This week on the podcast…
Alison Lambert joins Dr. Andy Roark to discuss what can be learned about pet insurance in the United States from pet insurance in the UK and Australia. Both the UK and Australia have traditionally had much greater utilization of pet insurance by pet owners, and as a result, pet insurance in those countries looks quite a bit different than it does in the US. Now, as the market for pet insurance in the United States grows by leaps and bounds, what changes can we expect as more and more pet owners acquire insurance?
ABOUT OUR GUEST:
Alison Lambert is a proven business leader having created an award-winning business from scratch. Seeing a niche and creating innovative products and services that have created real change in a conservative business sector, Alison has led the Onswitch team to become the brand leader in their sector in a challenging economic climate and with a very conservative profession.
Alison has coached start-ups and mature businesses to business improvement and has a certain way of enabling change in even the most “traditional” of characters. At the beginning of her business career, Alison spent time coaching non-Vet sector businesses ranging from Anglian Water to Norwich Union now Aviva. Prior to starting her own business. Alison spent 10 years in FMCG with MARS and Colgate Palmolive. Alison is Honorary Associate Professor in Business at Nottingham Vet School and was awarded the Australian Veterinary Association inaugural “Business Thought Leadership” award in 2019 and the RCVS Impact Award in 2021
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Links from the Episode
OnSwitch: https://onswitch.co.uk/
CareCredit: https://www.carecredit.com/
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Episode Transcript
Dr. Andy Roark:
This episode is brought to you ad-free by our friends at CareCredit. Welcome everybody to the Uncharted Veterinary Podcast. I am your host, Dr. Andy Roark. Guys, I got a great one here today with the one and only Dr. Alison Lambert. Guys, if you don't know Alison, you are in for a treat. I love my conversations with her. She's a dear, dear friend of mine as you're going to hear us talk about. We go way back, we've had many adventures together. She's just fantastic. She is a veterinarian. She's a veterinarian in the United Kingdom. She runs a company and started a company called Onswitch, which is an award-winning customer experience company. So she helps practices with their customer service that they deliver to pet owners and potential clients. And she's amazing. You guys should check out Onswitch if you have not heard of it before.
Anyway, her experience with customer service has interfaced her a lot with pet insurance, and so she has a lot of experience with pet insurance in the United Kingdom. And we talk all about it. As you'll hear, she has feelings, she has opinions, and she's willing to share them. And I am here for it, and so I hope you guys will be too. One thing I want to make super clear in this episode, Alison is a veterinarian in the United Kingdom. She is not a veterinarian in the United States. She's never been a veterinarian in the United States. And so when she talks about pet insurance and we're talking about it, she's specifically talking about pet insurance in the UK, where market uptake is much higher than in the US. And this is why I want to talk to her, because my point in this episode is I want to understand what the future looks like.
What does it look like if we get 25% of pet owners onto pet insurance? What is that? How does that work? How is that different from where we are now? And I'm really digging into this to say pet insurance in the UK has always had much more traction than it has in the US. But we're moving in that direction and pet insurance usage in the US is climbing up. And so this is really me trying to peer into the crystal ball, talk to my friend who has seen a different reality of pet insurance than I have, and to start to draw some pictures about what pet insurance in the United States might look like in the future and what pitfalls there are and what wonderful benefits there could be. Guys, when we talk about pet insurance, we often think about health insurance, and the experience of physicians with health insurance in the United States has not been great.
And I want us to think about what that looks like. And I want us to make good intentional choices as a profession, as doctors, as healthcare providers, about how we interface with pet insurance. And so guys, this is my intention with this episode. I think you're really going to enjoy it. I love this episode. I got a lot out of it. It is going to make you think. I got to say real quick upfront, views expressed by our guests on the Uncharted Podcast are their own, and their appearance on the program doesn't imply any endorsement of them or any entity that they represent. I always got to say that, especially when we start talking about insurance, things like that. Gang, let's get into this episode.
Speaker 2:
And now, the Uncharted Podcast.
Dr. Andy Roark:
Welcome to the podcast. Alison Lambert, thanks for being here.
Dr. Alison Lambert:
It's delightful to be here on a freezing cold day in the UK.
Dr. Andy Roark:
Oh yeah. We are having our annual meeting early. Generally, you and I have a cup of tea in Orlando in January and we're going to just talk a little bit earlier this year. So this is brightening my day.
Dr. Alison Lambert:
Those cups of tea in Orlando are particularly dire, quite frankly, because I think the concept of tea requires a tea pot, tea leaves and some preparation and just some moments of reflective time. And that isn't Orlando and tea. So there we go. But it's good to see you. And it's freezing.
Dr. Andy Roark:
It's good to see you as well. For those people who don't know you, you are a business consultant based in the UK. Your company is called Onswitch. You do all sorts of things across the UK and Australia. You are sort of a multinational communication and consulting, marketing, strategy.
Dr. Alison Lambert:
I'm an individual conglomerate, if there is such a thing, if that's not an oxymoron. We'll debate that one later.
Dr. Andy Roark:
I met you years ago. There was a time that I was on Twitter and it was years ago. And I think you were the best thing that happened to me on Twitter. You and a couple other people were people that I met, I think, through Twitter.
Dr. Alison Lambert:
Wow. That's a long time ago.
Dr. Andy Roark:
And then we met in person at… I know. Twitter's a cesspool. But way back then. And then we met at VMX and our friendship has rolled on through the years to the point that pre-pandemic I came to your house.
Dr. Alison Lambert:
Yes. This very house here.
Dr. Andy Roark:
Your house is older than my country.
Dr. Alison Lambert:
Correct.
Dr. Andy Roark:
And I came there and visited with you and your husband Donald. And for people who haven't been to Alison's house, and there's some of you out there, it is-
Dr. Alison Lambert:
There are some left.
Dr. Andy Roark:
Exactly. It is what you imagine the traditional English house to be. It is older than our country, it is beautiful stone. And we stayed there and we went, we left and we walked through town past the stone walls and houses to the pub. And we walked in and the whole town was there.
Dr. Alison Lambert:
The town.
Dr. Andy Roark:
The town, the village.
Dr. Alison Lambert:
Yes, you had too many beers that night if I remember rightly.
Dr. Andy Roark:
That's possible. It's possible.
Dr. Alison Lambert:
It's possible.
Dr. Andy Roark:
It is exactly the pub experience that you're imagining. It was magical. It's a warm memory of mine, so thank you for that.
Dr. Alison Lambert:
But I also recall a time in Barcelona as well where it all went a little bit awry. Without going into… At the top of that building and dinner. But we won't go there.
Dr. Andy Roark:
Okay. Let me just say that you see me when I'm doing international travel. And that's not representative of how I am at the vet clinic. That's a different thing.
Dr. Alison Lambert:
Different person.
Dr. Andy Roark:
It is basically a different person. Okay. Here's what I want to talk to you… Changing the subject radically.
Dr. Alison Lambert:
Really quickly.
Dr. Andy Roark:
Here's what I want to talk to you about. Yeah, exactly. Before this goes any farther, what I want to talk to you about, I want to talk to you about pet insurance. And the reason I want to talk to you about that is you and I have had a rolling conversation about pet insurance for years. And the reason is because you work in the UK and Australia and the insurance culture, especially around pet insurance, is very, very different than it is here in the US. And so I think I'm going to go ahead and open up and provide some context to the discussion I want to get into by saying to you, can you tell me the story of pet insurance in the UK and what that's looked like over the last five to 10 years?
Dr. Alison Lambert:
Yeah, it's a really important geopolitical positioning for pet insurance. We do need to just go, look, here's a tiny little island, the UK. Then there's Europe, which has Scandinavia, which has a very strong insurance culture. And then Australia's over there. Keep going, go right, go right, drop down a bit. 24 hours later there's Australia. And we have different insurance approaches and different insurance penetration. So the country that has nailed pet insurance historically is actually Sweden. The Scandinavian Nordic bloc have a very high uptake of pet insurance because it came from a very collaborative relationship with the kennel clubs, where it was to do the right thing. We want to do the right thing by our pets, therefore we'll find a way of enabling interventional pet care to happen in a way that makes it affordable for everybody and sustainable as well. So you're looking at 70, 80% of pets insured in that bloc of Northern Europe.
That's massive, that's the biggest in the world by miles. Then you come to the UK and we did our own version. We didn't copy what was working in Northern Europe, we kind of did our own thing. And it started with Petplan as a group then, when nobody did pet insurance. So somebody started, Patsy Bloom started it because she needed something for her own dogs. So there was a historical heritage position, which you're familiar with I'm sure. And it became a very veterinary introduced, that the conversation was started at the vets and the vets saw it was a good thing for people. And that kind of evolved to where we now have at the last count probably, I don't know, 350 insurance policies out there. And you can get pet insurance from the supermarkets, the garage forecourts, through your own health insurance, your house insurance.
It's part of a multi-book play. So have your house insured, get your travel insurance, get your dog insured. It's part of everybody's insurance bucket. But there are still some pet insurance-only players, fewer of them, but they're still there. So now insurance is, pet insurance, it just is. So we're allegedly somewhere between, I don't know, 30, 35% of pets are insured in the UK. But we'll come to that, because who knows whether they are or they aren't? We know that 3.7 million people bought insurance last year. We know that; that's the number of policy holders. We know the number of policy holders, but we don't know how many dogs there are in Britain, we don't know how many cats there are in Britain, so we're guessing the pet percentage. But we know 3.7 million people do have a policy. That is an absolute, because that's the Association of British Insurers, that's public data. So we know that one.
Our history, if you look at Australia, Australia are 5% insurance maximally. So they're in a very similar position to you guys. It's not yet happened. And they're catching up quite quickly as a newer generation of in COVID pet ownership happened. The people who took pets out in COVID were younger, did their research and decided insurance was necessary. So we've had a spike of uptake. So that's happening in Australia, it's happened here, it may well have happened in the US as well. So insurance for us has become… It started as interested, motivated people in the kennel club in Northern Europe, and then the vets in the UK embraced it because they saw the good in it. So that's the heritage position, I suppose. That's where we came from.
But we're small, remember? One single veterinary organization, one single group of people in Northern Europe that were like, we are the vets of Sweden, we'll do it this way. We are the vets of Britain, we'll do it that way. So there wasn't the herding of cats with states and jurisdictions and boards. And so it's a smaller group of people to influence. They're influenceable because they go to one conference. There aren't multiple conferences. I think that's why we started differently, to be fair. But where we are now is crazy.
Dr. Andy Roark:
Okay. [inaudible 00:10:39] crazy. So hold on, I'm looking at global pet insurance rates, and we're looking at 16.7% increase projected global pet insurance rates for 2022 to 2030. And then I can say in the US we've seen the number of pet insurance policies double in the last four years. It was up 28% in 2021 over 2020. And so we're seeing really rapid growth. When you say things have gone crazy, is that what you mean?
Dr. Alison Lambert:
No, not particularly. We've had a 4% uptake on numbers of policies and gone back up. Our policy numbers were dropping pre-COVID. We weren't doing this, we were kind of going, oh, we got to that point, but it spiked back up because of COVID. So 16% uplift in the UK would be an astonishing number, and I would not anticipate that that is the case. So how many policies is that then? I mean, percentages, it could be a hundred percent of one, or a hundred percent on a million. How many written policies are there in the US?
Dr. Andy Roark:
I didn't write that down. I don't know. I did, I was so proud of myself for doing research ahead of the podcast and then you ask me a question, I'm like, [inaudible 00:11:55]. You can see the depth of my research was I was like, pet insurance policies are getting much more common. I'm learning, I'm learning.
Dr. Alison Lambert:
That's so shallow. No, but the reason why, it's, oh, the listeners, really, I mean, I ask you. But the thing about data, or data, depending on how you say it, is 3.7 million people have pet insurance in the UK; we're a population of 65 million. So the number is, if that goes up by 20%, that's a big old chunk. Is that likely? No. Is it likely to stabilize and go down? It's likely to go down. We've got cost of living issues. People are seeing premiums go up and up and up and up, versus the payout. And they're going, I might as well just put the money in the bank. And self-insurance is now a thing. So early stage growth is easy. We had 100 policies last year and now we've got 116 policies will be 16% growth. So the numbers matter. The numbers matter. As Andy frantically Googles whilst talking to me.
Dr. Andy Roark:
I am, I'm frantically Googling.
Dr. Alison Lambert:
I know, I can tell. I can tell. But the key to it, though, isn't… It's going to get more because you've got so few. You're going to be more, aren't you? The question is how you get more and what you do with more. And that's the bit that we've discussed over the years around the answer to the veterinary clients can't pay their bills is insurance is a falsehood, because just because they've got insurance doesn't make your life easier as a clinic owner. It enables a patient to get the care, but with it higher insurance caseload brings other things.
Dr. Andy Roark:
Okay. Okay. All right. So let me unpack this. So first of all, 3.9 million is the answer to how many policies are in the US, so 3.9 million in 2022. But you have a much smaller country so just a much higher percentage. So it penetrates a lot more. Okay, hold on. So I want to approach this in an organized way.
Dr. Alison Lambert:
I should write that down so I remember that later.
Dr. Andy Roark:
I'll record it and you can listen back to it. There's a thing I do, so I can let you hear it.
Dr. Alison Lambert:
You should do that for a living.
Dr. Andy Roark:
Okay, let's unpack this in organized way. So you guys have had much higher percentage of people, pet owners with pet insurance for a long time.
Dr. Alison Lambert:
Yes.
Dr. Andy Roark:
Let's lay this out and just sort of think about it. What is the good part of this? So Alison, help me see, I always like to start with a positive. What's the good part of having a higher percentage of pet owners insured for practice? What does that get me?
Dr. Alison Lambert:
When we look at this, if a pet is insured, and when we break it down and we don't have time and head space to do it quite now, but for new puppies, new kittens, start of life, there's a higher uptake of that insurance because I want to do the right thing. So we start off on the right foot, particularly if there's breed disposition. So I've got a Westie or I've got a dachshund, the likelihood is there's going to be a thing I need to look after at some stage. With insurance in place, it enables a relaxed approach to plannable care from things like we need to do some investigations or some bloods, he's not well. So we take away the stressor of can I afford it, should I afford it, can I talk about it? So the vet teams have different conversations. The owners also have different conversations.
But what it doesn't do is directly mean that you as a vet in practice can certainly say, well, I'll charge more for everything, or I will do more of everything than I used to do, because I do good medicine now. So does insurance fundamentally change the fact that I do good medicine or not good medicine? The danger is that we start doing everything, whether it's needed or not is a debate. But there's a more, there's a lot [inaudible 00:15:51]. So where we would've maybe done an ultrasound and some imaging, we might now do a CT, so everybody wants CT, when actually we didn't need CT last week but now we do. So there's a plethora of potential. And the owners are going, hang on a minute, I've got this so I can afford care. Now you're spending all of this, I might still need to go to specialty, and I've got a limit of 5,000 pounds, $10,000, whatever it might be.
And it's all gone. And the bit I wanted it for was a bit that I know I can't fund, I could have funded that. So people go, hang on, this works when we are open about the insurance is there for that owner to be able to pay for the care that their pet needs. It's not the golden goose that's going to lay that golden egg for you as a practice owner to say, right, now I make money. That's not what necessarily has happened, but for some pockets, it changes the dynamic of they're insured so it doesn't matter, we won't have the conversation. They're insured so we don't need to discuss this. They're insured so that doesn't need to happen. The owner still needs to know what's happening. They still need to understand the rationale and they still need to understand that, do you know what? I've got insurance so I can choose to pay.
I might not use my insurance. I might put it on a credit card this month because it might affect my excess or my premium next year. So the very fact of being insured is there to help that patient get the care they need. It's not there to enable those folks who've maybe gone, we can charge more for stuff and do more stuff for this patient because it is insured. Whereas the dog in the kennel next door isn't insured, gets a different approach to the medicine. Still both find medicine. But I think that's been a kind of subconscious belief system that for some, not all, but for some, that because they're insured, we don't need to have the open, transparent conversations. And that creates barriers and those barriers don't go away.
Dr. Andy Roark:
I don't know that it was subconscious, Alison. I mean, I remember years ago, pet insurance companies would say, “Hey, if you get your pet owners on pet insurance, then basically you can do what you want and you can practice the medicine that you want.” I think the pet insurance companies kind of put themselves in a hard space, I think early on. This is 10 years ago. [inaudible 00:18:11]
Dr. Alison Lambert:
And maybe that's when we started having this conversation, where I was watching this happening, saying, “Do this, do this and then you can do that.” And it's like, no, no, no, no, no. It's an enabler of care. It is not the solution to your practice finances. And that's when we first started, I think, debating the tonality. I've just said what I've said with reference to the UK, which is we are at this 25, 30, 35% of pets are insured. And it's a stable number, it works. Could it be more? In some practices it may be 50, 60, 70% because they say, “Look, if you're not insured you can't afford to come here. We insist on it.”
Some practices have gone that route. Others have gone, we don't talk about it at all. They might be at 15% insured. Demography, regional variations, there's all sorts of overlays on this. But insurance is there for that pet. It's there for them to get what their owners wish to choose to do. Whether they use insurance or not's a different question, and lots of people choose not to use it because of the fear of the premium change.
Dr. Andy Roark:
Yeah. This is why it's so interesting talking to you, because you and I had these conversations early on. And the messaging in the US had been very much, get your pet owners on pet insurance and then you'll be able to practice the medicine that you want. And now you are seeing increasing numbers in the US pretty substantially, the COVID pet owners. I think, and I actually looked at what's driving these numbers, some of it is connection to the pet, human-animal bond, increased number of pets, people working at home so they're more attuned to their pet and they're more concerned about things that happen to their pet. I think a big part of it is that employers now are really leaning into pet insurance as an employment perk. We're starting to see some of the offerings that you were talking about earlier of, hey, I can get this as part of my home insurance package or my car insurance package.
And that visibility directly to pet owners just didn't exist in the past. And so now we're seeing the numbers of policies going up. And it seems to me, and what I really want to talk to you about was, there's a time coming when the pet insurance companies are going to start looking at their numbers and saying, this model of someone has pet insurance and we just pay for everything forever at the highest standard of care, it's just not going to fly. I just don't see how that happens. And so when I talk to you and you say, “No, in the UK we have this high level of penetration, and there are caps on the amount that people can draw and there are constraints we have to work inside of,” that fundamentally makes sense for me about how the system can work going forward. And so that's what I wanted to explore and hear more about from you.
Dr. Alison Lambert:
The sustainability, we have to talk about sustainability. Sustainability of the entire event. Your business model is a discussion for another day, but the sustainability of a pet insurance product that the pet owner purchases, then repurchases and recommends to their friends, has to do what it says on the tin. Get a pet insurance, don't worry about those big ticket items. If your dog is hit by a car, if your dog is bitten by a snake, if your dog gets a long-term condition, diabetes, whatever, it's relax. You can fund the care, makes the care possible and affordable. What it doesn't have to be is it pays for everything, it just makes the affordability piece work. It may cover all of it, but there'll always be an excess. There'll always be an element that isn't covered. Directed care is their way of making it sustainable. There's only so much money in the pot.
But it's also got to be predictable, and the actuarial data is we pay out for a lot of very predictable things, orthopedic procedures being one of them. If you want a certain hospital or a certain person, you fund the top up. And that's reality now. We've had that now for several years because we had to have, otherwise we would've literally killed goose that laid the golden egg. You can't push. And this is when we started having these like, ooh, just the tonality here, this conversation, it's the savior of the veterinary business model. No, it's the savior of the patient who is hit with a car and the owner's going, euthanasia or a tree. “Oh, I've got insurance, I can go ahead.” But there's a cap and it has to be capped in places which are predictable and known upfront. So my policy, which I've got a cat, Shammy, and a dog, Cato, five-year-old Labrador and a 12-year-old Tonkinese. I've got it for, I need a big thing, a big, big thing.
And that is where insurance is just like home insurance or car insurance. Some stuff you claim on, some stuff you don't. If you claim on everything, at a higher price point, without capping, you kill the golden goose. And that's what I was hearing at conference, and that's why we started talking. It's like, we've got to moderate this as a… It's a thing that helps an owner pay for patient care. And you as a practice can choose your pricing and your marketing and do what you want with it. But some people self-pay, some people don't need insurance. Some people self-pay, it's fine. We've got referral specialty centers that don't rely on insurance and we've got referral specialty centers who are entirely dependent on insurance. Got to be careful.
Dr. Andy Roark:
So as you look into your crystal ball, and we know how reliable crystal balls are these days, but as you look into your crystal wall, it sounds like what you would anticipate as most likely, probably more caps on the amount that pet insurance policies will cover. And then also it does make sense to me, as you say, of people not necessarily making claims, even though they have pet insurance when they come in for a lower cost [inaudible 00:23:52]. It makes sense that they would come in and choose possibly not to use pet insurance even though they have it. And I don't know that that's something that we've necessarily seen in the past, but it completely makes sense to me. Like I go back to human medicine and you say, well, I expect that there are caps and we have deductibles and we have limits to meat and things like that. And that answers some of my questions about how this is sustainable going forward.
Dr. Alison Lambert:
Sustainability is really important. And if you are at the beginning of a rapid growth, if you're getting 16% year on year on year on year, that's pretty phenomenal. Yeah, it's a big market and you start from a low base. It's just make sure that the messaging is around for this to not hit unaffordable premiums because we've put pricing to the point where actually the premiums are now outside of the reach of the typical pet owner, and actually pushes the wealthier, more self-paying pet owner to go, I don't know why I'm bothering.
Because it's going to be a percentage of the population that never take pet insurance because affordability, cash flow, life, it's not their thing for lots of different socioeconomic reasons, is it's got to be sustainable from the get go so that we just go, there will have to be management of what is in and what is not in, and the behaviors within it. Just like human healthcare, if your dog is-
Dr. Andy Roark:
Do you anticipate the customer service conflicts with pet insurance companies increasing as we move forward? I mean, do you see more people butting heads with the office?
Dr. Alison Lambert:
There's a broad church, isn't there? There's a broad church of insurance policies. And within that broad church of insurance policies that we have, you've got fewer, but you'll get more and more. Within that broad church, there's the good, there's the bad and there's the ugly. They always pay up. They're fair. These guys pay up most of the time. They might ask a few questions but they're reasonable. And quite frankly, please don't use them. But we can't say that because we can't direct them to not use.
But when you broaden the church to 350, 400 policies available online and via insurance websites like any money supermarket or you buy any car dotcom type stuff, the default mechanism I'm paying, I don't know. I'm paying $400 a year for insurance. Great. Guess what? You've got my nothing. You just have got what you paid for, which is fresh air. And they're not going to pay up. They'll take your premium but they're going to challenge everything.
Dr. Andy Roark:
Okay. So given where we are right now and the market is growing and we're still early on, if you were queen of American veterinary medicine and had the power to influence the doctor side, the practice side, how would you do it differently? What would you like to see with your magical fairy godmother powers? What would you try to will to happen so that we ultimately ended up with the best system possible?
Dr. Alison Lambert:
My big bugbear with insurance at the moment, and I'm going to answer that question by going round the house to come back to answer that question. If I'm a pet owner, if we start with-
Dr. Andy Roark:
[inaudible 00:27:01].
Dr. Alison Lambert:
Exactly, but we've got to start with a pet owner, just a typical person who's nothing to do with the veterinary profession, but has just got a puppy. They want to do the right thing. Their motivation is to do the right thing. I want to give them the best start. I want to do all the right things. It's my first dog. And they will find they need pet insurance so they'll take it out. They're taking it out so that they're able to fund care as and when it may pop up unexpectedly. That's kind of their motivation is to have this thing. Then something horrific happens, and as I said, there's a $10,000 bill.
At the point where they now have a $10,000 bill, there's two ways this can go. One is they have to pay the 10,000 and then claim it back, or the insurance company pay the practice direct. Now, both of those ways are possible here. Direct claim is the practice is paid by the insurance company, or the owner pays and then there's a claim and the owner gets the money back. Both of those ways are currently possible. I don't pay my hospital for my human healthcare. I don't lay out the money. I don't pay a 10,000 bill to have my gallbladder out. My insurance company deals with it because I'm preauthorized.
I am preauthorized at the point of need. So I could have it done for free in the NHS, by the way. We have a brilliant healthcare system here where everybody can, if hit by a truck, be seen at no charge. But I chose to go to a particular surgeon who's done gallbladders all his life and does some with his eyes closed because I'm just a control freak when it comes to my gallbladder removal. Anyway, it's gone. I don't need a gallbladder. Who knew you needed a gallbladder for anything, really? So I didn't pay-
Dr. Andy Roark:
We drifted off, let's come back.
Dr. Alison Lambert:
Yeah, no, I didn't pay my surgeon. My insurance company paid my hospital. I was pre-authorized. For me, as queen of let's make this better than wherever it is anywhere else in the world, is there has to be a pre-authorization step that means that that pet owner is not compromised. Because they haven't got $10,000, that's why they took out insurance. They haven't got it. They can't put it on the card because they haven't got that head space on their credit card. So they need to be pre-authorized as this pet is valid, this owner is valid, and they have a claim capability given what you, the doctor, has just told us you need to do. We are going to pre-authorize nine and a half thousand dollars to be paid to you so they don't have to pay. So pre-authorization clarity of going into the procedure. This is his pet, this is his patient, this is the cover, this is what they're covered for.
This is what will be covered. I pre-authorize you to do this procedure and we will cover nine and a half thousand dollars. That's 500 to pay from the owner and that is taken prior to procedure. That will be my fairy godmother wishlist is that policies are that sophisticated. And they're not, currently, in the main. The second thing I would like is for our profession, on a broader perspective, to understand the insurance is for the patient outcome and for the owner's peace of mind and that we don't need to see it as a golden goose. And when we have business seminars, and we've sat in the room, you've been speaking, I've been going, “No,” in the back and you've spotted me going, “She's not happy. She's not happy, I can tell she's not happy,” is we mustn't project-
Dr. Andy Roark:
Yeah, you have a face that you make when you're not happy. Or maybe it's just when I talk.
Dr. Alison Lambert:
You have this sometimes as well. We're projecting that the insured pet spends three times more than the non-insured pet. Yeah, well, he probably does, because it's presented with the things that might not have been presented for and goes ahead with a thing that it would've said no to. So yes, that's inevitable. In the same way a wellness plan patient, you see them one time more than a non-wellness plan patient, and an insured wellness plan patient is going to be the peak of the revenue-generating pet. Yes, that's true. That's factual. But there are patients without insurance, there are patients without wellness plans, and they should be in the same care principle as the ones who are insured. It shouldn't not be offered to them just because they haven't got insurance. It shouldn't not be the care pathway because they're not insured.
And that, you've got to be really careful you don't slip into because they're insured, we do it this way and because they're not insured, we do it that way. We don't talk about this, we don't offer this, we don't do that. We don't do those [inaudible 00:31:10]. We don't do that thing. We don't do that pain med. But they're insured, so we do everything. So I know, what about Bobby? Bobby's mom and dad are quite happy to pay for what you've just done, but you never offered it. And I think we need to just be upfront about that because we've drifted where there is a differential. And mostly, it's not deliberate. Sometimes it is. And when you ask the question, “Are you insured?” the owners go, “Well, does it make a difference?” “Well, no.” “Well, why did you ask me?” It's like, hmm, so why did you ask them?
Oh, they're insured. You better do that then. It's like, oh, just that behavioral science piece. Pet is insured. Oh, that's a relief. So yeah, it's a relief for the pet. It's a relief for that pet. So the care plan, the diagnostic pathways shouldn't be different because they're insured. The owner saying yes to them might be higher. And I think that's the finessing of this, which may not come across in a podcast, I don't know. But I think it's a workshop to just our language. So on your classic, what does this mean in reality? Reality, Alison, in reality, look at your consent form. On the consent form there will be a question: dog, cat, name, age, blah, owner, blah, blah. Then there'll be one which says, is this pet insured? There'll be a question about insurance. The moment we said, is this pet insured, the owner hears a different set of meanings to what we're actually asking.
We're asking, “Who is Bobby insured with? Who do we need to talk to?” So change the question.” Who is Bobby insured with?” “Oh, he's with X, Y, Z company.” “Is he insured?” Does it make a difference? It's an antagonistic question. And there's some subtleties in there. Very subtle. Very, very subtle. As soon as you change it to, “Who is Bobby insured with?” “Oh, he's not insured.” “Oh, we recommend it.” “Oh, do you?” “Yeah.” “Okay, great.” We've moved on. It's so subtle. So I think pre-authorization is essential and a whole team understanding of insurance is good for the pet because the pet gets the option to have treatment. The benefit to our clinic is that we all do good medicine and because owners will say yes to treatment plans. It doesn't mean we don't do good medicine for ones who aren't insured, and that needs to be nailed front and center. Because otherwise it slips into a two-tiered system.
Dr. Andy Roark:
I like this a lot. So the parts for me going away from this, I think sitting a little bit and considering the ethics of approaching cases wildly different based on the person's ability to pay, whether it's because they have insurance or because they just have a lot of money, and somehow I know that. I think that we can all see the moral quandary of that and saying, “Well, I offered it to these people, but I didn't offer it to these other people because they didn't have insurance, or because I didn't think that they'd be able to pay for it.” I think that that's fertile ground for just thinking on ethics and morality and what we want medicine to be and how we want to treat people. And the other thing that I'm going to take away a lot from this, I think, is the sustainability part of…
As I look at it, well, the cost of care keeps going up. And I talk a lot about this and I'm really focused on keeping care affordable, and how do pet owners continue to have pets that are well taken care of if prices keep going up? And I'm just a real pragmatist, and the idea that, oh, get them pet insurance and then prices can go up as high as they want and everything will get paid for, I go, guys, that's not how the world works in my experience. And that's kind of the too good to be true feeling where I go, I don't see how the insurance company… It's not going to work for them. And it's just looking at it. So I've taken a lot away from our conversation today in that regard.
Dr. Alison Lambert:
I think the claim rate is something as well. I mean, in the good old bad old days when I was employed, rather than being a business owner, I did actually work for the Mars organization as a non-vet as well as a vet, but as a non-vet. And at one point I was responsible for the insurance policy that Mars had in the UK, which was with the UK Kennel Club. And the claim rate is when people have pet insurance, most people pay, they have a claim. Most people with house insurance don't have a claim. Most people with car insurance don't have a claim. It's a rarity to claim on your car or your home or your travel, whereas you've got pet insurance, it's like, “Oh, I'm going to make a claim. I want to get my money back.” That's not insurance. Insurance is for those moments where you can't self-fund or you're in a position where you couldn't go ahead but the insurance enables you, that patient, to get the outcome.
And we've got a really peculiar mindset around pet insurance, which we need to be mindful that we the profession are not part of creating. And I think that's why the UK got it not right, whereas Sweden got it more right. And Australia is getting it more right, the way they have their gap payment, which is, again, paid for healthcare system. Australia's a really good model to actually look at because it's a paid for healthcare system with some social healthcare in the human sense. So people are used to paying for some stuff and getting some stuff through Medicare. Whereas the UK, we don't pay for human healthcare in the main so we're not used to paying for vet's bills. But you guys are and so are Australians, so the arguments all fall over when you start having that conversation.
One thing just on the pet insurance thing, when we look at where this goes longer term and when you see pet insurance rates going up, you start seeing people having things put in front of them, and then you start building specialty and referral centers that do that thing. You suddenly find referral specialty caseload starts moving. And so what you will find is there's a mirror to, as more and more pets are insured, there may be more and more tertiary level involvement and maybe more kit and equipment involved. So there's more, suddenly CT's needed and suddenly we need to do lots of scoping and there's lots of more magic things can happen, so there's more kits and equipment.
And there's a lot of people benefit from pet insurance other than the pet. And I think that's my perspective is the person who needs this pet insurance is that dog or cat. Actually, the fact you now have a CT and the CT companies have sold a lot of them, or there's now several multidisciplinary or single disciplinary referral centers doing quite nicely because they're doing lots of simple ops, lots of them day in, day out, like my gallbladder surgeon. There's a point where everyone has done very nicely out of pet insurance. But the person who's putting the money in the pot in first place, the pet owner, has to have a sustainable premium versus the claim rate versus the cost of what they're claiming. And when they say, I don't fancy it anymore, that bucket starts going down.
And that's where we were pre-COVID. COVID resurrected insurance. It'll go back down again. You can't keep pushing and pushing this goose. There's only so many eggs it can lay and we've got to be careful. A lot of people have done very, very well out of pet insurance outside of the profession; the manufacturers and magic equipment and centers and stuff. So it's a philosophical conversation, I know. But pet insurance is a good thing if it's sustainable for the pet owner. It's got to be sustainable for the pet owner.
Dr. Andy Roark:
I really like that. I think that fits with my worldview. That feels right. I've always believed it's a good thing. It is a good thing as long as it's tended and maintained and kept in order and make sure that it works. It's got to work for everybody. Alison Lambert, you are amazing. Where can people read more of your writing? Where can they find you online?
Dr. Alison Lambert:
Oh, excellent. If they're mad enough to think they want to do more of this then that's great. If you go to the web, onswitch.co.uk. Onswitch as in on, there is no off switch. That's why we're called On switch. O-N-S-W-I-T-C-H.co.uk. Best place to start the web, social channels. But quite frankly, I'm a little bit like that exclusive thing that if you really want to find us, you'll find us. But if you won't happen upon it [inaudible 00:38:55] because we only want certain people. We only like certain people. So if you find us, we'll probably like you.
Dr. Andy Roark:
I'll put links to Onswitch in the show notes. Guys, take care of yourselves. Alison, thanks so much for being here. Have a wonderful day, everybody.
Dr. Alison Lambert:
Take care, folks.
Dr. Andy Roark:
And that is our episode. Guys, I hope you enjoyed it. Hope you got something out of it. As always, the best thing you could do if you did was leave us an honest review wherever you get your podcasts, or share the episode with your friends. Anyway, gang, take care of yourselves. Be well. Talk to you soon. Bye.
