The Nation - News from Aug. 4, 2002

Zachary has endured chemotherapy, five hip and knee operations, and gall bladder surgery.

He takes a daily diet of prescription drugs to combat nausea and other maladies, and gets intravenous fluids at night because of kidney failure.

“He’s going strong. Last July, you would have never thought he’d make it a couple more weeks,” said Donna Raichle, 54, who spends about $400 a month on Zachary’s care.

Zachary, by the way, is a 12-pound Yorkshire terrier.

His lengthy medical file may be one clue that the era of pet health insurance has arrived.

With advancements in veterinary care, more pets like Zachary can get high-tech -- and costly -- treatments ranging from chemotherapy to behavioral therapy.

And more owners like Raichle are seeking out the insurance that pays for it.

“Americans are in love with their pets, and ... they’re spending more on them,” said Jack Stephens, 55, a California veterinarian who founded the Veterinary Pet Insurance Co. in Brea in 1980.

After losing $18 million over 20 years, VPI turned its first profit last year, earning $1.3 million on $47 million in revenues. The company has 85% of the U.S. market.

“The economy helps, but what we find is it’s really the bond of the pet with the owner that’s driving our business,” Stephens said.

He launched the company, with financial backing from 900 veterinarians, after watching people put their pets down for mostly financial reasons. Stephens knew how to cure the animals, but the average person’s limit for pet care was about $250.

Today, the threshold is $900 and climbing, according to industry studies. Americans spend about $11.1 billion on veterinary medicine each year, according to the American Veterinary Medical Assn.

Some people will pay more than others.

One physician couple, whose German pointer was mauled by other dogs, ran up a $40,000 bill at the University of Pennsylvania’s veterinary hospital. After several surgeries, skin grafts and a weeks-long stay, the purebred hunting dog is back in action.

Cable TV shows about animals and veterinary care are making people more aware of the treatments available, according to Dr. Ken Drobatz, who directs Penn’s emergency veterinary service.

But only a small fraction of his customers -- and fewer than 1% of the nearly 60 million households with pets nationwide -- have pet insurance.

“We definitely get clients asking about it all the time. A lot of time, they’re asking after the fact,” Drobatz said.

Most insurance companies that have entered the business over the years have failed, but that may be changing.

VPI expects to take in $72 million this year.

Its policies range from $193 per year for standard coverage for a kitten to a $521 premium policy for a 10-year-old dog.

Raichle had pet insurance years ago for one of her first Yorkies, but felt that it didn’t pay most claims and dropped it.

Linda Marcus, who has also had several Yorkies, won’t be without it. VPI paid about half of the $3,500 to $5,000 in veterinary bills for her beloved Bandit in the six months before he died at age 15.

“This dog brought us so much pleasure that I would have done anything that money could have done to try to keep this dog alive,” said Marcus, 59, who sells real estate on Chicago’s Gold Coast.

That philosophy troubles some, including Arthur Caplan, chairman of Penn’s Department of Medical Ethics. He hears from people every day who don’t have health insurance for themselves.

“It’s sort of odd to think that a pet could get certain treatments in the United States that certain people could not afford,” Caplan said.

When his own collie was ill, he explained to his young son that it would be more humane to let the dog die.

Raichle said she’ll know when it’s time to let Zachary go.

“Zachary is a kissing machine,” she said. “When he stops kissing, that will be the time to say, ‘That’s it.’ ”