You can educate about the value of veterinary services all day long, but if you are not also offering flexible options for payment, pet owners will continue to stay away from your veterinary hospital because they perceive that the cost burden is too great. Sometimes, it really is about the money.
There is a lot of discussion these days about the importance of effectively communicating to pet owners the value of veterinary services. Helping pet owners understand the value and benefit of veterinary care, it is believed, will motivate them to visit their vet more often. It is also thought to be a way to increase pet owners’ willingness to pay for veterinary services.
In fact, an oft-quoted statement heard in the veterinary community is, “price is only an issue in the absence of value.”
While this makes absolute sense – no one is going to seek out, or pay for, services that they don’t value – it doesn’t go far enough. Value is only one piece of the equation when it comes to encouraging pet owners to take their animal to the vet. Trying to sell pet owners on value, without simultaneously providing them with flexible ways to pay for that value, is like, well…herding cats! You’re just not going to get most pet owners to follow along.
It’s a well-established fact that in recent years, veterinary visits have been continuously declining. The Veterinary Hospital Managers Association’s (VHMA) most recent data (Sept. 2019) on new client growth was accompanied by this summary statement: “New client numbers in September, 2019 compared to September, 2018 declined by 8%; the year-to-date 2019 decline is 12.3%, compared to a 12.6% decline for the full year of 2018. This continues to be a discouraging trend as these numbers have declined almost every month of the last four years.” (VHMA Insiders’ Insights, Sept. 2019, link in references.)
Some in the veterinary profession place partial blame on “Dr. Google,” who is always ready and willing to dispense free veterinary advice – although the quality of that advice is questionable at best. Others think the reason for fewer visits is because pet owners aren’t sufficiently aware of the importance of routine preventive care for their pets. The solution, say some veterinary thought leaders, is to educate pet owners, so they understand why regular vet care is essential.
Unfortunately, even though survey after survey indicates that pet owners are most concerned about the cost of care (despite fully understanding its value for the health and well-being of their pet), almost no one in the veterinary profession discusses ways to effectively assist pet owners in overcoming the cost barrier to care.
I truly believe that for too long, the role that money plays in declining vet visits has been underestimated. The most recent data (available from the Federal Reserve, The Pew Charitable Trusts, The Brookings Institution, etc – see sources cited below) shows the financial fragility of most U.S. households. Declining savings rates, inability to fund an unexpected emergency of just $400, difficulty obtaining credit (and this isn’t just a problem for low-income households), and the fact that a significant number of Americans live paycheck-to-paycheck (again, not just a low-income problem), are defining elements of the current financial landscape.
The veterinary profession must be more willing to meet pet owners where they are financially. The human healthcare sector is realizing this as well, due to the effects of the Affordable Care Act and resulting high-deductible healthcare plans (HDHPs) that have shifted a significant amount of the out-of-pocket cost burden to the patient, who must now self-pay. Consequently, many hospitals across the nation are putting “patient-centered” payment options in place, in an effort to be proactive with collecting payments. Veterinarians would do well to take a serious look at how human healthcare is helping patients cope with rising out-of-pocket costs.
When emergency veterinary care saved my dog’s life over a decade ago, I certainly appreciated the value of the services received. I was deeply grateful to the critical care team whose knowledge, expertise and compassion contributed to a successful outcome. But I still didn’t have $4,000 readily available on the spot. Did I want to pay? Absolutely. Was I offered a way to pay that seemed commensurate with the compassion that was offered during my dog’s hospitalization? No.
(By the way, I had a pet insurance policy at the time – I had been a policyholder for over 12 years by then. But because pet insurance is predominantly a reimbursement-only model, it did not protect me from the large, out-of-pocket cost burden…which is what human health insurance does. This isn’t practical for most pet owners, and I learned that the hard way.)
The prevailing payment model for veterinary care – in full and up front – which is the final act capping off a client’s veterinary experience, can quickly destroy all the goodwill that was earned by compassionate, expert medical care when there is a perception that the hospital is inflexible about payment – especially when the pet owner is facing a large bill. That loss of goodwill then becomes the defining element of the whole experience for the pet owner, and can overshadow any feelings of gratitude and appreciation they have for a job well done by the veterinary team.
Which the team deserves, and then doesn’t get.
We recently had to take a family member’s Labrador puppy to the emergency clinic after she ingested parts of a tennis ball and required emergency surgery. I had some time alone with one of the veterinary nurses who said to me, “the only thing you see about us [the hospital] when you read reviews is, ‘they’re all about the money. They don’t care about pets.’ And it really hurts — I work 16 hours a day, 6 days a week because I love this. I don’t do it for the money – none of us do. We go above and beyond for our patients. But all the clients see is how much it costs, and how unfair it seems that we don’t offer payment options that most clients qualify for. So in the end, it’s almost like what we do for their pets doesn’t matter.”
There is a huge emotional toll exacted on both sides when flexible payment options aren’t available. CareCredit and Scratchpay, which are based on traditional credit models, unfortunately don’t help enough pet owners today. With an overall approval rate that hovers around 40%, too many pet owners are denied access to care when they don’t qualify for these options.
You can educate about value all day long, but if you are not offering clients creative options for paying, they will continue to stay away because they perceive the cost burden to be too great.
Educating about value is extremely important. It is absolutely necessary that pet owners understand what they are paying for. But helping them find realistic ways to pay for that value – by offering pay-over-time methods that are reasonable and attainable for “average” people – is equally, if not more, important – even urgent. And not just for pet owners, but for the well-being of vet teams too.
VHMA Insiders’ Insights: The Insiders’ Insights Benchmark Report is published by the Veterinary Hospital Managers Association (VHMA) on a monthly basis. The report tracks several key economic indicators to determine how VHMA member practices are performing, as well as results from VHMA surveys on issues impacting the profession. There are over 700 VHMA member practices who regularly contribute key economic indicator data. Data is representative of companion animal practices only.
Link to access reports (must be a VHMA member to access: https://www.vhma.org/resources/benchmark-reports)
Report on the Economic Well-Being of U.S. Households in 2015: U.S. Federal Reserve, 2016. p. 22
Financially Fragile Households: Evidence and Implications. Lusardi, Schneider, et al. The Brookings Institution, 2011.
Survey of American Family Finances: The Pew Charitable Trusts. March, 2015.
How Do Families Cope with Financial Shocks: The Role of Emergency Savings in Family Financial Security: The Pew Charitable Trusts. October, 2015.
Reversing the Decline in Veterinary Care Utilization: Progress Made, Challenges Remain: White paper. American Animal Hospital Association (AAHA), American Veterinary Medical Association (AVMA) & Partners for Healthy Pets. March, 2014.
JAVMA News: Vital Statistics. Katie Burns, January 2013.
Partners for Healthy Pets Reports Elicit Concern, Optimism Over Preventive Care Statistics. Hardesty, Constance. AAHA.org: July 2014.
Revenue Cycle Management as return on investment. DiChiara, Jacqueline. RevCycleIntelligence: April, 2015