Veterinarians confer on their own survival High costs: Veterinarians look to pet insurance as one way to help generally small practices stay afloat.

July 28, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Many of the thousands of veterinarians at the annual American Veterinary Medical Association convention this week in Baltimore are convening to talk about, among other things, their survival.

The nation's veterinarians, the majority of whom are small-business owners, operate in a high-cost business that requires them to do everything from providing care to staying up to date on medical advances to collecting payments.

The consolidation trend that has swept the human health care industry has barely touched veterinary medicine, with the result that most of the 43,000 veterinarians in private practice work on their own or with one or two others.

One trend that could help the industry is pet health insurance, which makes payment of bills more likely, supporters said.

The insurance also could add to the small-business owner's profit because pet owners with insurance would be more likely to choose expensive procedures, they said.

The possibilities could be many, but the opportunities are few, said Richard C. Swanson, president-elect of the 60,000-member AVMA.

Swanson will be sworn in tomorrow, the final day of the five-day meeting at the Baltimore Convention Center attended by more than 8,000 veterinarians, exhibitors, technicians and students.

"We have little insurance in our business. We would love to have more," Swanson said of the $10 billion-a-year veterinary industry.

About a half-dozen companies provide pet insurance, and most of them are start-ups.

Anaheim, Calif.-based Veterinary Pet Insurance Co., the granddaddy of the industry, has been providing insurance for dogs and cats since 1980. The company is looking into offering insurance on pet birds. The U.S. pet dog, cat and bird population has been estimated at 112 million.

VPI has issued 90,000 policies, a 150 percent increase in the past year, said Jack L. Stephens, a veterinarian and president of the company. VPI is underwritten by Scottsdale Insurance Co., a subsidiary of Nationwide Insurance Enterprise, one of the country's largest insurance providers.

Of the nearly 6,000 medical ailments dogs and cats can develop, the most common is ear infections. But illnesses can range from a skin rash to cancer.

"If your pet was ill or injured and it cost $1,000 to treat him, would you do it?" Stephens asked. "Many pet owners would forgo that cost and would most likely put the pet to sleep."

Insurance offers pet owners more treatment options and veterinarians more revenue, he said. "I never dreamed that pet owners would pay for chemotherapy," he said.

Premiums are about $100 a year and steadily increases with the age of the pet, Stephens said.

VPI and Ralston Purina Co. have used the convention as a platform to announce a strategic relationship to promote insurance among pet owners, he said.

The focus on pet insurance could alleviate some stresses in a profession that requires significant investment of time and money, industry leaders said.

It takes at least eight years of schooling to become a veterinarian. And equipment costs often are high. X-ray machines can cost $20,000; ultrasound equipment, $15,000; and blood chemistry equipment, $5,000.

The average starting salary is $35,000, and annual earnings for those in private practice typically top out at about $58,000, according to the AVMA. Veterinarians who work for industry make the most, an average of about $94,000.

About 2,300 graduates each year go into veterinary medicine, Swanson said.

Some veterinary schools are offering business courses, said Jane Brunt, founder of the Cat Hospital at Towson, a past president of the Maryland Veterinarian Medicine Association and chairwoman of the convention's host committee.

"There's so much scientific information, there's very little room for business training, but that's changing," Brunt said.

"In this profession, you can't pay off your $80,000 college bill in two years, but veterinary medicine still allows professionals to earn a living, practice medicine and gain fulfillment," she said.

Pub Date: 7/28/98

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