An Old Dog with New Tricks: In-House Payment Plans

Over the past two decades, as more veterinarians began using third-party consumer credit financing to help clients manage large veterinary expenses, in-house payment plans fell out of favor – and not without good reason.

Managing in-house payment plans can be an enormous administrative burden, and the methods typically used – promissory notes, verbal agreements, holding post-dated checks or credit card information – failed to garner satisfactory payment compliance from clients.

20 years later, with both pet owners and the veterinary profession facing unprecedented financial challenges, it may be worth taking another look at how in-house payment plans have changed, and how in their current format, they can actually help the business of veterinary medicine.


Why Do Pet Owners Even Need In-House Payment Plans? Isn’t Offering CareCredit Enough?


1.) It isn’t enough anymore, because a significant number of pet owners in the U.S. don’t have access to consumer credit.

Approvals for new credit average only around 40%, which means that many pet owners simply aren’t able to use consumer credit/third-party financing as a tool for managing large, unexpected veterinary bills. Surprisingly, while lack of access to credit is predominantly a problem for lower-income pet owners, many middle and upper middle-income pet parents are so highly leveraged that consumer credit is hard to come by for them as well. There are also certain populations for whom the availability of credit will always be problematic:

    1. Anyone on a fixed, limited income – this group consists of retired seniors, individuals on disability benefits, and wounded military veterans;
    2. Those who have a “thin” credit file (not enough credit history – otherwise known as “credit invisibles” or “credit unscoreables”) – this includes persons of color who are disproportionately impacted by lack of access to traditional credit; young adults just entering the workforce after college; anyone entering the job market after a life transition such as being widowed or divorced; and even recent legal immigrants to the United States who, despite having a stellar credit history in their country of origin, cannot bring their credit history with them. It takes 2 – 4 years to build credit in a new country.

Pet owners who fall into the above categories generally won’t ever qualify for third-party financing options such as CareCredit or Scratchpay.

Contrary to popular belief, being declined for third-party financing doesn’t always mean that a pet owner can’t or won’t pay. It also doesn’t automatically mean that the individual has a poor payment history.

There are many variables included in algorithms for credit approval, and a credit decline can be due to factors that are entirely unrelated to a person’s payment history. Some of these factors include the following: not meeting a certain income threshold; having applied for another line of credit too recently; having too many open lines of credit; not owning a home (on-time rent payments aren’t tracked by credit reporting agencies); or simply not using credit very often – which should be a good thing, but it actually works against those who apply for credit in an emergency situation, as is often the case when someone has an acutely ill or injured pet.

Senior pet owners who are on a fixed, limited income frequently don’t qualify for financing options such as CareCredit®.

What about pet insurance?  Won’t that keep pet owners from needing to make payments?


2.) Pet insurance has yet to be widely adopted in the U.S.

Even though pet insurance first became available in the mid-80s – over 30 years ago – only about 2% of pet owners in the United States hold a policy.  Why is it that pet insurance hasn’t gained much traction in this country?

A significant reason may be that most pet insurance companies rely on a reimbursement model when paying out claims.  What this means is that the pet owner is still responsible for paying the total, upfront out-of-pocket cost of veterinary care, and then must wait to be reimbursed.

When the cost is in the thousands of dollars, many pet owners simply can’t come up with that amount of cash or credit immediately.

Such scenarios occur more often than one might think.  In an interview with CBS Money Watch, Elyse Cannon, veterinary manager for PetPlan Pet Insurance, noted that “every six seconds a pet parent is handed a vet bill for more than $3,000.”

Unlike with human health insurance, pet insurance doesn’t protect pet owners from large, out-of-pocket costs.  What this effectively means is that pet insurance is best suited to those who can already afford those large costs, and who can also afford to wait to be paid back.

There are some exceptions to the reimbursement-only model.  Trupanion offers a direct pay option, although veterinary hospitals must consent to accepting this arrangement.  Some other insurance companies, like Pets Best, will arrange to pay the vet directly, but this must be set up in advance and requires the vet’s approval.

Why offer payments when charitable foundations can help financially challenged owners pay for veterinary care?


3.) Charitable grants are hard to get and amounts awarded often fall far short of the amount needed.

When a pet is facing a life-threatening illness or injury and the pet owner is short on funds, many veterinary practices recommend applying for charitable assistance.

The challenge here is that charitable resources are very limited.  Amounts awarded range from $100 to $2,000, with the average being around $500, according to Carol Smock, founder of Brown Dog Foundation, an organization that provides funding for treatable pets in need of life-saving veterinary care.

While Brown Dog Foundation strives to fund the entire amount needed, many organizations award a flat maximum amount, and this is often far less than many pet owners need if a pet requires surgery or emergency care.

Almost all charitable organizations require pet owners to complete an application for assistance.  Approvals are rarely immediate, and far more applications are rejected than approved.

Because these resources are so scarce, they are best reserved for pet owners who truly have no ability to pay whatsoever – those who are unemployed, homeless, or otherwise financially insolvent.

Pet owners who are simply illiquid – meaning they have access to a future income stream and can pay over time, just not all at once right now – are candidates for in-house payment plans rather than charities.

In some cases, charitable grants can be successfully paired with in-house payment plans.  The grant amount can cover a down payment or certain percentage of the procedure, with the balance going on an in-house payment plan.

Can’t pet owners with limited funds set up crowdfunding campaigns, so they don’t need to make payments?


4.) Crowdfunding campaigns run the risk of not being funded quickly enough, and not being funded adequately.

Another popular recommendation for financially challenged pet owners is crowdfunding.

Platforms like GoFundMe allow pet owners to set up fundraising campaigns on their own. Newer entrants in this space such as CoFund My Pet and Waggle ensure that all funds raised go directly to the treating veterinarian, eliminating the risk of fraudulent campaigns.

The challenge with a crowdfunding plan is that time is needed to raise money – and the larger the expense, the longer it may take to reach the fundraising goal.  If a pet needs immediate treatment, a crowdfunding campaign may not be the best strategy if time is of the essence.

There’s also the chance that a crowdfunding campaign simply won’t raise enough cash to cover all the expenses incurred.

This is another situation where having an in-house payment plan program can be helpful.  If the veterinary team knows that a pet parent has launched a crowdfunding campaign, the funds raised – even if not enough to cover all expenses – can go toward a down payment to cover at least part of the hospital’s costs, and the remainder can be assigned to a payment plan.


5.) Lack of financial access to veterinary care has reached a crisis point in the United States.

Through a generous grant from Maddie’s Fund, the Access to Veterinary Care Coalition (AVCC) commissioned a national population study to better understand the barriers to veterinary care experienced by pet owners across the socioeconomic spectrum.  The findings of the study were published in Access to Veterinary Care: Barriers, Current Practices and Public Policy, released in December 2018.

A key finding was that the overwhelming obstacle for all groups of pet owners and types of care (preventive, sick, and emergency care) is financial, and that 1 in 4 families have experienced a barrier to accessing veterinary care. 

According to the AVCC report, “millions of pets do not receive adequate veterinary care because the costs are beyond the family’s ability to pay.  This may be the most significant animal welfare crisis affecting owned pets in the United States.”[1]

The report goes so far as to admit that, historically, the position taken by the veterinary profession when it comes to families who can’t afford veterinary care is that they simply should not have pets.

However, the report’s authors take issue with this: “…denying families companionship with pets is an untenable solution.  Pets enrich the lives of humans, and pets also benefit from the relationship. There is evidence that the human-animal bond supports mental, emotional, and physical health and well-being…Thus, denying a family the companionship of a pet is difficult to defend.”[2]


6.) In-house payment plans aren’t what they used to be.

The days of having pet owners sign promissory notes or hand over post-dated checks in lieu of full payment should be long gone.  Rapid acceleration in financial technology means that cost-effective in-house payment solutions are more widely available to veterinarians, through outsourcing to reputable third-party payment management companies.

Veterinarians can still try to manage in-house payments themselves, although there are caveats.  Some versions of practice management software allow for recurring client payments, and such payments can also be set up through a practice’s credit card processor.

But the challenge arises when payments return or decline and require follow-up.  Managing payment exceptions is time-consuming, and it requires shifting a member of the veterinary team away from their usual duties to act as a collection specialist.

These team members typically aren’t trained in how to do this. They hope they can get the client on the phone on the first try, and then get a promise that the client will mail a check or provide a credit card number for payment.

This has never been an ideal system for effectively collecting veterinary accounts receivable and is likely why such arrangements have had historically poor success rates.  Too much of the control is left in the pet owner’s hands, in terms of when and how often payments will be sent.

A third-party payment management company like VetBilling® allows veterinary practices to bypass all this extra work.  We equip practices with systems and tools to offer in-house payment plans while also managing the administrative burden of following up on and collecting problem payments.

VetBilling® immediately attempts to reprocess failed payments; contacts the pet owner using multiple methods of outreach; provides full collection services; and reports payments to the three major credit bureaus, taking all these tasks off the veterinarian’s plate.

Practices should ideally investigate at least three different payment management companies before settling on the one they’d like to work with.  Fee structures vary from company to company.  Some require their own approval process, while others, like VetBilling®, give the practice the freedom to determine approvals based on their own in-house criteria.

In Summary…


We have reached the point where in-house payment plans should once again be considered a viable option for helping clients pay for veterinary care.

The veterinary profession has traveled full circle, from offering in-house payment plans decades ago, to dropping them in favor of third-party financing, to now grappling with the reality that third-party financing just doesn’t help enough clients.

Outsourcing in-house payment plans results in better efficiency and significantly improves payment compliance.  Clients are grateful to have a flexible way to pay for care, and veterinarians can say “yes” to accepting cases that they might otherwise feel compelled to turn away, fearing the financial risk.

Offering an in-house payment plan is preferable to discounting, writing off services, euthanizing treatable animals, or asking owners to surrender their pet.

If in-house payment plans can keep pets and their people together, and positively contribute to the financial health of the practice by bringing in unrealized revenue, it may be time to reevaluate this “old dog” who has managed to learn some new – and more effective — tricks.



“The Importance of Credit Reports and Credit Scores for Building Financial Security.”

“Data Point: Credit Invisibles.”  Consumer Financial Protection Bureau, May 2015.

“What Are Your Odds of Getting Approved for a Credit Card?” February 2019 Rosemary Carlson, The Balance (financial education web site)

“6 Reasons You Can Be Rejected With An Excellent Credit Score” March 2015 Nick Clements, Forbes Personal Finance

“Pet Insurance – Direct Pay to Vet” by Doug Kenney, DVM July 2018 from Your Pet Insurance Guide

Access to Veterinary Care: Barriers, Current Practices, and Public Policy (report of the Access to Veterinary Care Coalition, December, 2018

[1] Access to Veterinary Care: Barriers, Current Practices, and Public Policy.  Dec. 17, 2018.  University of Tennessee, Knoxville, Section 4, p. 1.


[2] Access to Veterinary Care: Barriers, Current Practices, and Public Policy.  Dec. 17, 2018.  University of Tennessee, Knoxville, Section 4, p. 2.