Consulting firm releases user guide that avows pet insurance merits

AVMA issues policy shift as criticisms of GHLIT-Pets Best partnership ensue

January 21, 2009 (published)
By Jennifer Fiala

A new pet health-insurance guide for veterinarians was released at this month’s North American Veterinary Conference, representing the latest push by organized veterinary medicine to get practitioners on board with third-party payment systems.

“A Veterinarian’s Guide to Pet Health Insurance,” put out by Brakke Veterinary Practice Management Group and commissioned by the National Commission on Veterinary Economic Issues (NCVEI), is an eight-page promise that pet health insurance can bridge the gap between ever-increasing veterinary care costs and clients’ ability to pay for expensive treatments. Anecdotally, less than 3 percent of owners carry such policies, but backed by DVMs, a “whopping 41 percent” of owners polled indicated that they would purchase pet insurance if recommended by their veterinarian, the report says.

Research shows that veterinarians aren’t promoting insurance the way they might other products and therapies, Brakke senior consultant John Volk says.

“I don’t think a lot of veterinarians have been convinced that they have a stake in it because they can’t sell it, it has to be sold by an insurance company,” he says. “But insurance does have a material impact on people’s receptiveness to seek and pay for care. We think this is an opportunity for veterinarians looking for ways to strengthen their practices.”

After all, dental patients with insurance spend 70 percent more than their uninsured counterparts, and the “parallels between dentistry and veterinary medicine are obvious,” the report contends.

Yet while NCEVI and Brakke boast of pet insurance’s benefits to the profession, critics remain wary of such deals, especially in light of human medicine’s battle with the cost-control system of managed care. To that, the report states: “Pet insurance is not true medical insurance. It is similar to your auto or homeowner policies. …Insurance companies have no financial leverage in the veterinary community.”

That might not be true for organized veterinary medicine, where groups such as the American Veterinary Medical Association’s (AVMA) indemnity arm, the Group Health and Life Insurance Trust (GHLIT) stand to gain if pet insurance spikes in popularity.

Last July, GHLIT unveiled a partnership with Pets Best Insurance during AVMA’s annual convention. Since then, leaders have taken heat from veterinarians and competitive insurance companies who criticize the deal, characterizing it as a wildly inappropriate use of a membership body to promote a private insurance agency. AVMA and GHLIT officials respond that their respective bodies operate autonomously and clarify that the deal involves the trust, Pets Best and their mutual underwriter, Aetna Inc. — not the AVMA membership group. GHLIT, according to the agreement, will receive a percentage of royalties from Pets Best policies, which leaders say will pay for additional staff needed to market the program.

But what really has critics clamoring is 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. To that, Wallace, Little’s daughter, explains that she was hired months after the GHLIT-Pets Best deal already was underway (see related timeline, attached). She issued the VIN News Service the following statement:

“Libby Wallace went through the interview process with several other interested candidates for the position of CEO. As the former vice president of national accounts with Coventry Health Care, her many years of service in the health-insurance industry made her a qualified candidate for this position.”

“Many members of the AVMA are aware of her family heritage,” the statement adds.

Still, questions remain concerning whether pet health insurance is good for the profession and whether alleged ethical issues stemming from GHLIT-Pets Best deal tarnish the reputation of AVMA, and by extension, veterinary medicine. To date, AVMA, GHLIT and Pets Best officials point to the transparency of the partnership, which they hope will raise the bar for pet insurance industry standards.

AVMA-approved standards for pet insurance were issued last July in a white paper, just as GHLIT announced the Pets Best arrangement. Yet in November, the Executive Board rescinded its support of the paper, based on advice from the group’s Council on Veterinary Service.

While AVMA still endorses a third-party payment system that “provides coverage to help defray the cost of veterinary medical care,” the white paper was more prescriptive and specific than an AVMA policy should be, according to an article in the Dec. 15 issue of the Journal of the American Veterinary Medical Association.

“Also, the council believed that the provision calling for veterinarians to educate clients about pet insurance implied it was the practitioners' responsibility to help owners decide how to pay for services,” the article states.

Is the move an attempt by AVMA to distance the association from the GHLIT-Pets Best arrangement? AVMA officials did not respond to VIN News Service requests by press time to answer that question. But in a VIN message board post directed at quelling members’ dissension, Executive Vice President Dr. Ron DeHaven, spells out the AVMA/GHLIT connection, stating that “while AVMA GHLIT is a separate entity from the AVMA, the AVMA Executive Board has some control and responsibility. The GHLIT charter is issued and amended by the AVMA and the AVMA Executive Board appoints the GHLIT trustees. However, the GHLIT trustees operate independently and are accountable to the members of GHLIT, not the AVMA.”

He continues by adding that while AVMA “is supportive of the GHLIT’s involvement with pet insurance … AVMA does not endorse any individual pet insurance company.” 


The VIN News Service recently conducted a Q&A session with the American Veterinary Medical Association and its indemnity arm, the Group Health and Life Insurance Trust (AVMA-GHLIT). It can be found here:

GHLIT/Pets Best Timeline

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