Pet Lover Geek

Rethinking Pet Insurance

April 16, 2021 Lorien Clemens Season 6 Episode 6
Pet Lover Geek
Rethinking Pet Insurance
Show Notes Transcript

Navigating through the jungle that is insurance can be draining, but in this episode we will be talking with someone who is rethinking the way we pay for our pets' vet bills. Allen Kamrava is the founder of Eusoh, a community-based, peer-to-peer healthcare plan for pets. 

in today's episode, Allen and Lorien discuss the current landscape of pet healthcare, where it went wrong, and how his company offers a solution. Allen is a surgeon and he believes like many others that modern day insurance is outdated and price-inflated. Tune in to learn more!

00:00 Lorien Clemens

Hey pet lovers, welcome to Pet Lover Geek powered by PetHub. I'm Lorien Clemons and today we're talking about all things pet healthcare and paying for it. You know, we all know that getting healthcare and then insurance for our pets can be a daunting experience, especially because of how expensive it can be. So today we are going to be talking about a new, really exciting solution from our friends over at Eusoh. Now Eusoh is a community based, pet care payment service that uses peer to peer sharing to lower prices for everyone. So to learn more about this really exciting opportunity, we're going to be talking with the Founder and CEO of Eusoh, so stay tuned to hear our conversation in just a moment with Allen Kamrava after this quick break. 

00:48 Music

00:58 Lorien Clemens

OK, so let's dig right on in. I want to introduce Allen Kamrava. He is a surgeon, father, an entrepreneur who saw a big problem in the healthcare industry and how we pay for things, and he's been tackling this issue since he founded Eusoh in 2017, super excited to have you here with us today Allen.

01:18 Allen Kamrava

Oh my pleasure, glad to be here.

01:20 Lorien Clemens

Now I would like for you to kind of paint the picture of how this all happened, how this all came about because you didn't start in the pet industry, you actually are a surgeon of humans, so tell us about how that all got started.

01:31 Allen Kamrava

It happened by happenstance, no so my background is in health care. I'm a board certified colon-rectal surgeon who also loves, how operations are managed. I have an MBA and I've always enjoyed the back end of how things happen and actually when I applied for Business School for my personal statement, the point I had made was I was I knew I was going to be a surgeon but I said a surgeon without a scalpel is nonfunctional. You can't even pass go, but it's more than just the creation of scalpel. I was training at Upenn and I was in Philly but to get the scalpel to our hospital in Philly from Jersey there's an entire logistics network that goes in place to get that, and there's so much involved in terms of how we make an end product and people just realized end product anyway, so I've always loved to operations in logistics and that's where it all kind of came, I went into healthcare and got incredibly frustrated with what we're seeing, and I think most people are very well versed in how broken health care is in the US. And that led me into this kind of mission of trying to figure out if there's a better way that we can give coverage and financial protection to people you know.

02:36 Lorien Clemens

You know I think you're preaching to the choir--I don't know a single person in my life right now who isn't frustrated by the cost of it, so I'd love if you could chat and talk about like what was that ah ha moment that light bulb when you went you know maybe I could do this for the pet industry. Talk about that.

02:51 Allen Kamrava

Yeah, you know, so in full transparency it's less exciting in terms of how we ended up in pet than anything. When we founded Eusoh and I would say it's really we always push that because of how we do things. It doesn't give all the regulatory protections that insurance gets quote unquote so we don't get to call ourselves insurance because those aren't there, and so we're very honest, the front of our website says we are not insurance--this is a different way of trying to protect yourself. And my first year in this journey was all about human health care, and it really is one of the big things that we would like to do one day, but to take on human health care in the US. It's one of the largest industries. You need a lot of backing, and so we built out the model and we have some very large partners, but partners by name, not financially, and it was a discussion as in what is the right place to take this really unique model that you've built and prove that it will work and Pet became the really obvious decision because it has all the intricacies of health care. It is life and death, for many people their pets are their family. It is surgeries, there's opacity people don't know what things should cost when they go to the veterinarian. There are veterinarians just like there are physicians that abuse the model and if you go to them, they will run up charges. Not all, not all physicians do that, but they do, and so we thought it was the right analog to prove that the complexities of the model or the model fits the complexities of what you would need to be able to handle something to that, and so really it was our pilot and proving that we can really take technology as it is today and truly reintroduce a new model and a way for coverage that would save people significant money and ultimately build what we hope is a better ecosystem that controls costs in the long run, which was our principal goal.

04:33 Lorien Clemens

I gotta tell you, it's so unique to hear of a startup company that's coming in to the pet industry to you know--work on a unique problem that they're solving in the hopes of bringing it to the human space because we so often hear about that opposite thing where something is really working well in the human space and then finally after ten, fifteen, twenty years it comes into the pet space which always makes us feel a little bit behind with technology, so this is thrilling that this is being started in the pet industry, but I want to make sure that everybody's wrapping their minds around this and really understanding this isn't classic insurance like everybody thinks of it and this crowdfunding aspect to it that I want to make sure that people understand what's the difference between what you do at Eusoh and what a traditional pet insurance does?

05:17 Allen Kamrava

Yeah, it's multifaceted, and that's not to try to get out of the answer, so I'll try to get to the key ones that really wrap it up. The one thing I tell people to think of kind of if you frame the conversation is that all insurance, at its core, is crowdfunding. Not all crowdfunding is insurance, and I think that's key because people forget that insurance is genuinely one of the largest industries globally. It's a multi-trillion dollar industry and it's so large and there's such big corporations with so much power that we all forget that these Corps, the money that they used to pay for care. Is completely and fully their members funds. It's a crowdfunded company and rightfully likely was the first version of crowdfunding at a global level. So if were to look back historically. The first model of a global crowdfund was insurance, and I think that's a critical thing to remember that when they say, how can you afford this? Or how can you do this? Insurance is affording it by using crowdfunding already. They're only capable of doing what they do and to pay for because their members are paying these premiums on a monthly basis. The thing that was really critical that I was seeing in Healthcare is, it's very easy for us to say the models broken because the insurer's broken. It's a very easy and simplistic way for us to do it, but what I was seeing and I still see 'cause I still practice medicine doing a cancer surgery tomorrow is that, all the parties involved in the transaction of making somebody better and I am going to say transaction because it's how they treat it are corrupted. That is the providers, the physicians, and the corruption in the physicians is just breaking my heart, but it is true and it is real. The hospitals, the facilities, as well as patients believe it or not and so it is very common that at the end of the year when deductibles are resetting that patients will run to the doctors and say I don't need this, but my deductible has been met let's just do all these things. There's so many parts to that that doesn't make sense, and the reason that whole ecosystem exists like that is the premium model. The part that we missed is that when insurance started it was in the 1600s, just before the telephone existed and so there was no technology, there wasn't even a telephone for a company to say we're going to crowdfund across thousands of peoples for ships going to the colonies, it's literally how it started and if one of the ships goes down or we need to get money, how do we chase that? And they couldn't chase that they couldn't go in horse and carriage and find people to pay money and so the premium model where we pay money up front and they hold it in a fund made a lot of sense, but what it did is it broke the incentive structure and so basically, because insurers make their money as a percentage of total premiums, they have no incentive to control the cost to care, and that sums it all up; and so the model in healthcare and actually in veterinary care as well is made to incentivize major price inflations on a year after year basis. The American Veterinary Society estimated that in 2020 the cost at the vet went up over 9% the year before, 17% by some reports, and it's because the models aren't made to control price inflation because as prices inflate, premiums also inflate in direct proportion, and then the revenue for insurers is completely tied to that inflation because their revenue is truly are as a percentage of total premiums taken, and so what we wanted was how do I build something that allows us to take a flat rate to provide coverage and then make sure the cost of care are truly 100% cost for cost dollar for dollar with the cost of care are and in that way your incentives are realized. It's not going to be free, and it comes to partly why we can't be considered insurance, because insurance regulatory doesn't actually allow for that model, and so we have to do a lot of work in terms of how do we build this legally and be legal and provide an alternative means of coverage, but allows us to build an incentive structure that works to control the pricing over the long term to keep things affordable as we move forward versus what we're seeing in healthcare and starting to happen in veterinary care as well.

09:10 Lorien Clemens

I mean this is really exciting that you're trying to change the paradigm of the way people are thinking about.

09:14 Allen Kamrava

Yeah.

09:16 Lorien Clemens

The money part of it, but I'm not sure that I fully am grokking how Eusoh works and why it's different.

09:22 Allen Kamrava

Absolutely so and you're right I didn't go into that, so the base concept for us and going back to kind of what I said is in insurance we collect money upfront for something that may happen in the future, and if it does, they pay for it; but what we argued was that the technology now exists with Stripe and PayPal and Venmo to be able to bring people together online digitally and draw funds for them only on an as needed basis, and so to have a community that is available and 100% participatory, but only pull for them on a dollar per dollar basis for the actual amount of care needed and nothing more, and so one of the things that's confusing for our members is we have a variable price each month, we have a max, we promise everybody through actuary work will never take over a certain amount in any month, but we will only draw what is actually needed for that month's care and anything unused below that max is our members to keep. We don't take for it. We don't call in it later. It's for our members, and so whereas insurance we put money away for something that may happen in the future what we do at Eusoh is say these are the costs for March and we're going to divide that up between the community and draw, and then restart fresh for the next month going forward.

10:30 Lorien Clemens

Ok so I want to repeat back to you--or say back to you and I think I understand and make sure that that I'm grokking it, so I have this group that I belong to within Eusoh and we all pool our money together every month--there's a set amount of money that we all put in and at the end of the month we put in our receipts, Eusoh tallies it all up, gives everybody the reimbursements that they're supposed to get, and then if there's anything left over I get to keep that, is that basically how that works.

10:53 Allen Kamrava

Exactly.

10:53 Lorien Clemens

Ok, so I pay like what? 45 bucks a month or something like that and I'm never going to have to pay anymore because that's what you guys have told me is my top fee that I'm going to have to pay month to month. So it's not going to be like all of a sudden I have this big fee because somebody had some big bad thing happened to them and then I'm going to pay a ton more money.

11:11 Allen Kamrava

Yeah, you're getting it perfect--our cap is 48, but basically every part of it that you said is right, so it's 48 and anything unused below the cap is for our members--we never capped out in 2 1/2 years we've been live so every month there's been money going back to our users.

11:27 Lorien Clemens

Okay so I gotta ask because it seems to me that like if I had a young pet that you know doesn't have any medical issues, why would I want to do something like this? Because it seems like if I'm going to do it, I'm going to do it when I know I have a cat that's old or a dog that's old.

11:40 Allen Kamrava

Yeah, it's a reasonable question, and so there's multiplied parts that--one is, accidents happen in the unknown and when they do happen they're several thousand dollars when they do, and it's estimated that 70% of Americans can't afford a vet bill over 7 or $800. An economic euthanasia of dogs alone, we estimate about 2,000,000 dogs are put down at least per year, simply because their parents can afford to pay for the care because of an unexpected event, and so it does seem logically that most of your costs will come as the pet older, but a lot of these costs--I mean we have a one year old pet right now going through tremendous surgery, one years, and they are utilizing Eusoh to pay for those and it's thousands and thousands of dollars. So those things do happen. But there is also true to what you're saying, 98% of pet owners do not have a coverage mechanism in place for their pets, and it's because they've been burnt by insurance left and right--so many other forms of insurance are mandated on us and I'm not saying that that's bad, but it just is, and so we always joke that insurance is the ultimate grudge purchase. We know we have to get it, but we don't want to. So we have our car insurance so we could have our license. We have our medical insurance that we know we need to have, and it's this one, It's one of those, well, if we're talking about a few thousand, I'm going to see if I can wing it, and I get that it's a very reasonable way of looking at it. And I wouldn't challenge that as much as saying our goal with Eusoh is not that coverage can ever be free. There's still a cost, but that to our members it should be down to truly what the cost is, and not all this other fluff that goes on top of it.

13:12 Lorien Clemens

OK, so I'm going to relate this back to pet insurance 'cause that's what I'm familiar with, but like pet insurance, so every year it gets more and more expensive and I'm not ever sure exactly what's going to be covered in the you know the coverage changes year to year and I'm always like, is this going to be covered? Is this really worth it? And so before I even start paying into something like Eusoh I want to know like are these major things that I might need even though I have a healthy pet right now. Are they going to be covered or a couple of years from now after paying it and when I actually needed is the coverage not going to be there? So how do I know like what it does and doesn't do?

13:43 Allen Kamrava

Yeah, so what we've done is said, and it goes back to our kind of our principle core thesis. One was our incentives should not be aligned to cause cost inflation, and so the secondary part of that was, well how do we make sure that prices don't inflate and so what we've built in and at this part is still I would say V1/V2, but we have really, really beautiful plans in terms of how we're taking to the next level in the next year. We have a service guide that you could look up just about anything you could imagine to get it done at the vet, for a cat or dog, and it gives back to you the price that, on average, the actual Eusoh membership is paying, so it's not what we at Eusoh hope you would pay, but it is truly, what on average our membership across the board is paying, and we actually analyze that 90% of vets across the country, even in the most expensive cities, to the least expensive cities, fall within a bell curve. Believe it or not, and so that procedure guide or services guide tells our Members this is what the community is going to reimburse you for. If you get this procedure on, no questions asked, and it also says right off the bat, is it reimbursable or not? So there's no questions. If it says it's reimbursable on it, you will get the reimbursement with one exception. The only time we withhold reimbursement is when we have, and people try to do this. They try to join Eusoh knowing that they need to get leg surgery or cancer surgery and they say my animals perfectly healthy. I'm in and then two months later they drop $6000 charge, and we won't allow that because that's gaming the system and it's not fair to our users who join in good.

15:14 Lorien Clemens

Good Faith

15:16 Allen Kamrava

The words leaving me. But you know...in good faith, yeah. They join in good faith to say, you know, I'm in this, I'm part of the community. I have nothing I expect, but if it does, we're part of this, versus people who are joining only for the sake of offloading an expense. We've had one complaint with the Better Business Bureau, and it was found in our favor. You can search it, and what was amazing on that one was this gentleman had $6000 charge coming and on his veterinary note said he said he will go get insurance and then come back to do the procedure, and so there was no way out of it. 

15:42 Lorien Clemens

Oh my gosh, the cajones!

15:47 Allen Kamrava

Yeah so it was very simple.

15:50 Lorien Clemens

How does Eusoh help protect the community from that because I mean I'm sure people come in--they probably know if their pet has a condition or not, but what kind of screening do you do ahead of time to make sure that you're protecting the other members from that kind of pre-existing condition? I mean, obviously there are some things that you don't know, they're underlying and you have no idea and they present, but how do you screen?

16:10 Allen Kamrava

So we do it by the condition rather than by the pet, and so if a member joins we do require them to say what is known. What do you know your pet is already? You know, we're here for the unexpected. If you know about something and you joined later, unfortunately that ones on you, but everything else, you may have arthritis issues with your pet, but that doesn't mean you know about a cancer that may come later, and they're unrelated having a TPLO surgery has nothing to do with a mass cell issue that could come later, and why having a TPLO should offset your ability to potentially get help with those, we don't believe in that, and so as long as our members say look, I know about somebody who joined last night, my dog has allergies, anything related to allergies on me, but there's nothing else going on with my pet. I'd like to get coverage. We're fine with that.

16:54 Lorien Clemens

I think that's so exciting and refreshing to hear that a pre-existing condition doesn't mean that the animal can't get coverage or that the coverage is going to be exorbitantly expensive and cost prohibitive--because I had a cat that I rescued years and years ago who has tested positive for feline leukemia and I couldn't get any coverage, and it was so frustrating 'cause otherwise he was completely healthy.

17:13 Allen Kamrava

It's hard

17:14 Lorien Clemens

Yeah, and he lived to 21.

17:15 Allen Kamrava

Wow.

17:15 Lorien Clemens

Never had a single issue other than the feline leukemia, and it was frustrating because I wanted to be able to get pet insurance to cover other things, but I couldn't, and I think too about how stuck pet parents like me feel when they do have pet insurance and then something happens now becomes a pre-existing condition and then I can't get a different insurance

17:35 Allen Kamrava

Yeah.

17:36 Lorien Clemens

If I feel the need for whatever reason because of that pre-existing condition, and if I switch, if I switch then it wont be covered now with the new pet insurance, so I'm held hostage by all these regulations and rules and I feel like I can shop around for new options because they're not staying at the rate that I started with.

17:52 Allen Kamrava

No one ever stayed. Yeah, and I do say this, we have done this and because of how we're doing it, we do fall out of the insurance regulation and it's not because I don't want to be regulated, and it's not because I'm against regulation. What we learned very early on was the regulations rightfully so are there to protect the consumer. But because of them, it's impossible to reinvent the idea of insurance, because the moment you become insurance you have to follow the rubric, and so we had to take a full step out, do it properly and do diligently and then hope that if we succeed we can then have that conversation and say this is a model that should stay and what should we do to protect consumers in doing so? And so I do think that will be in our future, but as it stands now, we're in all 50 States and that conversation is something that will come when it comes.

18:40 Lorien Clemens

Alright so I know that from my own experience of being in startup world, it's always challenging, I mean we have the issue when we first started with PetHub that, you know nobody really understood QR and how it worked, and smartphones were really just starting to take hold when we started in 2010, so I'm sure you have similar challenges with starting something that really is changing the paradigm. Can you talk a little bit about that?

19:04 Allen Kamrava

There's so many challenges. Oh, I could do probably a full series on it. One of the biggest challenges for us has been which one should we say? A big one for us has been in the mid 2000 teens. There was a lot of venture capital investing into the pet space, and a lot of it didn't do well. And so when we came out, venture capital funds had essentially dried up to support anything pet. For the most part, there's always exceptions like modern health. That being said, the other part is because of what we're doing is so complex and it really is. We really spent a solid year on legal regulatory due diligence. I went to the Capitol building and sat in congressional offices. We presented our model to federal and state regulators before we started our first line of code, and that's through and through true. We wanted to do it right, and to make sure our members are whole, which they have been. But because of that, venture capital money likes very simple one and done products like Twitter. Not to put it down. It's just a simple case--easy thing. This is a full model and to do that the buy-in has been less and the other is to get awareness. As I said, 98% of parents have rejected pet insurance, and so to take a populace that is already not so happy about the idea of coverage and say, hey by the way we've done it differently and get them to listen is also been a challenge, and so for us the big challenge for us facing us today is growth. We have several. We actually have 15,000 member/users on the site, but we need more, and so we're pushing everything to get more, and really because the next steps for Eusoh on the investment side, which we critically need to be able to grow this the way we need. They want to see that we can get membership in a way that there's buy in from the community at large.

20:47 Lorien Clemens

So something that I don't really know what the answer is to this because I don't see it in the pet industry, but I know that in the human insurance realm you can have your standard primary insurance, and then you might have a supplementary insurance. Is there something that Eusoh could fit that model for the pet world? Or is it just a standalone thing.

21:05 Allen Kamrava

You can I just don't know if it'd be fair for you, because you may be double paying for things. So we don't have an exclusion to it, but I just I worry that it will just be not fair for you...cost wise.

21:17 Lorien Clemens

Sure, no that totally makes sense. Ok so I've listened to what you had to say today and I'm like wow, this is really super cool. What do I do? Do I just have to go to Eusoh.com and sign up and then 48 bucks and I'm done? I mean how does that all work to get started?

21:29 Allen Kamrava

Yeah so joining is very simple, it's just Eusoh.com. We spell it like Europe. So it's EU for you, EUSOH at EU S-O-H.com and you could register, and biggest thing for us is just getting awareness out there, and actually any person you know, especially in the gig economy that wants to help build awareness, were willing to, you know, give referral fees to do so. And so there's that program there as well. And that's where our big thing right now is just building awareness and showing that this model can work. To date, and these numbers, they over achieved what we'd even hoped for. We were hoping for a 30% savings. The savings are easily 50% month over month against any like-compared plan, and it has to do with just the way our community is being better actors. We reiterate to all our members, you're getting funds from other people. Be smart about how you're spending that, it's not just a big corporation you're drawing from. Every penny, every dollar comes from membership in terms of cost to care.

22:23 Lorien Clemens

Wow, that's really awesome. You know thank you so much Allen for being on the show today. It's really cool to see really innovative startups like Eusoh out there, and I know that probably like just scratching the surface here. If you want to take a couple seconds here to talk about that future of Eusoh, any last things that you want to help us learn about what's in the future for you guys, I'd love for you to share that.

22:45 Allen Kamrava

Yeah, there's so much. But yeah, I appreciate this. There, you know we do. For us pet is really the beginning. We want to grow this to be the new model for what we really believe is where coverage goes. I always tell people as we get into very deep conversations, is the way technology has been changing massive industries. The unifying thing across those industries is their industries that connect strangers to micro transact. For a quick moment, so be it in a taxi cab to Uber or a hotel room to somebody's house or even on Amazon, you're buying from random people. You're not really buying from Amazon, they're just shipping, and insurance was the ultimate of that. It is thousands of strangers sharing on costs as it is now. And what we're arguing is that all the tech is there now to make that relationship better. Just as Uber has and Airbnb has and everything else has in terms of how strangers are able to work together to make themselves whole.

23:36 Lorien Clemens

Yeah, I think there's a lot of really exciting aspects to share economy and that you're bringing it to the pet industry is even more exciting, and unfortunately that wraps up the time that we have today on the show. I'm sure we could talk a lot more about all these things, so thanks again Allen for joining us here today and everybody who is listening today. I am sure you're super interested in learning more about Eusoh so make sure to head on over to their website. It's EUSOH.com, Eusoh.com and I'm super excited to bring stuff like this to our Pet Lover Geek audience. So thank you so much for listening. Hopefully you found a solution or an answer to some of your questions that you had about paying for pet health care in today's episode. At the very least, you learn about some really exciting things that are happening out there, and if you have any topics or companies, products, pet tech news, anything geeky that you want us to explore here on Pet Lover Geek. Remember, you can always send us a shout out on social media, find us @PetLoverGeek on Facebook, Instagram or Twitter and you know just drop us a line. We'd love to hear from you and hear what you want to hear more about. So you've been listening to Pet Lover Geek. I'm Lorien Clemens, this is powered by PetHub, and have a "Paw"some rest of your day.

24:45 Music