Friday, September 17, 2010
Affording veterinary care in a struggling economy
In this episode:
- Affording veterinary care in a struggling economy.
- Going green segment: Clean coal!
Transcript of this week's episode of The Web-DVM:
Hello pet lovers, and welcome back to another edition of The Web-DVM. My going green segment to come later in the broadcast but first, we need to discuss an ever growing problem in my industry, and that is, affording quality health care for your pets in a struggling economy. With a new round of foreclosures underway and great uncertainty on how that will affect our economic recovery, things do not seem poised to get better any time soon, so rather than whine about it, we all need to tighten our belts and prepare.
So let us begin with how I have had to make tough choices and brace my clinic for weathering this most unexpected monkey wrench in my plans for growing my business. I must bring this up, because along the way in my industry, people struggling financially have gotten the impression that I should be discounting services and medications, even outright giving them away for free, or allow them to run up tabs that they can make payments on. Somehow some people feel that because I am in a health care related industry that I am mandated to work for them at a discount or for free, because unlike other businesses, I do not have to cover costs like taxes, insurance, licensure costs, payroll, payroll tax, employee health benefits, inventory, business and real estate mortgages, etc. Well guess what folks, my business may be a clinic in with the mission of healing, but in the end, it is still a business, with all the aforementioned costs right long with it, but worse, because I also happen to have another mortgage in its own right to pay, my student loan debt I accrued in order to pay for the schooling necessary to achieve my veterinary degree, a monthly payment which is higher than many peoples’ home mortgages.
Okay, so it is clear why veterinary clinics cannot give away or discount services, but why can’t we allow clients to make payments on a tab? Well, when I first took over my clinic in 2004, we had a billing policy where people could pay down on a tab. Interestingly, the doctor who I purchased the clinic from, had $12,000 in money owed to her at the time she sold me the clinic, the likes of which, I gave my blessing for her to pay the office manager at the time after hours to call and collect on that debt. Seeing that astronomical accounts receivable outright frightened me as a new business owner, which prompted me to end that policy immediately. And boy was I justified, as my predecessor to this day has not even collected half of that, proving the bottom line that people who run up tabs tend not to pay, end of story. And it is for that reason that the vast majority of veterinary clinics have a strict no billing policy.
However, still wanting to give people a payment option if they did not have the cash to afford pet medical services, I signed my clinic up for Care Credit, which is a third party medical lending program popular in elective medicine such as fertility clinics, chiropractors, dentistry, and now, veterinary clinics. Care Credit does run a credit check, but they are very lenient, and even allow co-signors when prospective borrowers get denied. The debt is typically no interest over the course of 6-12 months depending on credit worthiness, as I pay the participating merchant pays the interest as compensation for them carrying all the risk. Despite Care Credit’s leniency, prospective borrowers still get denied frequently. Just last week, a couple got denied for Care Credit, at which point they became irate that I would not make an exception and allow them to make payments. To this I asked, “Let me get this straight, you are upset with me that I do not trust that you will pay on your bill, when your credit score proves quite clearly that you do not have the ability or inclination to pay your debts?” To this they replied that I should be more willing to allow billing because I provide health care and am supposed to have greater compassion than other types of businesses. Well, folks, the grocery store across the street from my clinic is in the business of selling food, something we all need to survive. I would like anyone who says I should allow billing to go in there and ask to run up a grocery tab that they can pay down over time and see what they would have to say about that.
Alright, so it is clear that veterinary clinics cannot give away services, discount services, nor allow billing, which means that pet owners must provide payment when medical services are rendered one way or another. How are pet owners financially struggling in this never ending recession supposed to do that? One answer that pet owners should really start giving serious consideration to is pet insurance. Why more pet owners do not carry insurance for their pets is not really clear, but we do know that only less than 3% of pet owners carry insurance. Contrast that with the more than 50% of pet owners that carry pet insurance in Europe, it is clear why European pets have a statistically much higher likelihood of receiving quality health care, while European veterinarians report much less frustration than their American counterparts at being medically stifled by pet owner’s inability to pay for a high standard of medicine. We really should learn from this European pet health care model that works very well.
The way that most pet insurance programs work is that the pet owner pays for pet medical services as they normally would, then submit a claim to get reimbursed, in most cases 80% of the cost of the veterinary care. Depending on the age of your pet and/or medical history, monthly cost of premiums can range from $35 - $55, a much easier sum to keep up with than to fork out a substantial lump sum payment should extensive diagnostics and treatments be necessary. It is important to keep in mind, however, that reimbursement is not instantaneous and can take as long as 30-60 days depending on the pet insurance company. That is why it is still important to keep the credit worthiness to take out Care Credit or leave a few thousand dollars available on a credit card to make pay for services while you await reimbursement. If your credit is shot and credit card or Care Credit are not an option, then a good policy to keep is to have a separate savings account where on a monthly basis, you deposit money in an amount equivalent to amount of your monthly pet insurance premium.
Let me be clear that I am not in the business of advocating for the pet insurance industry in general, because like any other industry, not all pet insurance companies are created equal. That is why it is important to do your due diligence before selecting a pet insurance company, and utilize consumer research options like the Better Business Bureau or even just ask your veterinary clinic on which companies they find to have higher satisfaction ratings.
Today’s going green energy segment is about clean coal technology. Most of us a re well aware that coal is an abundant energy resource, with currently known stores of coal, even with our current and projected significant increase in energy demand, still is poised to last for 200 years or longer. The problem with coal is that it is a fossil fuel, the burning of which is not only polluting, but perhaps the biggest producer of the greenhouse gas, carbon dioxide, known chemically as CO2. For scientists all over the world and for most American scientists, there is compelling evidence that CO2 accumulation and the subsequent heating of the planet is increasingly becoming one of humanities greatest threats. Of course, we have a good number of politicians, namely those from that good old republican party that can always be counted on to try to keep us on the energy policy of the previous century, that deny irrefutable scientific proof of global warming as the result of the burning of fossil fuels. Rather than have us believe overwhelming mainstream scientific thought, along with Fox News, they instead put their faith in the vast minority of scientists that do not think that global warming is real, and showcase these three or so scientists as if they actually represent mainstream scientific thought. This is a denial of epic proportions.
You see, global warming deniers are so because they do not want to give up their SUVs, and in the case of coal, they do not want to give up what is an abundant and cheap energy source that also supports the economies of many states, particularly those of the Appalachian Mountains. President Obama understands this, but rather than deny what science has overwhelmingly proven, while at the same time being reluctant to eliminate what is an abundant and economically necessary energy source, he seeks to make it cleaner, aka., clean coal. Of course, his opponents during the 2008 presidential campaign and his opponents now laugh off the legitimacy of his advocacy of pursuing clean coal technology as folly, an impossible endeavor that is a waste of time and money. Really?
Well, I just happen to be aware of a number of examples of real, legitimate clean coal technologies that are surfacing all over the world, everywhere else of course, but here. The most successful, cost effective, and well known example of clean coal technology is that of the energy corporation, Vattenfall in Germany, currently used to power several large cities in Germany. Vattenfall has developed a carbon capture and sequestration process by which coal is burnt for energy production, but rather than release all that polluting and global warming CO2 back into the atmosphere, they capture it in what is known as flue gas, which is then compressed into a liquid that is stored deep underground. We effectively get the benefit of coal energy without the polluting consequence. You see what can happen when we stop denying what science has proven to be true, and then endeavor to do something about it?
Now, I know what many are thinking right now. What was the purpose of telling you about this technology? It is not like any one of us has the political pull or money to start one of these plants. This may be true, but most of us can write, and we all can vote. What we do with this information is to start letter writing campaigns and petitions to pressure current leadership to look into these technologies. We can reject would be leaders that reject science and progress in favor of denying and providing excuses why we need to remain on energy technology of the past, and vote instead for leaders that embrace green energy and the prosperity and safety it can provide for our children.
That is our show for this Saturday, September 11, 2010. Remember to catch me this Wednesday 9PM EST for my live radio show at webdvm.blogspot.com, where you can call me with questions or comments toll free, live on the air.
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Dr. Roger Welton is the President and chief veterinarian at Maybeck Animal Hospital in West Melbourne Florida, as well as CEO of the veterinary advice and health management website Web-DVM.net.