Veterinarian-Turned-Insurance-Pro Sees Practitioners Thriving But Stressed

The country’s veterinarians have weathered the pandemic better than many businesses. Many were able to keep their practices operating from early on and have not had to worry about lost income like restaurants, gyms and other business owners have.

Veterinary practices have been busier than ever since the early days of the pandemic. Many of them are doing very well financially.

But all that good news does not mean veterinarian practitioners have nothing to worry about. Nor has it stopped their insurance brokers from worrying about them.

Dr. Edward Branam, DVM, is concerned that veterinarians have been under increasing stress since early in the pandemic and currently are under more stress than they have ever been with increased workloads and staff shortages.

The stress is in addition to the usual business pressures and the bites, escaped animals, employee injuries or complaints about care that veterinarians may face in the normal course of operating.

Branam knows the veterinary medicine field. He is an internal medicine specialist. He did his residency at University of California at Davis, went to vet school at Michigan State, and practiced for a number of years until, as he puts it, he “went into the insurance gig.” He has his Certified Insurance Counselor designation.

Since 2001, he has managed the veterinary and animal services unit for Safehold Special Risk, which is a subsidiary of international insurance brokerage USI Insurance.

Officially, he is vice president and leader for the Veterinary and Animal Services Insurance National Program. Branam and his Safehold team provide veterinarians and veterinary hospitals with property and liability insurance and risk management including workers’ compensation, property liability, professional liability, business income and other coverages.

Being a veterinary doctor is reassuring to insurance clients. However, Branam jokes that he might do even better if he had a law degree. “I seem to be the first person they turn to whenever they have any kind of a liability related issue,” he offered.

Little Interruption

His clients made inquiries about business interruption insurance claims early in the pandemic when businesses were shut down. “The first thing they did was obviously reach out to us and ask us. We had some ‘uncomfortable conversations’ around it because our clients had no idea what to expect financially in the future,” he recalled.

The concern did not last.

Early court rulings upholding insurers’ policy exclusions for COVID-related income losses helped lower expectations, according to Branam. Also, the vet industry was declared an essential business early on, allowing them to reopen. That alleviated their concerns and those early conversations around business loss tailed off quickly and have not resurfaced.

“The majority of them, as they look back in 2020 and now 2021, have had record years. Loss of income really isn’t something that is top of mind to them,” Branam said. (An Insurance Journal search of the business interruption insurance litigation tracking database maintained by the University of Pennsylvania Law School turned up no cases involving veterinarians.)

According to Branam, for the first few weeks of the pandemic, “everything came to an almost screeching halt” for veterinary practices as they did for every other business. Many veterinarian practices only did emergency surgeries early on. “The practices were basically just doing triage, dealing with the most critical cases,” he said.

“But then very quickly, the floodgates opened,” beginning when veterinary practices were categorized as essential businesses and allowed to reopen.

There have been various media reports that Americans went on a pet adoption spree during the pandemic and that the demand for veterinarian services soared as a result.

Branam said his clients have told him their caseloads have “universally exceeded” what they have ever experienced and that a large percentage of the cases are from new pet owners.

The American Veterinary Medical Association, however, says that while veterinarians are busier than ever, it’s not necessarily because of a boom in pet adoptions. In fact, adoptions from animal shelters hit a five-year low in 2020, the group reported. AVMA Chief Economist Matt Salois told VIN News in early August that while new clients certainly contribute to the workload, the boost in activity has more to do with a backlog by existing clients, staff turnover and reduced productivity because of COVID protocols.

An industry tracker of more than 4,100 practices by AVMA and analytics from VetSuccess showed visits have been up 4.3% in the past year, while revenues were up 13%. Both dipped in January and then peaked in April of this year.

Branam believes that his clients’ stress levels are being driven not only by the expanding caseloads but also by the reduced productivity due to COVID-19 safety measures and chronic staff shortages across the industry

Implementing COVID-19 protocols and Occupational Safety and Health Administration guidance slowed the patient process, according to the veterinarian-turned-insurance-specialist. At first, practices were only letting clients come to their parking lots and then sending a staff member out to get the animals. More practices are now letting clients drop off their pets but then asking them to wait outside. This eliminates the need for a staff member in the parking lot but does not allow for communication with the client during the exam. Many are now again allowing clients back into exam rooms with their pets.

Branam says that on top of the COVID inconveniences and inefficiencies, adequate staffing has been and remains a “huge” challenge. “There’s obviously a shortage of veterinarians,” he said but the shortage also extends to licensed veterinary technicians, reception staff, kennel staff, and others. He said that the talent deficit existed before the pandemic but not to the degree he sees it now.

Job data from AVMA backs up the claim that the industry can’t find enough employees. AVMA found that the unemployment rate in the veterinary industry remained below 1% during the pandemic even while it soared as high as 15% nationally. Despite there being more job openings posted by vet practices in 2020, the unemployment rate for veterinarians did not change.

Branam maintains that every veterinary journal probably has at least one article about mental health, burnout or compassion fatigue as a major concern in the profession. “The bottom line is the caseload compared to the staffing levels, and overlaid with COVID, and the stress levels are extremely high in most practices,” he acknowledges.

He said as would be the case in any profession, the harder, longer and faster animal caregivers work, with fewer people to help, the “greater the chances of both errors and omissions, as well as injuries to either the patient and/or the staff.”

He said he has, in fact, seen a “mild uptick in the number of professional liability, the license offense claims,” and he is watching workers’ compensation closely.

He is also mindful that the current environment has the potential to foster employment practices liability claims, again because he sees his clients working longer hours with fewer people. He said employment practices liability premiums, as well as retentions, have been rising.

“In a small business where you just don’t have additional people, it becomes very easy to have oversights related to breaks and lunches and those types of things that then come back and create problems for you in the future,” he explained.

Cyber risk is becoming an issue within the veterinary industry as it is everywhere. “Vets are not immune to those pressures any more than any other small business or medium business,” he noted.

As a division of the large brokerage USI, Safehold has a cyber endorsement for its standard business owner’s policy and Banam’s team has access to other insurance and cybersecurity options for their veterinary clients.

Property Rates

Like many other insureds, Branam’s clients are dealing with rising property insurance premiums although he said they are not rising as fast for vets as they appear to be for other businesses.

There has also been pressure on professional liability pricing since COVID. But Branam said here, too, he hasn’t seen large hikes yet. “I anticipate rates to increase to some degree in the relatively near future. If not in 2021, certainly in 2022,” he added, noting these will be associated with the additional number of cases that clients are seeing every day.

Finally, he said the workers’ compensation market for the veterinary industry, for the most part, still seems to be “relatively” soft and holding its own.

“That’s a big surprise to me. I thought when certain states came out with mandates, that COVID claims were going to be considered workers’ comp claims unless it could unequivocally be proven to have originated somewhere else,” he said.

Asked if there is a lot of moving around of accounts among different programs or insurers these days, or if insureds are staying put, Branam answered that practitioners are so busy and short-staffed that unless they have had “some kind of negative experience” with their insurance broker or company, they don’t feel a need to change.

What’s more, they’re making money. “So there’s not that downward financial pressure to, ‘Hey, we have to cut somewhere.’ I don’t think at this point in time that’s really top of mind for a lot of them.”

Branam noted that he is handling more startups these days, including many new mobile practices.

“We have helped more young veterinarians get their first insurance policies for their launch of mobile practices, be it working out of the back of their car, pulling a trailer, getting a motor home, or whatever than I’ve seen in 20 years,” he said.

Also, he has seen more private practices being sold now than in the past 20 years. “I think it’s simply a fact that practice owners are having so much money thrown at them, that their financial advisors are basically telling them, ‘You’re out of your mind if you don’t take this.'” he figures.

When all is said and done, the year 2020 turned out to be a good one. “I have talked to many practices that had their best year ever, and not only new, but very established practices, in 2020,” Branam commented.

What’s more, it appears 2021 and years to come will be even better for many practices.

“It’s a huge growth industry,” he continued. “I’ve had colleagues tell me, ‘If you go out of business now, you would have to be trying.’ If you can’t make money with a veterinary practice, you better buy a tent and move to the desert.”