I’m going out on a limb here because I’m not sure how much you guys really care about inside-the-veterinary-profession issues, but I thought it’d be interesting to run this past you all, anyway.
Imagine the nation’s number-one association for doctors, the American Medical Association (AMA), is choosing one particular health insurance carrier for its membership’s benefits package. Its selection criteria, it explains, is based primarily on aligning with a “like-minded” company.
In other words, the AMA says its physician membership will best like this company best because its reimbursement philosophy is favorable to docs (i.e., it promises to pay doctors more for their services) or because it says it doesn’t like to involve itself in the docs’ medical decisions.
No problem, you say, this is an industry association and it invariably does what it thinks is best for its membership.
Fair enough. But how would you feel if the AMA elected to endorse one particular drug company, one particular medical device manufacturer, one particular medical supply company, or one particular home healthcare company––without strict selection criteria for why it should do so?
You might start to wonder what kind of money was changing hands, right? you might even wonder if your doc might be making medical decisions for you and your family based on dollars rather than what's best for you.
Call me cynical, but I have a problem when any large industry association starts picking favorites in any arena that’s immediately within its purview.
Sure, it’s fine for the AMA to select a malpractice insurance carrier for their membership (so they can all receive a better deal on lawyers) or a dental health insurance company (so they can all receive a better deal on dentists), but when it comes time to selecting a company within their sphere of daily activity (like a health insurance company), they have to be careful not to foster the appearance of impropriety.
In fact, that’s how the AMA and ADA (American Dental Association) handle it. They realize that it’s not cool to show favoritism to anyone inside their own industry. It looks bad, if nothing else. It starts to smell like money, bribes and all kinds of nasty things. And it doesn't allow for the kind of free market trade we Americans are so fond of. That’s why they stick to strict selection criteria (value-based) and rotate the companies every few years––so as not to foster the appearance of impropriety and financial malfeasance.
Apparently, that’s not the case when it comes to the AVMA (American Veterinary Medical Association) and pet health insurance.
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I’m a member of the AVMA. I pay more to this organization every year than I do to my AVMA-affiliated malpractice insurance carrier. I rely on the AVMA to make sure my health, malpractice, life and disability insurance offer me the lowest group rates possible for the best value. And now I have access to a group rate for pet health insurance, too.
Unfortunately, this pet health insurance carrier was not selected based on strict criteria for pet health insurance value. It was selected because the AVMA’s insurance arm says it has a philosophy that meshes well with the larger AVMA membership. So much for strict criteria. Moreover, the relationship is set for an undetermined period of time. Even more questionable.
Because the pet health insurance industry is young (at least in terms of consumer adoption), this decision by the AVMA’s group insurance arm (GHLIT) is tantamount to an endorsement of this one pet health insurance company at a time when such a nod has the ability to make the biggest difference in the future of the top industry players. In the eyes of the professionals who use the AVMA’s GHLIT and the AVMA membership as a whole, this pet insurance company has now effectively been labeled “the horse to bet on.”
We’d never allow the AVMA to pick one microchip company over another, select one flea and tick manufacturer over another or endorse one veterinary supply distributor over another––even if it meant we might get better deals from such an arrangement. Such an action simply flies in the face of fair market practices and just plain smells bad. So why is it OK when it comes to picking a pet health insurance carrier?
And now comes the part that’s hardest for me to take: the personal relationships between the players involved in the decision making. Here’s the deal.
Exhibit A: In comes the past Executive Vice President of the AVMA from 1996 through 2007. A bona fide veterinary industry muckety-muck by all accounts. We’ll call him Dr. X.
Exhibit B: Dr. X’s daughter runs the GHLIT (the AVMA’s group insurance arm). She secured this position during Dr. X's term in office. It was within her purview to make the deal with the pet health insurance company.
Exhibit C: Dr. X happens to be on the board of this pet health insurance carrier and (according to one close-to-the-action, non-pet insurance source) owns shares of this company and earns a lucrative consulting income in this capacity.
So how does the aroma grab you now?
Veterinarians who have paused to examine the facts are extremely unhappy about this relationship. It’s unfair. It tarnishes the profession, they say (and I agree wholeheartedly). But the vast majority of veterinarians aren’t aware of the deal. It’s the kind of un-sexy, non-medical kind of news most veterinarians aren’t exactly in tune with.
Amidst all this generalized unhappiness comes the claim that the AVMA and its group insurance arm (GHLIT) are separate entities (despite the fact that the board of the AVMA has the power to approve or reject this deal). And that Dr. X is no longer with the AVMA. Therefore there’s no impropriety.
Yeah...right...
As problematic as this situation is from start to finish, you’d think someone would expose this deal and we’d be done with the whole mess once and for all. Problem is, those most upset and alarmed about this relationship are the pet health insurance companies. And they know they have no clout in this fight. Crying foul may be the right thing to do, but it falls on deaf ears when it comes from those economically aggrieved by the competitive out-maneuvering. Sour grapes and all that.
To make matters even more complicated, those on the inside of the deal are powerful people no one wants to out. Sure, the relationship has the power to make the profession look bad. But let’s let sleeping dogs lie, now, shall we? No need to air our dirty laundry and so forth.
Hmmm...
While I was in business school I had a prof who was keen on ethics. Whenever shady things went down in the business world, he had a favorite bone he would toss out for all of us to chew on (and I paraphrase): Whenever you’re faced with a complex ethical question, no matter what it is, imagine that your actions will be reported on the front page of the Wall Street Journal under your glorious photo. Now what will you do?
That’s the question the AVMA should have asked itself before it voted to follow the GHLIT into this ethical morass. It still has the opportunity to do the right thing. But will it?
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<P>somehow, it seems Dr X. is not concerned about his glorious photo showing up on the front page of the WSJ. on the other hand, money in large quantities tends to have a blinding effect. </p><p>it is scarey to learn that an industry this large can manage to stay on the fringes of the collective social consciousness.</p><p>have practicing veterinarians changed the way the AVMA board did business in the past?</p><p>should i start lookking for veterinarians that are not members of the AVMA, in the interests of my wallet?</p>
eli May 8th, 2009 12:36:39 PM
man! you keep changing the rules!
eli May 8th, 2009 12:37:36 PM
I have a vague memory of another "deal" the AVMA made fairly recently, which involved a specific relationship with Hills and their incredibly low quality pet food products. I live in a state and an area where there are apparently NO continuing education requirements for vets, and where many seem to be perfectly happy spouting the same outdated stuff they learned 30 years previously. I happen to have both a diabetic and an epileptic cat. Feline diabetes, in particular, is a field where there has been enormous growth in knowledge and treatment in recent years. New insulins, new protocols, knowledge of nutrition and diet (and BOTH Purina and Hills have missed the nutrition boat - it's clear that they've decided that the profit motive is way more important than appropriate nutrition for obligate carnivores....) There are exciting things happening in FD, and the average vet (here, at least) has NO idea what's going on. New patients are put on huge quantities of Humulin N, told to feed Hills' high-carb MD or Purina DM - dry, frequently! - and are discouraged from hometesting. In-office curves, lack of information about rebound - it's all absolutely disgusting and totally unnecessary in the age of the computer.
The AVMA's deal-making "arm" somehow doesn't surprise me - although it's certainly disgusting. For the "good" vets, who do care and who do their own research (and who offer their own blogs!), there appears to be little or no incentive from the professional organization to provide the best or most up-to-date care. Being "represented" by an association that doesn't seem to feel the need to ensure that the most high quality standards are promulgated and encouraged must be very discouraging. Maybe you vets who are the Good Guys need to figure out a way to establish an alternative professional organization that will concern itself with the welfare of both veterinarians and clients and be less interested in enriching the existing power structure.
lynda and scruffy May 8th, 2009 12:38:03 PM
WooHoo Dr. K!!!! This deal doesn't pass the sniff test and it borders on supporting the establishment of a monopoly. The aggrieved parties (the other insurance companies) should scream loud and clear on this one. Even though I'm not a fan of pet insurance, this deal STINKS.
Dr. X gets his daughter a position at AVMA. His daughter gets him a deal. Can you say quid pro quo? In addition, this deal increases his wealth which his daughter will likely benefit from in the future. Self serving? Dr. X and his daughter have jumped on the gravy train and should be summarily tossed off. Dr. X is just plain wrong if he thinks this is appropriate; more so his daughter.
BTW, on your group malpractice, dental, etc., it used to be considered questionable to designate only one if there were multiples that could be offered and, with a group as large as AVMA, that should be the case on those as well. Why offer more than one? Because AVMA members should have an immediate option if the vendor they chose closes up shop or is involved in a scandal. Your premise is right on the mark. AVMA should set the criteria and approve all who meet it, allowing the membership choices amongst those who have met the criteria.
PJBoosinger May 8th, 2009 12:54:54 PM
"Elizabeth L. Wallace, the Trust's chief executive officer, is the daughter of Dr. Bruce W. Little, who became a member of the Pets Best board about half a year after stepping down as AVMA executive vice president in August 2007. Yet, Wallace joined GHLIT and Dr. Little joined Pets Best after discussions began with Aetn..." http://www.avma.org/onlnews/javma/sep08/x080915a.asp
AVMA, what, oh what, will you do if your "role model" turns out to be tarnished?
PJBoosinger May 8th, 2009 01:10:13 PM
Lynda, re:
"Feline diabetes, in particular, is a field where there has been enormous growth in knowledge and treatment in recent years. . . . . In-office curves, lack of information about rebound - it's all absolutely disgusting and totally unnecessary in the age of the computer."
I have to totally applaud you. The majority of vets are not current on treating feline diabetes. Putting cats on big doses of humulin N + dry prescription food + and not testing blood sugar at home = prescription for disaster. I am currently in touch with a woman whose vet has her cat on glipizide and RX food, gave up on insulin which was probably humulin N, and said if glipizide didn't do the trick the only thing left to do was euthanize the cat. ARRGGGHHH!!!!
Because feline diabetes is now such a common ailment, I do not believe that there is any excuse for any vet not to get up to date on it.
What could the AVMA do about that? Maybe they need to spend more time thinking about educating their practitioners and less time doing questionable business deals. Just underscores the impression that the priority is $$$$ not pet health.
Stefani May 8th, 2009 03:34:16 PM
While there may be an ethical issue here with plan choice, it is worth pointing out that offering one group insurance plan is really NOT the same thing as endorsing one microchip manufacturer. The benefit of group insurance is that the risk of bad outcomes is pooled over a large enough number of individuals to allow substantially lower premiums than what you would pay in the individual market (where there is no risk pooling so you pay based on your pet's expected future health costs). Presumably there are not enough members buying into this plan to feasibly allow the AVMA to offer multiple plan options (this would require multiple LARGE insurance pools). Perhaps the better thing would have been for AVMA's membership to vote on a plan, or to not offer one at all. But having this benefit available to members likely necessitates the choice of just one insurance company.
econ prof. May 8th, 2009 05:10:49 PM
econ prof, AVMA has 78,000 members with how many hundreds of thousands/millions of clients to whom insurance will be marketed?. That's enough to support more than one insurance pool IMO. It's a little like saying all Americans should be in a single health insurance pool. Yes, there are some economies of scale but enormous risks from such a de facto monopoly.
Arguably, it's worse than endorsing a single chip manufacturer (or at least a single protocol for chips and scanners) since a single chip/scanner system might ensure more pets make it "home" than multiple ones. See Dr. K's previous blog microchips, etc.
PJBoosinger May 8th, 2009 06:30:40 PM
econ prof: The reality is this: Veterinarians need health insurance. We need dental, even. But veterinarians can muddle through the selection process when it comes to their own pet health insurance needs. We don't need to risk a conflict of interest on the grounds that this benefit is a necessary part of our personal insurance profile. Furthermore, when the rules for selection are arbitrary (and I'm being kind), the membership is not best served.
Dr. Patty Khuly May 8th, 2009 07:26:07 PM
Caesar's wife principle. Even if the people concerned are doing nothing wrong, they need to be SEEN to be doing nothing wrong - you need to arrange matters so that not only is there no collusion/nepotism/bribery at work, even a casual glance sees nothing to IMPLY that there is collusion/nepotism/bribery at work. Even if the people concerned honestly believe that what they're doing is all above board and ethical (haha, say I), they need to take a big step backwards, look at this from the point of view of an outsider, and say "Ooooooh boy there's one big conflict of interest problem here..."
Mel Redcap May 8th, 2009 07:56:09 PM
Dr. Khuly, Bravo! Now, hopefully word will circle among the busy to provoke enough thought and action!
Mel Redcap: Would you consider putting that "exact" same comment on my today's blog post? It really is applicable, just different subject....:)
Barbara A. Albright/NH May 8th, 2009 09:35:12 PM
It's interesting to note the differences between how the AVMA and AAHA took on pet insurance. AAHA designed a seal of approval that is now available to (presumably) all qualifying pet insurance companies whose plans meet certain criteria. The particular criteria AAHA chose could be debated (as could their methodology, which did not include input from all pet insurance companies) but the outcome is at least objective and, I believe, a meaningful attempt at bridging the veterinary profession's needs and the pet insurance industry's desire for greater exposure.
AVMA took a different path, behind closed doors, and decided to single-source the whole kaboodle with no canvassing of the body of opinion either among veterinarians or among other pet insurance plans.
I think the AVMA could learn something from the AAHA in this instance.
Alex May 8th, 2009 10:15:08 PM
Dr. K, Sorry, gotta disagree on the "need" for dental insurance. The way we're doing dental insurance in the US has turned out to be a complete debacle. "study published in JADA in January 2009 exposes the negative impact insurance has had on the dental profession..." http://news.vin.com/VINNews.aspx?articleId=12490
Oddly, that's in an article discussing this soon to be debacle of pet health insurance. And putting this in the one form of pet insurance in the AVMA membership benefits package is just the trust's way of reinforcing their previous general endorsement. They know darn good and well how many clients ask "what would you do?" and "which insurance do you carry for your pets?"
I just reviewed the AVMA GHLIT website. Seriously??? That's all the trustee's have dug up for 78,000 members? You vets need to find some new trustees!
PJBoosinger May 9th, 2009 12:47:49 AM
Love the headline! Good blog post. These things need to see the light of day and be talked about.
Deanna May 9th, 2009 10:12:49 AM
surprise, surprise....business in bed with big business and nepotism to boot....all those really surprise ?..none...will anyone do the right thing?...are you kidding?....this is about MONEY.
LorriM May 9th, 2009 11:02:17 AM
One thought comes to mind Anti-Trust
Collusion and cartels comes in 2nd and 3rd.
Evet May 9th, 2009 11:02:33 AM
Anatomy of a _______ fill in the blank.
Collusion is an agreement, usually secretive, which occurs between two or more persons to deceive, mislead, or defraud others of their legal rights, or to obtain an objective forbidden by law typically involving fraud or gaining an unfair advantage. It is an agreement among firms to divide the market, set prices, or limit production. [1] It can involve "wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties."[2] All acts effected by collusion are considered void.[3]
Evet May 9th, 2009 11:05:45 AM
Perhaps the AVMA is an obsolete concept and it's time for some new entity to represent the next generation of Veterniarians.
Evet May 9th, 2009 11:16:02 AM
Evet,
I love your comment--yes, we all need a new concept, new entiry to match modern veterinarians' mentality and fresh ideas. AVMA is an outdated concept. . .
Fotini May 10th, 2009 01:20:47 AM
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