Is Increased Health Care Spending Related to Our Pets?

Some experts believe the rapid growth in health care spending is the result of government intervention and generous health insurance plans, but others believe it may have more to do with how much people are spending on pet health care. 
Kerry Lengyel
Published: January 12, 2017
Human health care spending has been growing quickly and exponentially since the 1960s. Some health economists attribute this growth to government intervention in the health care market along with generous health insurance plans that promote unnecessary spending. But others believe it may have more to do with the rapid growth in pet health care spending.
Health care spending by American households for both people and pets increased significantly between 1996 and 2012—up by 50% for humans and 60% for animals. While pet care spending comes from a much smaller base, this increase could have effects on the overall health care industry. And many similarities in the human and the pet health care industries back up this theory.
The rising spending habits of Americans when it comes to pet care, some economists say, is due to the increase in the number of veterinarians, the availability of pet insurance, improved technology, as well as the emotional aspect of caring for a pet.
More Veterinarians
Numbers of physicians and veterinarians have both been increasing more rapidly than overall employment. The number of practicing physicians has grown 40% since 1996, and the number of veterinarians has increased 100%.
While veterinarians normally earn far less than physicians, their salaries are still higher than average. Just like physicians, veterinarians undergo schooling, training, and licensing, all of which command high salaries and give them the authority to treat pets. People place their trust in veterinarians because they play a crucial role that the lay person cannot fulfill.
Pet Health Insurance
Pet health care, which is less expensive than human health care, is still fairly new and uncommon, but continues to grow. If your pet has very high health care costs, pet health insurance can significantly help with high-cost surgeries and treatments.
While 90% of Americans are insured, only 1% of pets are. Even so, total premium volume for pet health insurance has increased by about 17% in each of the past 2 years.  
Technologic Advances
Technology also plays a role in increasing the pet health care spending of Americans. Routine veterinary visits cost pet owners only a few hundred dollars per year, but more serious conditions such as cancer or kidney disease can cost upwards of several thousand dollars.
New technologies that are very common when it comes to human health care are now more common with pet health care as well. These more complex procedures use high-tech machines and high-grade pharmaceuticals and can really rack up the veterinary bills.
But pet owners understand the necessity of these treatments, and the emotional aspect comes into play when making health care decisions. Amy Finkelstein, an MIT economist and author on a recent pet care study, explains that “the emotional nature of the treatment decision may be important in explaining high and sometimes heroic end-of-life health care spending whether on your dog or on your mother.”
It’s hard to be rational when faced with a life or death situation with a family member, and this includes pets. This fact, along with technological advances, pet health insurance increases, and an increase in the number of veterinarians practicing medicine has created a spike in pet health spending, which may have also increased the amount of health care spending across the board.

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