The spiral in health care costs

It affects many different nations:

The American Pet Products Association estimates that Americans will spend $12.2 billion on veterinary care this year, up from $11 billion last year and $8.2 billion in 2006.

And this:

Pet health insurance is a booming industry, growing more than 20 percent every year, although only an estimated 3 percent of pet owners have bought policies.

First, at least at low levels of cost, relying on out of pocket expenditures isn’t controlling cost growth.  Second, the insurance is available to begin with, albeit with restrictions:

But like health insurance for humans, pet insurance can be complicated and highly restricted. Some policies will not cover older pets or genetic conditions that certain breeds are known to have, such as hip dysplasia in retrievers.

Others limit coverage to only one treatment per illness. So if your dog develops asthma, for instance, some policies will cover just the first trip to the vet although treatment will require multiple visits.

Is this what free market health insurance would look like for older humans?  The full story (1/20) is here.

Here is the pet health insurance blog.  September is pet health insurance month.  Here is a question I had never heard before:

Have you ever forgone health insurance for yourself to cover your pets?

Comments

I don't think the last question is outrageous. If you are young and healthy, if pet insurance is much cheaper than human insurance, and you derive great pleasure from pet companionship, why not? Or to put it another way, giving up pet insurance may not free up enough money to afford human insurance.

Your comment re pet care: "Is this what free market health insurance would look like for older humans?"

You mean dying by the side of the road?

Not all pets have wealthy owners.

Visit the Humane Shelter sometime.

Are you trying to say that "dying by the side of the road" is an answer for "what free market health insurance would look like for older humans"?

We spend much more on our pets than the UK, France and Canada. We obviously need single payer veterinary care or more government control with an independent board to control costs by reorganizing veterinarians into accountable care groups where they are paid to keep pets well rather than reward them performing procedures. Things are working so well with Massachusetts' RomneyCatCare that we should have all states do this. Insurance for pets is a right and needs to be extended to all dogs, cats, horses and guinea pigs. I'm sorry, but society cannot afford to repair Spot's hip when he is 12 years old. And in no way can pet owners be considered consumers since they can't understand complex scientific processes and choices involved when their hamster is on the operating table.

I believe there are only three states here in U.S. that actually collect a retail tax for veterinary medical services, so in a way this industry is subsidized. In this respect, this industry is on par with health care.

A vocal group of people are calling for removing the tax exemption for luxury cosmetic plastic surgery. Do these same people still consider keeping Fido healthy a luxury or necessity (righteous indignation)?

Why do the debates always talk about insurance? That's a secondary issue. Shouldn't "cost" be what we focus on? Why is pet healthcare so expensive in the first place? I was surprised to read that there are only 28 colleges having vet programs in the US (I number I still suspicions about). And they produce only 2500 graduates a year*?

Increase veterinarian supply should be the primary focus and it is I can just imagine that the vet-licensing body hates this!

* http://www.usatoday.com/news/nation/2008-02-28-vetshortage_N.htm

Pricing for vet procedures is all over the place too. Some friends and I did some quick research in Chicago and found 15 to 20 percent differences for some procedures at different vets in relatively similar locations.

I have pet insurance for my dog -- "Ludwig von Mises," a chocolate Lab. You pick the level of coverage you want, based on the premium you may be willing to pay.

The vet fills out a form, and either faxes it themselves to the insurance company, or you do. I have found that it is efficient, and when I've had to use it, has covered about 80 percent of the expense.

And no one is obliged to "subsidize" my dogs insurance through taxes, nor am I taxed to have a "free" single provider system. Nor does the vet need to fill out a variety of government forms, or price according to what the government dictates. And I've never come come across a vet who refused a dog patient with private insurance -- since there is no animal Medicare or Medicaid bureaucracy to deal with.

I think it is time that we extend the same freedoms and "rights" that animals have in these medical matters to humans. Surely humans should not be discriminated against in comparison to recognized private choices dogs and their masters can make.

Richard Ebeling

Some dogs are lucky.

Some dogs are not.

Well, you can have the equivalent of a free market in human insurance with decently low costs if you are willing to deny care to those who can't pay out of pocket and who don't have insurance. That will also have the effect of causing health providers to compete for customers. However, since society has decided it won't accept people dying on the street, one either needs to mandate private insurance by all or tax and provide it for all.

Pets aren't denied care. Any pet, wanted or unwanted, will be treated for free nearly everywhere in the US. Being homeless and hungry is treated like any other health condition. Oddly the care offered is fairly expensive; the cost of a syringe and a dose of a barbiturate which is more expensive because its DEA controlled substance. A much cheaper method would just require a little pure nitrogen, or even air without the oxygen (O2 or CO or CO2).

If we treated people like pets, then we could have both the lower costs of pet health care and no people dying in the streets, or even living in the streets, doorways, bridge underpasses, parks, libraries, abandoned houses, ....

Some Humane Shelters are gas stations.

I guess you could say pets aren't denied THAT form of care.

If health care is really about signaling that you care (Hanson), you would expect a spiral in pet health care costs similar to human costs. Pets are primarily about signaling our conscientiousness and caring.

Cost transparency is a huge problem driving up vet costs, too, not just in human healthcare. Vets will order and charge you for a slew of tests at once without telling you the price breakdown/comparison or giving you the option of taking one step at a time. I've learned to insist on this, and insist on detailed quotes ahead of time (and they are so surprised by this it seems like they aren't aware of the need for cost control at all!). I would never have agreed to some vet bills I've paid if I'd been given the option ahead of time.

How can you place a price on life?

...unless you are a liberal...

I guess my Smith and Wesson is doing double duty insurance wise.

"although only an estimated 3 percent of pet owners have bought policies" makes no sense. If it were 100%, then 20% growth would definitely mean growing costs. As it is, all the 20% growth could mean is that the fraction with policies went from 2.5% to 3%. Or that costs rose 20% while the fraction with policies didn't change. Or that costs dropped and the fraction with policies went from 2% to 3%. Or that costs rose 50% but the fraction with policies fell as a result. Or heck, that both those numbers stayed constant but the number of pet owners went up 20%. Or anything else as long as the product of "cost" and "number of pet owners with policies" is up 20%.

I personally do not have a pet, but I don't believe it is unreasonable to forgone health insurance for yourself to cover a pet in need. I am a young and healthy college student, rarely getting sick and who rarely needs additional visits to the doctors. If my pet was sick, I, hands down would give up paying for health insurance for myself for my pet.

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