Wellness Plans Offer Substantial Benefits: Patients, Clients, and Practices All Win

by Sarah Ratliff

One of the surest strategies for improving patient care and profitability is to offer wellness plans, which are perhaps the most underutilized marketing tool in the veterinary industry. Studies show wellness plans can attract new clients, boost practice profits, and ensure a steadier flow of year-round income. Yet the majority of veterinary practices still don’t offer them as an option.

How Do Wellness Plans Work?

Wellness plans for pet owners work like membership clubs. In return for paying a set monthly fee, pet owners gain access to a predetermined menu of goods and services, which they can implement at their discretion.

The focus of wellness plans is preventive medicine. Plan subscribers can bring their pets in for physical examinations two or three times per year for routine checkups and to check for previously undetected medical conditions. Wellness plans may also include free or reduced-cost access to services and procedures that can prevent health problems from occurring in the future (teeth cleaning, nail trimming, grooming, etc.). Discounts on various types of over-the-counter pet healthcare products, toys, or food may also be included in wellness plans.

The wellness plan concept has advanced considerably over the past few years. The concept and the monthly subscription model were first introduced at Banfield clinics, which offered discount care with a preventive focus. Basic plans are still available, but it is now possible to purchase plans that include a much larger menu of services, covering a broad range of preventive and maintenance health procedures.

Partners for Healthy Pets (PHP) has a collaborative repository of information geared toward veterinary professionals. According to PHP, the core elements of wellness plans are a commitment to a year of preventive services on the part of the pet owner, and the opportunity to pay for those services in monthly installments or a lump sum. The PHP website has much more information on wellness plans, or as they call them, preventive healthcare plans.

See Partners for Healthy Pets for more information.

Bayer Veterinary Care Usage Study Points to Wellness Plans

The Bayer Veterinary Care Usage Study of 2011 was the most exhaustive study of pet owner attitudes ever conducted. It was designed to discover the reasons why visits to veterinarians were declining and to identify possible solutions to the problem.

In a particularly enlightening part of the study, participants were asked to list the reasons why they would be willing to take their pets to a veterinarian more often. Here are their top three answers:

• If I knew I could prevent problems and expensive treatment later (57%)
• If I were convinced it would help my pet live longer (56%)
• If each visit were less expensive (50%)

Wellness plans offer the ideal inducement for those concerned about the items on this list. Finding previously undetected health issues and offering less costly yet highly effective early stage treatments to extend a pet’s lifespan while holding down the costs of a single visit are what wellness plans were designed to do.

Wellness plans check the appropriate boxes on all of these concerns—as the pet owners who participated in the Bayer survey seemed to implicitly understand.

When asked to identify specific innovations in veterinary practice that would likely increase their frequency of visits, 45% of those who responded signaled their approval of a wellness plan billed in monthly installments. When the idea was explained more in detail as “a payment plan under which you would be billed in equal monthly installments for a year’s regular veterinary services that would cover all of your pet’s routine healthcare for a full year, qualify you for certain discounts or free visits, and eliminate large invoices at the time of visit,” more than 50% of dog and cat owners classified the idea as “valuable” or “extremely valuable.”

National Veterinary Associates Survey Confirms the Profitability of Wellness Plans

National Veterinary Associates (NVA), one of the world’s largest veterinary and pet-care service companies, began offering wellness plans at 7 of its practices in 2011. The results of this pilot program were promising, and the program was eventually expanded to more than 100 of NVA’s veterinary practices in multiple states.

An internal survey that began in 2014 definitively verified the profitability of the company’s wellness plan model.

At all participating hospitals, they found that mean spending for medical services among established clients who purchased wellness plans increased by 58% (in comparison to their preplan spending). They also measured a 67% increase in the average number of annual professional services visits among these clients (up to 5.5 visits annually from 3.3).

Intriguingly, NVA also found that new wellness plan enrollees increased their spending on nonmedical products and services by 28% annually.

Practices that decide to offer wellness plans aren’t targeting their existing client base exclusively, or even primarily. One purpose of wellness plans is to attract new customers.

At the Doral Centre Veterinary Hospital in southern Florida, the staff estimated that wellness plans alone were responsible for bringing in 30 to 40 new clients each month. NVA veterinarians who participated in the internal survey noted that wellness plans seemed to be especially attractive to new pet owners, who had no frame of reference to go by when estimating pet healthcare costs and, therefore, preferred to have some type of guarantee in writing.

Considerations for Starting a Wellness Plan

Wellness plans can be extremely helpful to a practice, but they can also be tricky to implement.

Karen Felsted, CPA, MS, DVM, CVPM, CVA, owner of PantheraT Veterinary Management Consulting, said there are a few key things to consider before offering a wellness plan.

“I’m a big fan of wellness plans but they take some time and effort to do well,” Felsted said.

Several things to think about when considering offering these plans to your clients include coming up with goals for what the wellness plan will achieve, providing client and staff training, and determining the logistics of who will handle the details of creating and administering the plans.

Goals

Felsted points out that having specific goals in mind is important when starting out. For example, she said, ask yourself, “What care do you specifically want your clients to provide more of for their pets? What are you passionate about seeing them do? Is it annual bloodwork? Regular dental care? Something else?”

“Wellness plans work best when they include the services or products the practice thinks are critical for good care,” Felsted said.

Education

Educating staff and clients about the benefits that wellness plans offer, as well as the different options available, is the best way to maximize your return on investment. After all, if staff is not aware of all the features of your particular plan, they can’t promote it or explain it to clients.

“Don’t skimp on either staff training or marketing and communication efforts with pet owners,” Felsted said.

Logistics

You will need to figure out how you are going to handle the administrative side of the plans, Felsted said. That includes collecting payments, managing renewals, following up on expired credit cards, and gathering the data needed to assess success.

“Some practices want to do it all themselves and others want to outsource the work,” Felsted noted. “There isn’t a wrong choice here, but if you’re going to do it yourself, make sure you have the staff hours and expertise to do it right.”

Outsourcing Options

So, why haven’t wellness plans quite caught on more widely? One reason may be the administrative demands that implementing wellness plans places on practices. Compliance would have to be monitored, along with specific details unique to each plan. This could turn into quite a headache for practices handling such responsibilities all on their own.

If you decide to have a third party do the legwork, there are companies you can hire that will handle all aspects of a wellness plan. AAHA-accredited practices can take advantage of the AAHA Pet Wellness Plan program, in a partnership with AAHA Preferred Business Provider VCP. VCP packages include customizable wellness plans, plus access to the administrative software necessary to implement and manage wellness plans.

“We have coaches that work with each practice,” said Bob Richardson, president of VCP, “who go through this and say, ‘Hey, what’s your customer base like?’”

An outside wellness plan provider’s software can help streamline and simplify administrative tasks substantially, regardless of the complexity of the plans offered. Without such software, “this would be a real pain in the neck,” Richardson acknowledged. “But assuming the software takes care of all that stuff, it gives you the ability to create these bundles that make sense to you.”

IDEXX Studies Demonstrate Effectiveness of Wellness Plan Approach

The Bayer Veterinary Care Usage Study also found that 46% of pet owners would bring their pet to the veterinarian more often “if [they] really believed [their] pet needed more examinations more often.” Wellness plans also address this concern, since one of the primary justifications offered for wellness plans is that they increase the willingness of pet owners to bring their animals in for regular preventive testing.

This is important, since it is these tests that will catch many diseases, illnesses, and potentially debilitating conditions in their early stages.

IDEXX Laboratories, Inc., based in Westbrook, Maine, sells a variety of diagnostic testing products to veterinary practices. To monitor the effectiveness of wellness visits that use their products, in recent years they’ve analyzed their database to discover how often screening procedures were returning clinically significant findings.

In one study, IDEXX researchers examined blood-testing data obtained by veterinarians during more than a quarter-million wellness visits by dog and cat owners.

They found that wellness testing had detected potential problems that dictated return visits in

• One in seven adult dogs and cats
• One in five senior dogs and cats
• Two in five geriatric dogs and cats

Emphasizing this type of data when touting the benefits of wellness plans could be more effective than talking about potential cost savings. The profitability rates of wellness plans depend at least in part on getting renewals, and if clients feel the program can detect problems early, they might be more inclined to re-up.

“That’s really where we focus when we work with our practices on how to get good renewal rates,” Richardson said. “You must say to pet owners, ‘This is how we really elongate the life of the pet, this is a lifetime way of giving the best healthcare to your pet.’ Then you tend to get good renewal.”

Alternative Payment Options

In today’s society, options are everything. Felsted said that giving clients a few different alternative ways to pay for veterinary care is a good thing. That includes pet insurance, which does not need to be a replacement for a wellness plan but rather can be a complementary offering.

“Ideally, practices offer more than one type of alternative payment plan because different plans cover different kinds of services and different clients want different things,” Felsted said. “For example, pet insurance and wellness plans often work very well together because the pet insurance will cover accidents and illness and the wellness plans, obviously, cover preventive care services. Having options is generally appealing to pet owners.”

Following 20 years in the corporate world—culminating with biotech giant Amgen in Southern California, where she worked in health outcomes—Sarah Ratliff and her husband bought an organic farm on the Caribbean island of Puerto Rico. Today, she feels fortunate to call herself a corporate America escapee turned eco-organic farmer, writer, and published book author.

 

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