This post is sponsored by Eusoh and contains affiliate links*
Eusoh is a community health sharing plan that reimburses pet parents for veterinary expenses. Unlike traditional pet insurance, pet parents join groups and fund each other’s veterinary costs.
I’m a firm proponent of pet insurance. For me, the bottom line is that if you can’t afford an unexpected $1000 or $2000 for a medical emergency, or even more for a chronic serious illness, you owe it to yourself and your cats to consider options that will help you cover these expenses. I was intrigued with Eusoh’s business model and wanted to learn more about it. I had a chance to interview Eusoh founder, Dr. Allen Kamrava, and I think you’ll find this interview as fascinating as I did.
With graduate degrees in both medicine and business, Allen completed his fellowship in Colon and Rectal Surgery at the University of Pennsylvania and is teaching faculty in the department of surgery at Cedar Sinai. He has extensive management experience, having been acting VP at a multi-billion dollar real estate company and a consultant for an international risk-management consulting firm. He has published books, journals, and textbook chapters, and has spoken at several international conferences. His breadth of experience in health care and management provides him a uniquely well-rounded perspective on how to tackle the ccomplex field of insurance.
The name EUSOH is derived from the term “eusociality,” which is the highest level of social organization in nature, “an apt analogy to our system,” says Allen. Sociality is the degree to which individuals in an animal population tend to associate in social groups and form cooperative societies, and “eu” is an ancient Greek word for true or genuine.
Why did you start Eusoh? Please explain your vision.
I founded Eusoh as a physician jaded by the travails of patients in the US Health System. I wanted to build a model that puts patients first, and everything else second. We did it. Methodically. Quietly. Purposefully. And effectively. We went live for pet care in 2018, and our users are saving on average >50% against an insurance plan. It’s a unique platform that has been implemented by an equally remarkable team whose vision is serving those that the current system has neglected.
The inspiration for this comes from a clear need in the market and the growing power of community. The need is for a better, more affordable way for people to manage and share the unexpected expenses of life. The opportunity is for a new technology-driven platform that can tap the power of community and deliver this expense-sharing solution.
The need: Does the current model of risk-pooling and planning for large, unexpected expenses still work for today’s consumer? In the pet market alone, few pet owners (less than 2%) have bought into this traditional model of planning for larger, unexpected expenses. The lack of adoption of insurance in the veterinary market is emblematic of the system as a whole. In general, there is no “alternative” to insurance. It is a purchase that the majority of people begrudge. The system of risk-pooling that has been in place for many years is plagued with bureaucracy, insufficient transparency, high costs, little flexibility, and no accountability. Consumers are ready for a different approach.
The power of community: There is a growing expectation that community – whether it be a small group of friends or family or a broader network – is there to support or help one another. Crowdfunding, already a multi-billion dollar industry, is just one example of this change in consumer behavior. And increasingly, consumers trust each other more than brands. With so much noise in the marketplace, conflicting messages, and even the rise of “fake news”, consumers are far more apt to trust and rely on each other than a large organization, entity, or brand. How consumers can effectively, predictively, and fairly tap the power of community is what Eusoh is focused on.
How does Eusoh differ from traditional pet insurance?
Insurance finances risk on a prospective basis, with considerable administrative and regulatory costs to manage the fund of money it crowdfunds. The fund misaligns the insurers and the insured, by incentivizing insurers to grow the fund. The value proposition of insurance is scaling and diversification of risk, not maintaining a fund. The fund is an administrative function affording a promise-to-pay. Current technology solves this administrative burden, allowing a shift to retrospective loss-pooling instead of prospective risk-financing, obviating the need for the administrative fund. Instead of taking a percentage of losses, Eusoh’s revenue is fixed on a subscription basis, re-aligning our interests. Combining that with the behavioral savings realized by affinity-based digital communities, the total savings are significant. Our pilot in veterinary care is achieving consistent savings for our members..
How are monthly contributions determined?
The backbone of Eusoh is a fairly complex algorithm that runs the numbers between various members, affinity groups, and the wider membership in the system. It calculates averages based on the costs of the procedures and the members in the system. Overall, the take home to answer your question is that as a member’s costs are added into the system for reimbursement, Eusoh’s platform distributes the costs equitably through the membership so that members are paying small contributions to help each member.
How are payouts determined?
Eusoh maintains a database of average costs for common procedures and bases reimbursement of submitted costs on those averages. This database is continuously updated as our members submit expenses. The list covers most veterinary procedures and is accessible to all of our members so that they will always know beforehand what a reimbursement is before undertaking an expense.
One of the things that can make traditional pet insurance challenging for pet parents with older pets is that premiums increase with age, pre-existing conditions aren’t covered, and health history may determine premiums. How does EusohH handle these issues?
What we’ve done with Eusoh is have a universal pricing plan for our members. While this model may change with time, currently all our members share equally in the system regardless of age or breed. The reason we did this was equity. While some of the insurers are able to offer a slightly cheaper option the first year or two of pets’ lives, by age 3, Eusoh’s model outperforms all of them. By distributing it equally across the membership, it provides equity and affordability to all our members across all the years of their pets’ lives rather than just the first year or two.
We also believe that part of the pricing point you see for older pets by insurers is indeed economic discrimination paraded as “age-related” so as to be socially and regulatorily acceptable. Explained another way, the insurers raise the price of premiums so much that older pets are dropped from the policy at the time they’ll need it most. It’s just wrong and has been accepted as “normal” under a falsified premise that disadvantages all but the wealthiest pet parents.
Editor’s note: Eusoh does not cover pre-existing conditions. Please refer to Eusoh.com for more information.
What would you say to pet parents who are skeptical about your business model?
Remember that all insurance is crowdfunding, but not all crowdfunding is insurance. There is no model of insurance that is not based on crowdfunding. The very basis of insurance is based on the idea of collecting funds from lots and lots of strangers. The components we have changed are how to make crowdfunding work, but the core principle is the same. In the insurance model, the insurance company’s revenues are proportional to premiums, and so they have a vested interest to make sure the costs of services outpace inflation, as it will be directly linked to their revenue. Eusoh completely unlinked the two on purpose in order to ensure our interests do not compete with our members’ interests.
But more importantly, numerous studies have reported that only 7% of Americans trust insurance companies. 93% of Americans do NOT trust insurance companies. I’d say most people are already skeptical about the current insurance model, as is. It’s partly why I find this question, which we often get, somewhat oxymoronic. The need for change couldn’t be more clear.
Does Eusoh benefit veterinarians? If so, how?
Yes, absolutely. 98% of pet parents do not have financial coverage in place for their pets, and national studies show that over 70% of them can’t afford a vet bill over $1,000. Additional reports estimate that 2 million dogs are put down each year due to financial hardship for their pet parents.
The more pet parents that establish financial coverage for their furry loved ones, the fewer animals that are unnecessarily euthanized, and the better overall health of their family members as they will be more likely to see the vet as needed.
Increasing coverage will only increase the number of patients vets have and decrease the number of euthasias they will have to do each year.
Visit Eusoh.com for more information.
Coming next week: my review of Eusoh
*FTC Disclosure: This is a sponsored post, which means that I was compensated to feature this content. Regardless of payment received, you will only see products or services featured on this site that we’ve either used or would use ourselves. The Conscious Cat is a participant in Eusoh’s affiliate program. This means that if you decide to purchase through any of our links, we get a small commission.