Pet Health Care Theories

When I looked at that table, I noticed something a little strange: the highest number on the pet scale is six times the lowest and the highest number on the human scale is five times the lowest.

Those numbers are on the same point on the Y axis, so it seems to me that there is a problem with the comparative scales.

Is there evidence that our additional spending on veterinary care has no or very little marginal gains? That is after all the whole problem with health care spending: we are spending more money but not getting anything for it.

If new technology allows greater pet care, and people have more disposable income, we might expect more spending from rational individuals.

Without reporting on the marginal gains of this additional spending, I don't see how we can say anything about veterinary vs. health care spending?

@John Jenkins:

Both healthcare costs and veterinarian costs have increased by ~280%.

I assume Arnold is joking. I think it specious to argue that the fact pet owners rather than the pets themselves pay for pet health care is in any way analogous to third-party payments. One might as well say that even if paid for out of pocket, pediatric medicine necessarily involves third-party payment since the child doesn't pay the money out of his own earnings.

In a perverse sense, this might be good news. It raises the possibility that using other people's money is not driving up health care costs by as much as might have otherwise been thought. Perhaps our society is sufficiently rich that we would voluntarily pay something approximating what we currently pay even if we paid it out of pocket.

This in turn would raise the possibility that other countries, via intervention in the medical marketplace, are systematically underpaying for health care, providing less care than people would naturally pay on their own (albeit, they are less wealthy societies than the USA).

Government pet healthcare service, now that would be funny. I have seen people spend 1000s on exotic treatments for their pets such as chiropractics and electro therapies.

Before I would draw any conclusions from this, I would want to know the per-capita data (per-caPETa?).

A cursory googling didn't turn up a historical trend in pet ownership, but I'd be willing to bet that over the period in question - in which disposable income grew - you wold find increasing numbers of pets per capita in this country; meaning more vet costs. I'm sure it wouldn't eliminate the upward trend on vet spending, but would flatten it.

Higher disposable income would also lead to people opting for treatments they may not have in the past.

@patrick: check your math. both numbers are far under 200% change.

Arnold! How can you not like dogs!?

I can understand being upset by an irresponsible owner given your accident, but it sounds like your dislike began a long time ago.

You are my favorite economist and normally so wise, but I have a hard rule of distrusting anyone who does not like animals (esp. dogs).

Sad day.

Bill - why would knowing per capita pets make a difference? People who spend $250 each on four pets' healthcare in a year are devoting as much of their disposable income to pet vet care as if they had one pet and spent $1000 a year on it's healthcare.

All things equal, you would expect pet expenditures to grow faster. According to BLS the mean salary for a veterinarian is about $75,000. http://www.bls.gov/oes/current/oes_29he.htm)

and Physician’s income varies from $150,000-$400,000K depending on specialty http://www.bls.gov/oco/ocos074.htm

It seems to me that the far more relevant comparison is plastic and laser eye surgery on humans, rather than vet expenditures.

With vet expenditures, I'd want to know if quality and price has fallen, even if total expenditures has been increasing. After all, a graph of computer expenditures would look pretty similar.

Arnold,

Thanks for the link. I agree with Bill that you'd want to see the per capita (per canine, etc.) data, which doesn't seem to be available. Moreover, you have changes in the composition of the pet population that make comparisons hard. The broader point was simply that even in a totally free market -- sadly, veterinary care is about as close to a free health care market we can find -- you're going to find rising spending over time due to technology and income effects.

The key issue, as I tried to point out, is that the levels of spending are vastly different. Obviously most of this stems simply from the fact that we value humans more than pets (or at least most of us do -- PETA members, don't take offense). But things like the RAND study indicate that the level of spending may be independent of the growth rate of spending. In my opinion, our problems lie more in the level than the growth rate.

As for your dislike of pets, I can only pity a man who doesn't like a dog! Granted, the bike accident probably didn't help things.

One question for Arnold -

Why did you brake?

Rick,
Are you wondering why I didn't hit the dog?

a) it wasn't an option. The dog was on one side of the path, and the owner was on the other, with the leash in between. I braked to avoid hitting the leash, which probably would have sent me tumbling over the handlebars.

b) If I could have slammed into anyone on purpose, it would have been the owner. I don't hate dogs. I just think that the number of pets is out of control. One dog for every two hundred households sounds like a better ratio. But nobody appointed me pet czar.

Don't ride on Bike Paths, the road is much safer.