Medivet – Panorama controversy: are pet insurance customers paying for ‘crooked’ vets?

BBC’s Panorama investigation ‘It Shouldn’t Happen At A Vet’s’ finally aired tonight. It blamed Medivet for malpractice, dishonesty and breaching RCVS rules. Besides the shocking and unpleasant footage of mistreated pets, I wanted to specifically address the issue of inflated vet bills and the impact this has on pet insurance premiums paid by pet owners.

The facts revealed by Panorama – discussed

The programme revealed that it can costs as much as £20,000 to own a dog during its lifetime, £15,000 for a cat. This may come to a shock to future  pet owners but not current pet owners themselves: food, accessories, vaccinations, boosters, boarding fees, insurance etc… There are a lot of expenses linked to owning a pet.

Veterinary bills have trebled in the last 10 years. Having worked in the pet insurance industry before, I can confirm that veterinary inflation runs between 8 and 10% per year. This ongoing increase is what’s driving pet insurance premiums up each year: because it costs more to treat, companies need to collect more money from customers in order to make enough money.

Why are vet bills rocketing like this? The common agreement is that veterinary medicine has been developing and improving at an outstanding pace, now making it easier to treat more complex conditions. New techniques and machines are available but at a significant price. There is another theory however.

Do vets inflate bills when customers have pet insurance?

Some vets do indeed inflate bills when they know that their client has pet insurance. How do they know? Well, it’s one of the first questions they ask when you walk through the door. In Panorama’s programme, we saw Medivet vets do the following:

• First ask a pet owner whether they have insurance, then conduct all the tests they could for a cat that suffered from a very common urinary infection. Expected normal cost: £75. Charged by Medivet: £815, more than 10 times the normal price.
• A Medivet employee injured a dog’s paw while in care and then called the owner to say they will keep the dog overnight and recommend a cream is bought to treat the laceration.
• A dog suffering from diabetes was diagnosed with 3 seperate conditions: diabetes, cystitis and a liver conditon. This was filed as 3 different claims to Tesco pet insurance, therefore allowing Medivet to claim 3 times the amount they should normally be able to claim on a condition. I suspect that this dog’s owner was insured with Tesco’s Standard policy which covers each specific condition up to £2,500. By claiming for 3 conditions, Medivet was able to claim up to £7,500 instead of £2,500.
• Other vets bulked up bills by adding items they never used, like using a monitor or charging £347 for a blood transfusion of half a pack of blood.

All of the above do really happen at vets’ – and not only Medivet. When I was working in pet insurance, the claim assessors sometimes had to call vets and query bills. In some occasions they were simply told to sod off: “How dare you tell me how I should treat this pet?“.

Inflated vet bills is a serious problem for the pet insurance industry as companies often struggle to keep premiums affordable and profits high enough to justify business.

So how does this impact my premium?

Pet insurance companies exist to make a profit. They balance the risk of paying out claims with the advantage of collecting premiums from customers. In technical term, this is known as the ‘loss ratio‘: total claims paid / total premiums received. If the loss ratio is under 100%, the underwriter makes money.

Each year, when claims increase due to rocketing vet bills, companies have to increase premiums as well, therefore passing on the burden to customers. If this continues, there will be a time when pet insurance premiums simply won’t be affordable anymore and you’ll be left to pay for expensive vet bills yourself.

What next?

Luckily, affordable pet insurance is still available but many insurers have now reacted to vet inflation by adding a % excess to their policies, especially if you have an older pet. This means that if you need to make a claim, you’ll have to pay a fixed excess and a percentage of the rest of the bill before being reimbursed.

This is likely to spread to most pet insurance policies in the UK, so I would advise you take out cover as soon as you can.