Putting a price on your pet's health

Yoda, a chihuahua owned by health club owner Les Price

Tess Vigeland: Guess how much we spend on our pets. $100 million? $500 million? No. $50 billion last year, according to the American Pet Products Association. That's a record -- and more than we spend on video games and recorded music combined.

Why are we covering this? Because pets reside in almost 73 million homes in this country. So let's address one of the big questions we pet owners face, which is why does it cost 50 bucks to just walk in the door at the vet? And why do we blindly pay whatever it takes? We asked our health care reporter Gregory Warner to look into it.


Gregory Warner: Les Price is a manger of a health club and in his spare time, works as a super hero model at comic book conventions. In other words, he's buff. His dog is dainty. A five-pound chihuahua named Yoda.

Les Price: Guys are like, "Hey is that really your dog or are you just watching him for the day?" So I try to make him as tough as possible but he's still pretty much a little diva.

A tough little diva. Yoda got his tail crushed by a car last summer. Les rushed him bloodied in his arms to the vet hospital where the doctor said he needed his tail amputated for $1,700. Without that surgery, he could get a fatal infection.

Price: And I was already thinking like "Wow, $1,700's a lot," and then...

And then the doctor says well we could keep him in for a night or two under observation to see if he needs the surgery.

Price: And I was like okay well how much for the night and the doctor was like, without insurance, it'll be roughly $1,000. And I was just like "Is Madonna staying in this bed?"

The average dog owner spends $655 a year on health care, that's up 50 percent from a decade ago. Cat owners are in for $644, up nearly 75 percent, close to how much our health care costs have risen by.

And that's a puzzle to economists, like Robin Hanson at George Mason University.

Robin Hanson: Everyone's got a favorite villain or bugaboo about why human health care costs are increasing; it's too much regulation, too much government involvement, too much third-party payment.

Too many malpractice lawsuits. None of these factors apply to pets. You can't blame insurers for pushing up costs either. Pet insurance is rare; only 1 percent of pet owners in this country have it. The 99 percent are paying full freight.

Hanson: But in pet medicine, people put their money on the barrel head. And yet pet expenses are increasing nearly as fast as human expenses.

What gives? Hanson and other economists give two explanations. Explanation one: Love. We treat our pets like family. They eat our food, they sleep in our beds, they relax at the spa, they have Facebook accounts. Of course we're going to pay for their health care. Take dogs.

Hanson: So we want to show loyalty to these dogs who are showing loyalty to us. One way to do that is to spend more on medicine for them.

Explanation two for the rising cost has nothing to do with your pets; it's how we see ourselves.

Hanson: We compare ourselves to people around us. And we ask the doctor and they say well, lots of people do this, most people do this, and the bar has been raised on how much you need to spend on your pets to show you're a caring pet owner.

Now it's not just about us and our pets. It's about our friends and their pets. It's about keeping up with the Jones and the Fidos. And here's where it really gets human: We want our pets to have everything modern medicine has to offer.

James Serpell: So the veterinary profession is if anything having a hard time keeping up with this trend.

James Serpell is professor of animal welfare at the University of Pennsylvania School of Veterinary Medicine.

Serpell: People are saying things like, "I want you to do dialysis on my cat."

For $23,000.

strong class="name">Serpell: "I want you to do a total hip replacement on my dog.

For $3,000.

Serpell: That kind of thing.

But Serpell says veterinarians are also to blame for offering these things.

Serpell: I mean we're not going to build an MRI unit and then not use it. We're going to be recommending that our clients have their animals MRI'd.

At $1,400 a pop. As technology advances, the more doctors can do, the more we'll pay for, because we care or want to show we do. And all these factors amplify each other, driving the cost of health care ever upward.

But there is another way to look at it.

Serpell: Having these animals may be beneficial for the health of the owner.

Decades of research has shown that pet owners are healthier, happier and live longer. Take this study from SUNY Buffalo, where they actually prescribed pets for people with high-blood pressure.

Serpell: They were a group of stockbrokers. They were allowed to choose whether they got a dog or a cat, but they had to get one.

A control group was only given medications. And then after a while they gave both groups stress tests.

Serpell: ...Like having to do mental arithmetic under pressure or that sort of thing. The groups that had the pet were much less reactive to these petty stresses in life, than the other group.

And their blood pressure was lower. In fact, after the study many of the stockbrokers in the control group went out and bought themselves a pet. So when you think about the cost of pet health care, consider the health care that your pet gives you.

...Which brings us back to the Chihuahua and the muscle man. Les Price never did shell out for that tail amputation; he couldn't afford it. And Yoda left the hospital with $30 worth of antibiotics, nothing more. And eventually, got completely better on his own. Though things were pretty dicey for those first couple weeks, the dog was battered and helpless and scared. Les even had to cradle his butt everytime he went to the bathroom. And if that doesn't say "I care," what does?

In Philadelphia, I'm Gregory Warner for Marketplace Money.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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