Examining the rising cost of equine health insurance

The topic of rising healthcare costs and concerns about who will pay has dominated recent social, economic and political discussions. The veterinary field is not immune to similar concerns, and the rising cost of equine health insurance is emerging as a significant problem.

Why is the cost of insurance rising?

Advances in technology such as nuclear scintigraphy, magnetic resonance imaging (MRI), digital radiography and ultrasonography now offer clinicians many newer, more sophisticated modalities to choose from when pursuing a diagnosis. Advances in surgery and medicine—including the rapidly expanding field of regenerative medicine—provide an ever-expanding number of treatment options as well. Colic surgery is offered at many more clinics nationwide. Treatments such as stem cell injections, platelet-rich plasma therapy, tiludronate injections, shock wave therapy, thermography and others are all more readily available and increasingly used. These positive advances and options in equine veterinary healthcare should be a plus for horses and their owners, but it is precisely this increased level of care that is being blamed for the rising cost of equine insurance.

Increased levels of claims and increased costs of treatment are largely responsible for the ever-increasing premiums for horse insurance, according to the KBIS Guide to Riding and Sport Horse Insurance. KBIS is one of the leading equine healthcare providers in Britain. Cornish Mutual, another major British equine insurance agency, agrees and cautions that "veterinary treatment fees are pushing up the price of horse insurance premiums with the increases well ahead of the retail price index (RPI) at approximately 7 percent per year." Similar concerns are being voiced in equine communities worldwide, with some countries feeling like the increases are nearly out of control. According the KBIS guide, the veterinary fees often exceed the value of the horse.

Client demand as a factor

While no one questions that veterinary fees for equine health care are increasing, the reasons are multifactorial, and some practitioners, such as Doug Thal, DVM, Dipl. ABVP, of Thal Equine LLC in Santa Fe, N.M., thinks it is time that this issue is fairly addressed.

"Any service provided by modern and well-equipped equine veterinarians is costly," says Thal. He further explains that it is clients who have led the way toward increased offerings of veterinary diagnostic and treatment options, but it is these same clients who often seem uncomfortable with the reality of what that care costs.

"The trend toward specialization and expensive services in private practice is driven, to a great extent, by better-informed horse owners who demand the best healthcare for their horses," Thal says. These specialty equine practices require costly equipment, facilities and support staff.

Alan Goddard, managing director of Cornish Mutual Insurance Company, also acknowledges the increased level of care now available for horses and directly links this care to increasing insurance premiums.

"We are seeing a definite rise in the cost of treating a horse for lameness or injury," Goddard says. "Improved techniques and equipment mean that horses can get the very best treatment, but of course that comes at a high cost—bills often run into thousands of pounds."

The average cost of an insurance claim in Britain, including veterinary fees for treating an ill or injured horse, is about the equivalent of $2,325 U.S. dollars, according to the British Equestrian Trade Association.

"There are top-class referral centers, equine hospitals and universities available now for the treatment of horses," Goddard says. "And while some costs have come down because surgical procedures and equipment are becoming more common, an MRI scan of one limb, for example, can still cost between 600 to 800 pounds ($900 to $1,250), and colic surgery will cost in excess of 3,000 pounds ($4,500)."

A need to cover overhead

Thal, presenting the veterinary point of view on these prices, counters with an explanation from Economics 101. "As for any small business," he says, "the basic operating cost of doing business (overhead) is high for veterinary practice and continues to increase. Equine veterinary practice has especially high overhead. A relatively large inventory, higher rates of liability insurance, utility expenses for complex practices, fuel for mobile service, specialized staffing and all other costs are high and continue to increase.

"Additionally," Thal says, "dedicated, highly trained equine professionals are hard to find, and they demand higher wages for their higher level of training, commitment and professionalism."

These increasing costs are passed on to the consumer—in this case the horse owner—who passes them on to the insurance companies who, in turn, increase their fees.

It is interesting to note that one particular area of equine healthcare is far and away more responsible for increasing insurance costs than all others, and it is in this area that some changes may be made that might help halt the current cost increases.

The high cost of lameness

Even though colic may be the No. 1 cause of death in horses, according to the KBIS Guide to Riding and Sport Horse Insurance, most insurance claims are for lameness. In these lameness claims, 80 percent of the cost is for diagnosis, not treatment. Some feel that equine veterinarians now spend a disproportionate amount of time, effort and their clients' money obtaining a diagnosis. These individuals argue that many forms of lameness, regardless of diagnosis, will have no specific treatment other than rest and reevaluation and that the overuse of high-tech, expensive diagnostic tests is driving up insurance costs.

Veterinary schools are also coming under fire because of the change in protocol for lameness diagnosis that has occurred over the last 10 to 15 years. Students are so exposed to high-tech equipment, goes the argument, that the "art" of working up a lameness is disappearing. Rather than an "old-school" stepwise series of nerve and joint blocks that accurately localize the problem, many new graduates may do one or two blocks and then refer the horse for a more expensive diagnostic test. Critics feel that incomplete field work-ups, reliance on high-tech tests and pursuit of a diagnosis that often does not change the treatment or outcome is the source of current insurance issues.

Others, like Kent Allen, DVM, the chief veterinary services coordinator for the recent FEI World Cup Equestrian Games, disagree on some points. While complete and accurate field work-ups are increasingly necessary and agreed to by all, pursuit of a diagnosis still holds special purpose. "Absent a diagnosis, surgery is torture, medicine is poison and alternative therapy is witchcraft," is Allen's off-quoted mantra, meaning that a correct diagnosis is the first step in a scientific approach to any problem, and any attempts at accurate treatment leading to a successful outcome begin there.

Clinicians in this camp argue that potentially more treatment money may be spent and more performance time lost by attempting to manage a case without knowing what one is treating. These veterinarians also point out that while treatments and cures have not kept pace with diagnostics, that gap is closing because researchers are continually evaluating how certain treatments, medicines, procedures and techniques affect the outcome of cases.

These clinicians also argue that an accurate diagnosis must be made so that one can compare "apples to apples"—so that similar forms of lameness can be evaluated with differing treatments, eventually leading to the best way to return that horse to athletic function. Many equine veterinarians optimistically feel that the continued advance of good diagnostics leading to improved treatments—many involving the rapidly developing field of regenerative medicine—will ultimately improve success rates. Additionally, better, more accurate lameness diagnosis may lead to a better understanding of the causes of certain lameness. That information is crucial to developing better methods of prevention, which has been shown in other areas such as colic and infectious diseases to dramatically reduce cases and, ultimately, overall insurance costs.

An example of possible future cost savings

A case in point is the dramatic recent increase in the number and severity of cases of upper suspensory desmitis, especially of the hind legs in sport horses. Goddard reports that "claims of upper suspensory desmitis, particularly of the hind legs in dressage and show jumping horses, are becoming more common." It is not known why this particular condition has increased in number and severity. "It might be the way these horses are trained," says Goddard, "or that there is an increasing demand on these horses to perform."

Digital ultrasonography and MRI are high-tech, costly diagnostics being used to make this diagnosis. Tenotomy and fasciotomy are somewhat expensive procedures, along with stem cell and platelet-rich plasma therapy that are being used for treatment. Despite all of this, the prognosis for upper suspensory desmitis in the hind legs of sport horses remains guarded, depending upon severity, and, according to Goddard, "in many cases the injury responds well to surgery, but again, the overall cost of treatment will run into thousands of pounds."

Obtaining an accurate diagnosis in these cases may well shed light onto how these injuries occur—poor training, poor footing, fatigue, shoeing concerns—which will be a first and major step toward prevention and a significant contributor to reducing insurance claims and equine healthcare costs.

Dr. Marcella is an equine practitioner in Canton, Ga.