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Spending Like Cats and Dogs

vetspending2.jpg

A lot of people are posting this graph showing the rise in health-care costs for people and the rise in the health-care costs for people's pets. It's being used to argue a lot of very big, very specific, points. But it has some problems.

For one thing, the graph shows national expenditures. The rise in costs makes sense only if examined on a per capita basis. If Americans have more pets today than we did in 1984 -- and we do -- then that mucks up the data. There's also the question of whether the populations are alike: If pet ownership is clustered among wealthier Americans, you'd expect them to be less sensitive to the cost of doggie drugs.

But whatever the graph's problems, the sudden acceleration in medical spending on pets does offer insight into spending on people. If you took a limping Fido to the vet and were informed he had a malignant tumor in his foot and three months to live, you would cry, and feel terrible about it, but that was basically that. But what if you were told that there's a $5,000 treatment that could potentially save your dog?

Suddenly, you have a choice. It's not just how much your dog's life is worth to you. It's how much it's worth to you to feel like you didn't decide to let your dog die. A treatment that isn't strictly "worth it" in economic terms -- a treatment that may not even save your dog -- may be worth it to you, because you want to feel like you did everything you could. You want your economic decisions to line up with your emotions.

The rise in health-care spending is not simply that we have trouble saying "no." It's that the march of health-care technology has forced us to make a lot more decisions. Conditions that would have simply, sadly, killed people 30 years ago have treatments -- which may or may not be effective -- today. And it's hard to say "no" to those options. But the crucial point isn't when we accept or reject the treatment. it's when we're faced with a treatment to accept or reject. It's when death begins to look like a decision.

That seems weird to us with pets because, well, they're pets, and because these are new questions when you're dealing with cats. But with other human beings, these are old decisions. We started making them when they weren't that costly. We've made so many of them that we hardly noticed. Indeed, we've outsourced it: Now the doctor pretty much makes the decision and the insurer pretty much pays for it. Which has helped us not notice how many more of these decisions are being made and how much more they're costing and how uncertain they are. But even if we did, what could we do? We say "yes" because that's the only answer that makes sense when you love someone. Put another way, the Beatles were only half-right:

You can't buy love. But you can certainly spend in a way that shows love.

By Ezra Klein  |  July 14, 2009; 2:24 PM ET
Categories:  Charts and Graphs  
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Comments

Conditions that would have simply, sadly, killed people 30 years ago have treatments -- which may or may not be effective -- today. And it's hard to say "no" to those options.

But to paraphrase Robin Hanson, Doctors have been making up treatments forever. Not just the domestic leaches but imported leaches. This chemical or that chemical etc. http://www.econtalk.org/archives/2007/05/hanson_on_healt.html

Posted by: jwogdn | July 14, 2009 2:49 PM | Report abuse

Yes, we buy our pets medicine in large part to show that we love them, just as we do with people. I wonder how US vet spending compares to the rest of the world; I'd guess we spend more. Do we just love more here, or do we think we are richer, or what?

Posted by: Hansonresponse | July 14, 2009 2:52 PM | Report abuse

Perhaps the way forward in for a public option health plan is to include pets...
A two pet minimum might just be fundable.

And would build a groundswell of support.

Wouldn't cover primates (except H. Sapiens), exotics, farm animals.

Posted by: mrbill30560 | July 14, 2009 3:08 PM | Report abuse

Great post, Ezra.

Posted by: davestickler | July 14, 2009 3:12 PM | Report abuse

many, many years ago, i heard dennis prager speaking, and he was stunned that in some study, if i remember it correctly, more people would save their drowning pet, than they would a drowning stranger.
it is no wonder that in a world of ever-increasing, single households, dog and cats are becoming significant others, everpresent and faithful, in the good times, and in the bad times.
in many cases, they are not just the family dog...they are "the family."
with that in mind, what wouldnt a person do for their pet,when a pet becomes a constant companion/ soulmate with long whiskers and a tail? ( there needs to be a better word than pet.)
humans have a whole different paradigm for viewing the arc of life, especially in these times.
a few months ago, after spending a day at a birthday party in an alzheimer's unit,
there was a room full of patients who had once worked so hard, lived through the depression, raised families....and now they sat, with party hats on, in wheelchairs, many were not even able to lift their forks. none could sing "happy birthday." i thought my heart was going to break.
that afternoon, when walking my dog, i looked around at the leaves that had fallen on the ground, the roses that were fading on the bushes, the birds singing in the trees...everything moving in its due seasons....living in harmony with nature....moving in a graceful progression on the arc of life.
for better or worse, and sometimes, so sadly and tragically,
it seems not entirely clear, we are following our own unnatural course of things.
the capabilities of medicine are changing and challenging many of the deepest ways in which we view the progression and cycles of nature, and our place within it.

Posted by: jkaren | July 14, 2009 3:33 PM | Report abuse

I didn't exactly grow up in a rural area, but maybe it was close enough that I never understood the extreme lengths people went to to save their pets. It's not that we didn't love our pets growing up, it's that when the animal got really sick, it was time to say goodbye. I was shocked when I moved to the East Coast and people were keeping their animals on all kinds of drugs to stay alive.

Posted by: MosBen | July 14, 2009 3:51 PM | Report abuse

The graph shows that, notwithstanding the caveats you mentioned, veterinary services costs and health care costs are fairly well correlated. That's not an unexpected result. I would expect vets' fees and the cost of drugs for pets to track doctors' fees and the cost of drugs for humans.

Posted by: pneogy | July 14, 2009 3:56 PM | Report abuse

But we should accept the trojan horse of a public option that will lead to a single payer system where we aren't allowed to?

How much is good health worth? If cable costs around $50/month then how much should healthcare cost per month?

I think the real question about healthcare costs can be boiled down to the following - Why does an MRI cost more than a boob job?

Posted by: fallsmeadjc | July 14, 2009 4:03 PM | Report abuse

Yes, this is one of the fundamental causes for spiraling health care costs.

And it's starting to harm the economic ability to support things like education and research -- in other words, the future economic potential.

I've written a carefully thought out post on exactly this end-of-life question and inside the larger question of health care cost inflation:

http://findingourdream.blogspot.com/2009/06/good-healthcare-ideas-help-think-up-new.html

But back to the issue right now: It's time to weigh-in: to write Congress yourself about reforming the cost inflation itself that results so much from the fee-for-service system that separates pay from outcome.

http://findingourdream.blogspot.com/2009/07/write-your-congressperson-and-senators.html

Posted by: HalHorvath | July 14, 2009 4:24 PM | Report abuse

Two big differences:

1. Vet care is a "normal" market, human health care is not.

2. At the start of the period, marginal benefits of vet vs. human care (in terms of physical outcomes) were vastly different -- so we should expect a vastly DIFFERENT evolotion of costs.

Taken together, this is more evidence that something about human health care is broken (see GreeningPlace.blogspot.com).

Posted by: JamesBooker | July 14, 2009 8:18 PM | Report abuse

Why does an MRI cost more than a boob job?


Uhhh.... an MRI scan costs about $1000. Good luck finding a boob job for that amount. They start at around 5k minimum.

Posted by: platon201 | July 14, 2009 8:52 PM | Report abuse

"can't buy me love"

But you can rent it. And you don't have to talk to them afterward. No baggage.

Posted by: WrongfulDeath | July 15, 2009 10:41 AM | Report abuse

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