The changing face of insurance

Veterinarians often are requested to perform an examination for the purpose of helping clients obtain insurance for their horses. The specific examination and any additional procedures performed, such as radiographs or blood work, are determined by the particulars of the insurance policy and the specific company writing that policy. As with all veterinary procedures, the standard doctor-client relationship exists between the practitioner and the horse owner. That individual is essentially who the veterinarian is working for. But unlike all other veterinary procedures, an insurance examination places the veterinarian in a unique position because the practitioner is also working, in essence, for the insurance company. It is the veterinarian's additional responsibility to present an accurate medical picture of that horse to the insurance agent so that the insurance company can then make decisions as to risk and coverage.

An insurance examination can seem like a relatively simple procedure involving a check of the heart and lungs, temperature, eyes and legs. But it can be much more challenging as the veterinarian tries to adequately serve both his/her client and the interests of the insurance company.

If the insurance examination is performed as part of a pre-purchase evaluation, then a veterinarian can be faced with an unusual dilemma because exhaustive comments frequently are made about the faults and potential problems of a particular horse. The pre-purchase exam consists of uncovering any, and all, problems with a potential purchase, and then discussing with the buyer the manageability of these specific problems and their effect on the desired use of the horse. Many times the problems will have little to no effect on the suitability of a particular animal. Veterinarians must take a critical stance during this process, however, because the potential for legal problems is always there.

If a practitioner were to downplay the significance of a fault or defect, no matter how minor, and that fault later became a problem, then the veterinarian could face malpractice concerns. Consequently, most veterinarians are very thorough and generally over-cautious about their evaluations of horses for purchase. This same cautious evaluation provided to an insurance company might result in several "exclusions" where the company asserts that certain joints or parts of the body are not a worthwhile risk and therefore will not be covered by the policy. The veterinarian becomes caught in the middle; he or she might be unable to record and mention all the potential problems a horse has so the buyer goes into the deal with his or her eyes open without opening the door for those comments to be used to deny coverage, even if the problems are felt to be manageable. Trying to serve two clients adequately and ethically, often with different concerns, can prove difficult.

Full disclosure

The addition of new diagnostics and more-sensitive testing has complicated the equine insurance field further. Newer and often very expensive tests now are available to help the veterinarian arrive at a diagnosis. Because these tests often will be paid by equine insurance, veterinarians are under pressure to use these new diagnostics correctly and to justify their need in specific cases. The continual progression of serious equine diseases, such as equine protozoal myolitis, West Nile Virus, Lyme disease, Potomac horse fever and others that potentially can affect horses and involve the insurance companies can complicate the situation further. Veterinarians frequently are asked to screen for these diseases, even though testing is often inconclusive, and many insurance companies have differing policies regarding horses that have been affected and recovered from these conditions. All in all, the equine insurance examination, a seemingly simple procedure, can be a difficult and challenging exercise for veterinarians.

The opposite side of the coin can be challenging as well. Many of the equine insurance companies in business 10 years ago are no longer around, and according to Mary Anne Kean, head of mortality underwriting for Markel Insurance, "The equine insurance business is going through some changes."

The insurance companies that are still around want to write policies for their clients, but like veterinary practices and any other businesses, they must make decisions that will keep their doors open as well, Kean says.

"We try to be horse people first, and insurance people second," she says.

Medical/surgical coverage has become a larger and larger expense for insurance companies. The reason for this is threefold. More and more people now are accustomed to expecting high-quality medical and surgical aid for their horses and are requesting this help from their veterinarians, Kean says.

Veterinary research has developed many new drugs, tests, treatments and procedures that now are available to clients. The insurance companies must pick-up the cost of these new advancements.

Finally, horses now are living longer. William Harris, agent for the Harbins Equine Insurance Agency, says longer-lived horses result in companies paying out fewer death claims during the life of a policy compared to 10 years ago. But medical and surgical claims made during the average horse's lifetime have definitely increased.

Kean estimates that colic and non-surgical lameness now comprise up to 60 percent of the equine claims made. Because these lameness cases often include nuclear scintigraphy, and more recently computed axial tomography scans or magnetic resonance imaging, the overall costs incurred have increased dramatically, and insurance companies have had to increase their rates proportionately.

Timber in your eye

Unfortunately, veterinarians also might be contributing to the growing cost of non-surgical lameness treatment. Both Kean and Harris agree that the same degree of thoroughness in today's general lameness examinations does not exist.

"New tests have made it quicker and easier for some practitioners, especially more recent graduates, to simply observe the horse move, do a flexion test or two, and then send the horse off for expensive diagnostics," Harris says.

Less time and effort is delegated for localization of the problem and previously effective, but low-tech, diagnostic methods.

"I hope this tendency toward incomplete work-up and quick referral by some veterinarians does not continue," Kean adds.

Serious equine diseases are affecting insurance policies, too. Most companies depend on input from primary veterinary researchers, clinical studies and regional practitioners before specific policies are instituted. Each disease is evaluated individually, and specific exclusions may be made on a regional basis (such as with Potomac horse fever in certain states), on a breed or discipline basis (such as with Lyme disease in Morgans in New England) and specific vaccination protocols may be required as well (such as with West Nile virus). As new information is received and evaluated, policies may change.

"The goal is to reduce the number of death benefit payments and to make someone's decision easier to seek proper treatment for (his or her) horse," Harris says.

Insurance companies recognize the veterinarian's role in making this goal possible even though there might be times when that role is difficult. Better communication between veterinarians, insurance agents and underwriters can make this goal more easily attainable and might provide better, less-expensive policies for horses even as conditions in the world of equine insurance continue to change. This change ultimately would benefit veterinarians and the clients they serve.

For archived articles from this author, click on Equine/Marcella at www.dvmnews.com

Dr. Marcella, a 1983 graduate of Cornell University's veterinary college, was a professor of comparative medicine at the University of Virginia. His interests include muscle problems in sport horses, rehabilitation and other performance issues.