Alex Douzet, Co-Founder and CEO of Pumpkin® Pet Insurance, joins us to discuss the impact of pet insurance on client behaviors and the future of the pet industry. This week on the Cone of Shame Veterinary Podcast, Dr. Andy Roark and Alex Douzet dive into Pumpkin’s research with Zoetis revealing that Pumpkin-insured pets have more frequent vet visits and higher annual spending than uninsured pets. They explore the role of technology in veterinary practices, from digital check-ins to AI, and the potential benefits of corporate structures in enhancing clinic efficiency. Alex also shares insights from his Forbes article on emerging trends in pet healthcare. This episode is brought to you by Pumpkin Pet Insurance!
You can also listen to this episode on Apple Podcasts, Google Podcasts, Amazon Music, Soundcloud, YouTube or wherever you get your podcasts!
This episode is brought to you by Pumpkin Pet Insurance!
LINKS
Pumpkin Care for Veterinarians: https://www.pumpkin.care/for-veterinarians/
https://www.avma.org/javma-news/2021-09-01/insured-pets-received-more-care-more-frequently
Charming the Angry Client Course: https://drandyroark.com/charming-the-angry-client/
Dr. Andy Roark Swag: https://drandyroark.com/store/
All Links: linktr.ee/DrAndyRoark
ABOUT OUR GUEST
Alex Douzet is the co-founder and CEO of Pumpkin®, the highest-rated pet insurance provider on Google as of January 2024, and one of the fastest growing pet insurance and wellness brands in the U.S. Pumpkin’s mission is to enable all cats and dogs to live their healthiest lives by removing the economic barriers that can prevent pet owners from providing their pets with veterinary care.
Under Alex’s leadership, Pumpkin’s best-in-class insurance plans help make it easier for pet owners to provide their dogs and cats with advanced veterinary treatments, emergency care, and alternative or rehabilitative therapies if needed. Alex has also spearheaded a series of optional, non-insurance wellness products to help cover routine costs for essential preventive care, like vaccines and annual wellness visits.
Throughout his 20-year career as a serial entrepreneur, Alex has disrupted industries, scaled businesses, and built ‘people-first’ companies where employees grow and thrive. Prior to Pumpkin, he spent five years as CEO and Co-founder of Ollie, a next-gen, natural, and human-grade pet food brand. Alex is also a competitive Triathlete and an 11X Ironman finisher. He is proud to have two rescue dogs: Belle, a 13-year-old Shar Pei Golden Retriever mix and Simon, a 6-year-old Dachshund mix.
EPISODE TRANSCRIPT
Dr. Andy Roark: Welcome everybody to the Cone of Shame Veterinary podcast. I am your host, Dr. Andy Roark. Well, guys, I got a good one. Today, I am here with Alex Douzet . He is the CEO of Pumpkin. Alex is a tech entrepreneur, turned pet insurance CEO. He’s just got such an interesting perspective. I talked to him first about some research that Pumpkin put out with Zoetis on how they’re hoping to change the impact that having pet insurance has on pet owner behaviors at the vet clinic. We talk a bit about Pumpkin, what is different about, them and their perspective over there.
And then we get into talking about one of Alex’s articles that was on Forbes. And I, he was, it was sort of talking about trends that are arising in the pet industry. We talk about artificial intelligence. We talk about telemedicine briefly. We talk about Gen Z pet owners and their interest in technology.
And I got to tell you talking to a tech entrepreneur about young pet owners and what the future looks like for the way that we as veterinarians interact with those young pet owners. It’s it’s fascinating. Anyway, it was a great conversation. I think you guys will enjoy this episode. This episode is made possible by Pumpkin. Guys, let’s get into it.
Kelsey Beth Carpenter: (singing) This is your show. We’re glad you’re here. We want to help you in your veterinary career. Welcome to the Cone of Shame with Dr. Andy Roark.
Dr. Andy Roark: Welcome to the podcast Alex Douzet, how are you?
Alex Douzet: I’m doing well. Thanks for having me.
Dr. Andy Roark: Well, it’s it is a it is a pleasure for those who don’t know you. You are the CEO of Pumpkin Pet Insurance. I first became aware of Pumpkin , when Pumpkin published some research in the AVMA News. And so it was an AVMA News article that came out. And I, I, I liked it and I sort of grabbed right onto it.
So, it’s, it’s been sort of anecdotally known, I’ve talked about it for a long time, that pets with pet insurance are more likely to come into the vet than pets that don’t have pet insurance and pets coming in with pet insurance are more likely to agree for for the services that we are recommending. And, and the Pumpkin research that sort of came out through the AVMA really backed that up And so what what you guys sort of showed was that Insured pets had 65 percent more hospital visits compared to uninsured pets and that they had a 72 percent higher annual spend compared to uninsured pets.
And both of those things have made sense and they sort of carried out some of, some of the ideas I had and sort of, sort of things that I’d seen in practice. But the thing that I really liked about it is when I’ve seen other, research on this. There’s always a bit of a sampling problem, right? When we look at insured pets, there’s this idea, you know, when you say, well, pets with pet insurance are more likely to come in more often.
I say, well, yeah, but the pet owners who are the people who get pet insurance are also likely to be the owners who bring people or bring their pets in. And so I, I liked in this research you had same, you, you compared Pets before they had pet insurance to pets after yeah, so you guys found a 22 percent Increase in the number of visits after getting pet insurance and a 43 percent increase in it in spending after getting pet insurance And so that that same pets pre and post that was not something I hadn’t seen before but I I really liked it Were you surprised by these results as you saw them or was this is this kind of what you expected?
Alex Douzet: I would say it’s both, you know, little surprised, but also what we were expecting. Cause we look, we started the Pumpkin with that promise of like enabling the best care possible for vets, right? And maybe just to answer your question better, you know, we kind of have to go back to the founding story of Pumpkin because it’s a little bit unique story, right?
We were founded with the support of a company you might have heard of called Zoetis, right? Zoetis is this little company in animal health that
Dr. Andy Roark: They’re a boutique firm, I believe, yes.
Alex Douzet: Yeah, exactly. Like boutique very, very, very niche. Really wants to help their clients, the veterinarians, continue to do what they like to do, which is to save the life of pets, practice the best care possible.
And in 2018, 2019, when we started to think about the idea of doing pet insurance, we realized the pet insurance industry in the U.S. was relatively underpenetrated. Less than 2 percent of what we called medicalized pets. So, those are not just every pet in the U. S., but the ones that actually go see a vet.
Our estimation was about 100 million of the pets, right? There might be 165 million pets in the U. S., but like 100 million of them actually go see a vet at least like once every 18 to 24 months. Of those, only 2 percent had pet insurance. So we would look at that problem statement and say, what can we do to help that increase.
Because we’d seen market, more mature market, Sweden, the UK, with more than double digit penetration of pets with pet insurance. So what can we do? The idea came back to say, let’s create a pet insurance that is more pet centric, that is really focusing on enabling the best care possible. So to do that, you have to have great coverage.
You have to have like high annual limits, high reimbursement rates, but really, what you want to do is really partner and align with veterinarians to explain the value. I think one thing that we’d seen that was lacking in this country, unlike some European countries, was that the vet, as a community, was holding back from making a recommendation of the value of pet insurance.
So we figure like, okay we really need to like to do something there. And that’s where creating Pumpkin with the support of Zoetis made sense because what is in many cases is more than just pharmaceutical vendors to the vet industry. It’s really in many cases. We find them to be like the true partners to the veterinarians To practice better care so we then we figure okay, let’s we work together.
We create this great product. We can advocate a case, but we need to convince the community that it was a real benefit of pet insurance. We knew that pets with insurance will come more often, they’ll spend more, but we had to quantify this. And that’s where the story, the study you’re referring to came into place to really just prove the science behind it and say, hey, pets who have a great insurance product like Pumpkin will come more often. They’ll spend more with you, right?
Dr. Andy Roark: Yeah. Do you think that the way that vets talk about pet insurance in the States is the primary differentiator between the U. S. and the U.K.? So, I mean, I know that there’s been much greater uptake in other countries. Just sort of looking at it from your perspective, is it simply the way that vets in the states talk about pet insurance or are there other factors?
It seems like, I’ve always kind of imagined it’s more of a cultural, I don’t know if there’s some cultural component. What is your perspective?
Alex Douzet: I, I think there’s more than just one element. It’s, it’s a few elements. I think in the US you had a bit of a full start back in the days. I think the first real product that got some traction, you know, probably had some challenge from the product structure, the way it was structured and the way the reimbursement worked, and I think in many cases, it created what we call like a little bit of a buyer’s remorse. And that’s something that we spend a lot of time studying and really looked at, you know, it goes back to the DNA of the company and working with Zoetis and say, let’s make sure we do something that will never get the community to be upset. Right? And so we really looked at like, okay, why we need pet insurance and maybe the pet owners or customers, the veterinarians are just as important to us as the pet owners, right? It’s almost thinking about it like a two sided marketplace. Both sides need to be really happy with the equation. Otherwise, this work doesn’t takeoff. So we really focus on like creating a product that says there won’t be any kind of buyer’s remorse if the veterinarians makes a recommendation, advocate for the benefit of pet insurance. And say, look, this is a provider that we’ve had some good experience with. They deliver a good product, a good service. You should go check out pumpkin, right? That’s that’s how the experience works. So that’s I think important to also understand is like from our point of view from our research we looked at it, not every pet insurance is created equal And that’s actually a big part of what we do trying to work with the community and educating the community is like, don’t just advocate of like any pet insurance because like an insurance, you know, home insurance, car insurance, they are high end product and low end product, right?
And there’s no, what I would describe as like no magic math in insurance, meaning if something looks inexpensive, you get a quote for your dog or your cat. And you get a price that looks appealing, but low. It’s because the coverage is probably not that great. And that’s where this potential of buyer’s remorse exists, right?
Yeah, so so we were considering a developing pumpkin. With the goal in mind of like, really supporting the community enabling the best care possible. We had to look at all the scenarios and obviously looking at the situation where someone put hypothetically, you know, selecting a plan that is
more on the lower hand in terms of coverage and reimbursement rate, they are still situation that could occur where this person could be faced by a recommendation from the veterinarians for treatment and then start to look at the math and say, well, a lot of it may not be reimbursed, and they may say no to the care in this example, or even worse, they may not even think about it consciously, go ahead and do it, and have a bad surprise post filing the claim.
They look at what they got reimbursed, and it’s probably, there’s probably a disconnect with the expectation. And I think that’s the thing that we were really conscious about that. Potentially, ultimately put us on the path to say the only way to solve for this is to create a more premium product with better coverage, higher, more generous annual limit, more generous reimbursement rate because we will avoid those situation and it ultimately prevent the buyer’s remorse and it will protect the community from having to deal with this.
And I think as a result, what we’ve seen over the past few years is that we get very strong reviews. I think when you, we Google for Pumpkin and you look at consumer reviews, you tend to see like very, very positive reviews. We get a lot of like positive comment and feedback from the clinics that we’ve been able to partner with and train them on the concept of an insurance and what we do particularly at Pumpkin.
Dr. Andy Roark: Yeah. You, you’ve got an article that came out earlier this year. It’s called Five Emerging Trends in Pet Healthcare for 2024 and Beyond. And I, and I, this is where I, I became aware of you. It’s, it’s, it’s good article. And so you’ve, you’ve got sort of five trends where you’re looking at the, at the sort of the pet health space.
And before I start, I want to ask you about a couple of them. But before I do, can you sort of lay out for me, like looking in your crystal ball in broad strokes, where do you sort of see the pet industry going in general? I mean, you talk in the article about a number of the forces that are sort of arising and converging.
Lay, lay that out for me, if you don’t mind.
Alex Douzet: Yeah. And to be honest for that, actually, I may have to like, take a step back of like how I got into this space cause my background 20 years ago was not in animal health. I’m a technology entrepreneur. My first company was a marketplace for jobs. You know, I was competing with the likes of the LinkedIn and of the world.
And I got into animal health through the first entry. My first entry was pet food. So in 2015, I came up with an idea for next gen of pet food product. Ultimately, the company and it like being called Ollie so human grade fresh product is only for dog that is custom tailored to their weight and attributes.
And it’s a point that we ship to people’s home, right? That’s how I got to learn this entire industry. The reason why I got into this is for two reasons. One because of my dog. My dog was the the inspiration. She was having some issue and I went to see a Veterinarian who educated me about the challenge I was facing with my dog and essentially what I learned there and gave me the inspiration to create that company the second thing is, was really really convincing because initially to be totally frank as an entrepreneur.
I was like I have no business being in this industry. Like, what do I know about pet food and manufacturing food? And so I was kind of like, am I over my skis here? Like, this is maybe a little bit too much, or maybe I shouldn’t go there. But ultimately what convinced me to do this was the secular trend.
The fact that the bond that exists between pet owners and pets is only getting stronger and stronger. You know, other people call that like the humanization of pets. And ultimately, what that translates into is the fact that over the last 10, 15 years, what we’ve seen is not every pet owner, but a strong group of pet owners and more and more of them are coming to market
are willing to invest in the care for their pet because they want to extend their life and the relationship that they have with their pets. And that is ultimately what I would call the secular trend that makes a product initially when I was in pet food work and succeed because again I was creating a premium product so you needed people to willing to pay for this to deliver a better experience for their pets.
And then ultimately in 2019 when I started to look at the pet insurance. I realize those trend applied as well to veterinary care and therefore pet insurance, right? And I think, you know, one thing I saw before 2014, the inflation rate, you know, what’s also called the vet CPI was pretty much 0 percent between like 2006 and 2014.
And then between 2014 and 2021, when we got it through covid It was on average 6%, so 3x the standard inflation. Since COVID, we see the inflation being at like 8, 9, sometimes 10%. So that creates a worry for a lot of people because like, hey, will the average consumer be able to continue to afford medicine?
And you have this force conflicting because you have more and more people adopting pets. Pets are taking a bigger part of our life. The good news is you have more and more people willing to invest in the care and are saying yes to new treatments or high end treatments. But at the same token, the overall cost is rising.
So this is creating creating like conflicting thoughts. And, and that’s where I decided to say, you know, it may be good for me to like write the story and, and try to do this like every year. You know, at the beginning of the year, like refreshing, like. What are my five year visions or what are the key trends that I see emerging?
Because one of the challenges that I see right now Because I, I go myself to a lot of clinics, you know, we have we have things that we partner all across the U. S. and I try to make sure I visit some of those clinics every year. I hear all the time, the biggest pain point is staffing, right? There’s a shortage of veterinarians, there’s a shortage of technicians, and that is in direct conflict with the demand.
The demand is rising, like adoptions keeps going up, pets are living longer, demand for vet services are not declining, they’re very resilient. Keeps increasing and supply demand is starting to get an imbalance. And so I quoted my story. I think the data was from IDEXX is that by 2030, there might be a 40 percent gap between the supply of people who can do the job and the demand for those services.
So something’s going to have to be there to increase the productivity.
Dr. Andy Roark: Yeah, you, you point to. You point to traditional telemedicine, which I, which I think was interesting as a possible way to, to increase increased capacity for, for vets. And I, I think that there’s, there’s some possibility there and I like, and you did a, you did a wonderful job of, painting a picture of what the future might be like.
You know, it was, it was very nuanced in not having a crystal ball, but also sort of the the convergent forces that you see. What I’d like, I’d like to you to sort of speak to here, if you don’t mind, you know, so you make a point, you know, the people are closer to their pets than they have been in the past.
And each generation is more tightly bound to their pets than they have been. And then, you know, and we see, I see increased willingness in In investing into pets as we go and then, you know, you as a tech entrepreneur, I know that you’re aware that, you know, our younger generations are also more comfortable with technology and they, they interface with the world through technology way more than previous generations do.
And so I know this is a large sort of conversation. We talk about AI and things, but you, you, you make, you make some references in the article to just things like digital self check in tools and patient intake kiosks and integrated CRM platforms, spanning every visit touch point. And like my eyes kind of got wide as I, I just like, this is really cool.
Can, can you speak? I know in just sort of broad brushstrokes. What does that interface with technology look like in 2030, say, as we’re going, if we continue to be shorthanded. I’m an optimist, Alex. I really, I think that we can solve so many problems with technology and with education. And I just, I am, I bet on, on vet medicine. I would like to see the future through your eyes, if that’s okay. What, show it, show it to me.
Alex Douzet: I mean, and look, as an entrepreneur, one of my motto is necessity is the mother of all invention, right? And so when I look at what I quote in the articles, this shortage of supply with this rising demand to me, that is the inevitable clash that’s going to force everybody to rethink the experience to say not going to suddenly manufacture more veterinarians or more technicians.
So we’re gonna have to find a way to increase productivity. And this is where technology does it. Every industry, if we look over the last 20, 30 years where technology came in, it created, if it was designed the right way, increase productivity in a tremendous way, right? Think about, like, the standard accountant that years ago was doing accounting on the paper ledger.
And now you’re introducing software that are doing accounting and A. I. These people are much more efficient and more productive, right? And the goal is not to necessarily use technology to replace the people that we see in the clinic. It’s to really give them like an exoskeleton to enhance them, so they become their co pilot.
So I think it’s got to be on two fronts. One is on the experience. You have this new generation coming in. They were born and raised on technology, right? They were born with this thing in their hands. That’s the native. I mean, it’s, it’s an unbelievable when you observe a young person and their approach to communication.
Texting is the first natural thing. Calling is not, you take someone who’s below the age of 25 and they’re like, they look, they look at you like you’re a deer in the headlight. If you say, well, you don’t call this person. Why don’t you call to make an appointment? They’re like, well, what can I go online to make an appointment?
What can I text? Make an appointment or what can I use an app to make an appointment, right? So from that standpoint, over the next 10 years, clinics gonna have to adjust to that way of doing where it will have to be self servicing tools and you can get productivity from that standpoint. So enabling appointments, booking through an online experience.
We are texting, self checking into a clinic through a kiosk. So you don’t, you need the app to like, find this person every single time. Maybe, maybe not me. I’ve seen some clinics today in the U. S. experiment with that, where the checking process is actually relatively seamless. You know, disappearing of like all the paperwork and it’s still like personally, I find this painful of mine when I walk into a clinic and I see, Oh, my God, you’re gonna make me fill up like this whole like intake form on paper.
Like, can you not be digitalized? That seems to be like such a low hanging fruit. Yeah. So things of that nature, and then we can go into the next phase, which is AI and how we can use AI to really enhance the productivity and really turn AI into a co pilot for both veterinarians and technicians.
Dr. Andy Roark: Yeah. think AI is going to take away a lot of the tedious work that we do in the practices. I think a lot of I think a lot of responding to emails and things is going to go away. I think the biggest opportunity for AI, I mean, I’m very biased as a veterinarian. I think medical record creation and management is going to be, Such a godsend, as far as AI, being able to make to make veterans faster, save them from spending time, you know, just documenting, documenting, documenting.
I think there is real opportunity there. You, you make the case in this article that you think corporation in veterinary medicine might be beneficial in increasing efficiency. Can you sort of talk to me a little bit about that and kind of what your, where your perspective is?
Alex Douzet: So promise, and I kind of go back to like first principles to, to build a thesis for this argument is most clinics are in world independence or relatively small business. Yeah. They may have three, four veterinarians working there. They may have, you know, 5, 000, 6, 000, 10 owners active who come regularly to practice.
In terms of revenue, we’re looking at maybe 3 to 4 million, right? So I put this under the category of a small business. To solve the problem that we discussed before, this requires investment in technology. And unfortunately there is a bit of a scale game there, right? So investing into a front end experience and then be a mobile first app to interact with the pet owners, digital kiosk, some of the things you may have to make a one time investments, but you can deploy that across many, many, pet owners, you’re going to get a better return on your investment.
And I think that’s where the corporatization comes in. Because if you are in continue to be just one man show as a, as a operation, there’s only so much you’re going to be able to invest. There’s just going to be natural boundaries in terms of resources that you have access to, to make those investments.
But if you’re looking at a broader group, the broader group can look at, Oh, we can make a one time investment that is meaningful, but we can deploy this across 10, 20, 30 clinics and get more efficiencies. And then at that point you standardize some of the more mundane processes, right? So that’s where I looked at it.
Now, it works great as an argument. The flip side of what I just said is the reality check. You know, today, you know, in the U S the, it’s roughly 40 percent of clinics or under the umbrella of a corporate, so that could be a large group, like an NVA, a VCA, or it could be let’s call it a private equity home group, and then 60 percent are still independent of the group of the 40%.
I would say there is underwhelming evidence that it’s actually working, right? I think what we’ve seen there is over the last 10 to 15 years, the message has been mostly join us, be you. But the challenge with that is ultimately you need to show an ability to create efficiencies, right? You know, how do you, what’s the point of like gathering 10, 20, 30, 50, 100 clinics If you can’t show any type of like standardization and any improvement.
And I think, you know, like you have to be able to look at both sides. Like you have to let the veterinarian decide how they want to practice medicine. I don’t think anybody loves being told how to practice medicine and having a top down approach. But on the flip side, on all the processes, standardizing, you know, practice management software checking processes, record keeping, all those things can be streamlined in the back end.
I think that’s probably where we see most of the corporation struggling in a big way in a way that was probably not expected, but they need to get there, right? Same, you know, like in one of your podcasts, because I do listen to your podcast, right? I listen to the one you made on the, on the wellness plan.
And I thought it was amazing and I thought it was a spot on, like every argument you made there was like spot on in the benefit of wellness plan. One of the reasons why we see such a low penetration of wellness plan in this country is mostly because all the companies will love to do it, completely struggle from a backend system and operation to implement the benefit of a wellness plan.
Dr. Andy Roark: Yeah. No, that well, thank, first of all, thank you for saying that, but I, I think I could, I, I could talk to you all day. This, this, I, I really enjoy your insight. I, I, I love your articles. I, I link it up and also the AVMA news piece down in the show notes so people can check that out. Alex, where can people find you online? Where can they learn more about Pumpkin Pet Insurance?
Alex Douzet: Yeah, I mean, super simple. You can find me on LinkedIn, you know, just just type my name and you’ll be one of the first thing that comes up. You Google my name, you’ll see all the story I write for Forbes, a contributor. You can find me on social media like X and Thread, and then, you know, you can just Google Pumpkin, Pumpkin Pet Insurance to learn more about us.Dr. Andy Roark: That’s that’s amazing. Thank you for being here guys. Thanks for tuning in and listening. Take care of yourselves everybody and that’s it that’s what I got for you guys, thanks for being here. Thanks to Alex for being here. I hope you enjoyed it. I put links in the show notes for everything that we talked about and mentioned check them out. I’ll see you guys later on take care of yourselves everybody!
