5 case studies of prepaid wellness plans

5 case studies of prepaid wellness plans

See how these forward-thinking practice owners and managers turn installments into pet health
Jan 01, 2012

If the cost of wellness care keeps pet owners away from veterinarians, then prepaid preventive plans may be the answer to bringing them back. But offering these plans isn't a good idea if you don't first answer some important questions:

> How can you ensure you're paid each month by clients using the plans?

> What will you charge?

> What should you include?

> How will the plans affect doctors who receive production-based pay?

To find answers, I spoke to five veterinary practitioners and managers who offer prepaid preventive health care plans. And they each shared their insight on implementing these plans in practice.

Karl Salzsieder, DVM, JD
Practice owner, Yelm Veterinary Hospital Yelm, Wash.

1 Salzsieder lays claim to one of the longest-running prepaid veterinary plans in the country. He's offered prepaid plans for more than a decade, and he's surprised the plans didn't become popular sooner.

Salzsieder began offering the plans out of necessity. His first practice was in a blue-collar community, and people didn't have a lot of money to spend on their pets. He was frustrated when clients didn't return for rechecks or to finish vaccination programs. That's when he hit on the idea of letting them pay for pets' care in installments.

He offered the prepaid plan to puppies and kittens first. Fifteen years ago, corporate practices started offering similar plans for all pets, and Salszieder thought, why not?

He did market research and cost analysis before setting up the adult pet plans. He made the plans affordable. Most clients, he figured, could afford monthly payments of $35 to $45. The plans included discounted services by 50 percent and didn't include products, except for vaccines.

Today, Salzsieder offers unlimited exams under his plans and says his clients rarely abuse it. Those with plans make appointments for pets when they should, because they know that no matter what else they need, the exam's already paid for.

"The staff members love the plans almost as much as the clients do," Salzsieder says. "They see that people do more for their pets than they would otherwise, and they know that the plans save clients money."

The practice promotes the prepaid plans with indoor signs, and staff members are happy to talk about the plans. He's learned that high-pressure selling turns clients off, so he encourages colleagues to give them at least 18 months to catch on.

When it comes to payment, Salzsieder doesn't accept credit cards—except for the first payment. After that clients pay by checks or debit cards. Income generated by the wellness plan is managed in a separate account; transfers are made to the hospital account each time the plan is used. This makes tracking easy, he says, and clients get a fully detailed receipt for their bill, showing zero charges for the things included in their plan. The method reinforces the value of the plans in clients' minds.

More than 10 percent of his clients have opted into the plans, and the renewal rate on the plans is better than 80 percent. On average, the practice sees clients on wellness plans three times a year. Doctors don't get paid for the plan exams, but they get commission on any other work they do. They receive full commission on work not included in the plans and commission on 50 percent of the value of the work done under the plans.

Most of all, Salzsieder likes that the plans help clients say yes to preventive care and helps the hospital offset slower seasons. It's an opportunity to call clients to remind them to use their plans, and that builds goodwill and better patient care.