The chart below shows spending on veterinary care, which I pulled from the Consumer Expenditure Survey, and national health expenditures (for people) from the National Income and Product Accounts. Two things are interesting here: first, the rate of growth of spending from 1984 to 2006 wasn't all that different--and in both cases, spending grew faster than the rate of economic growth. As new technologies are developed for humans, we adopt them for Bowser and Fifi
Veterinary spending is subject to few of the perversities that either left or right suppose to be the main problems afflicting health care spending. Consumers pay full frieght most of the time. They are price sensitive, and will let the patient die if keeping him alive costs too much. There is no adverse selection. There is no free riding on mandatory care. Government regulation is minimal. Malpractice suits are minimal, and have low payouts. So why is vet spending rising along with human spending?
If the consumer is the pet, then the consumer is definitely not paying full freight. I blame third-party payments!
I should point out that Robin Hanson has published a theory that easily could explain the growth of both types of health care.
Longtime readers of this blog know that I am not such a fan of pets. About a month ago a woman allowed her dog to run across the bike path just as I was approaching on my bike, forcing me to slam on my brakes and fall--fortunately, no broken bones, just a lot of bleeding and a bruise that took two weeks to heal. As I turned around and walked my bike home, the golden retriever had a big smile on its face, and its owner was scarcely more remorseful.
There is no "we" that spends too much on vet care. Individual owners make the decisions. Whether those decisions are foolish or wise is none of my business. As long as we don't have government-funded pet health insurance, then I don't care if the owners spend a fortune on veterinarians. Serves them right, as far as I'm concerned.
But with human medical care, we spend each others' money, and that is the problem. The Democrats insist that "we" should share even more of our health care expenses. And then they will turn around and complain about how much "we" spend.
UPDATE: You would not believe the number of bloggers commenting on this issue. Jim Manzi has the most interesting analysis--he also adjusts for growth in the pet population.