEI) and Brakke Consulting boasts that pet insurance can bridge the gap between ever-increasing veterinary care costs and clients’ ability to pay for expensive treatments, without going down the cost-control path forged by managed health care. To date, no pet insurance provider follows that human health care model, largely because veterinarians have rebuffed companies’ attempts to enter the market, says Dr. Jack Stephens, Pets Best founder and one-time head of VPI, the nation's largest pet insurance carrier.
Pets Best, for example, administers an insurance plan that reimburses policy holders for 80 percent of their veterinary services after a deductible, with no benefit schedule or fee restrictions — much different from models in human medicine that sign doctors into provider networks of companies that then negotiate for lower service fees in exchange for funneling policy holders into the practice.
“The only time the veterinarian gets involved in real paperwork is when they have to attest to preexisting conditions by sending us their records,” Stephens says.
But is pet health insurance good for the profession? To answer that, the NCVEI/Brakke report points to a 2002 study in the Journal of the American Dental Association (JADA) that shows dental insurance drives more people into dental offices and they, in turn, are more receptive to higher-cost treatments. People with dental insurance spent 72 percent more on dental care annually than those without insurance, the study says.
“In veterinary medicine, insurance can be a valuable tool to foster a higher quality of pet care, with less price resistance on the part of the client. ...The parallels between dentistry and veterinary medicine are obvious,” the NCVEI/Brakke report says.
Yet another study published in JADA in January 2009 exposes the negative impact insurance has had on the dental profession, by creating direct relationships between insurance agencies and dentists. What’s evolved is a system where dentists receive insurance payments, and that has allowed carriers to dictate terms to participating dentists, forcing them to reduce their fees in order to benefit from seeing insured patients.
Now with an estimated 57 percent of the U.S. population insured and more than half of all private dental expenditures paid through insurance plans, dentists feel trapped in price agreements, afraid to opt out and lose a steady stream of patients, study co-author L. Jackson Brown, DDS, PhD says.
“(Insurance companies) can only do that when they have a certain amount of market power, as in networks,” he explains. “There has to be enough that the dentist worries that he’ll lose patients.”
It’s a problem that’s unlikely to emerge in veterinary medicine, where practitioners are leery of signing network agreements and rebuff the paperwork associated with direct-payment systems, Pet Best’s Stephens says.
“It will never happen if veterinarians simply don’t join networks that control fees or services,” he says. “We want true fee for service. It’s in our hands.”
Whether or not that proves true remains to be seen. Still, as far as growth is concerned, there’s nowhere to go but up for pet insurance companies, Stephens says. He estimates that just over 1 million pets of 163 million dogs and cats owned in the United States are covered by insurance. And as the human-animal bond strengthens and veterinary expenditures rise, he foresees the popularity of insurance increasing.
Brown says that for all their small-business similarities, he can't predict whether or not veterinarians will end up in the same predicament as his dentist colleagues.
“Veterinary medicine is the last stand,” he says. "It looks like that of all the health professions, it’s one of the last ones that treats individual patients and doesn’t have insurance running rampant."
VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email email@example.com.