Americans are spending more on health care – for their pets

Humane Society executive Wayne Pacell at home with his dog Lily and cat, Zoe; research has shown that when humans interact with dogs, oxytocin levels increase in both species. : Washington Post photo by Linda Davidson.

Pets – they’re just like us! Or, at least, we Americans try mighty hard to make them so.

We give them fluffy beds. We take them to work. We offer them kale treats and put them on gluten-free diets. We dress them up in (possibly sexist) Halloween costumes, and we strap fitness trackers on them. Our ancestors named their dogs Fido and Rover; we name ours Max and Lucy.

Another aspect of life we share with our animals? Rising spending on health care, according to a recent working paper from the National Bureau of Economic Research.

The U.S. health-care system, the authors note, has been called “uniquely inefficient” for its depressing combination of higher costs and poorer health outcomes relative to other developed countries. Although there are plenty of reasons why this might be, they write, it’s often blamed on an insurance industry that shields customers from decisions about costs, and government regulation and reimbursement that give the industry little reason to make itself more efficient.

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The economists wanted to toss some new information into this complicated problem – comparisons from the world of pet health care. These worlds share several similarities: The patients are often struck by sudden illnesses, and decisions about whether and how to treat them turn on emotional reasoning and financial trade-offs. The practitioners must study a long time and are subject to strict licensing rules, and technology in both sectors has advanced at comparable rates.

But there are a couple of big differences: Only about 1 percent of pets have health insurance, and pet health care is subject to less government regulation.

Even so, after crunching some numbers, the economists found a few striking parallels between our health-care system and Fido’s – er, Lucy’s.

Rapid growth in spending: Using annual data from the Bureau of Labor Statistics’ Consumer Expenditure Survey, the authors found that although spending as a share of gross domestic product on housing and entertainment were “fairly flat” from 1996 to 2012, spending on pet purchases, medical supplies and veterinary services have followed human health-care spending “remarkably closely.” It rose about 60 percent for pet health care in that time, and 50 percent for people.

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Quick growth in both the human and pet health-care sectors: Here, the authors used annual data from the U.S. Census Bureau’s County Business Patterns from 1996 to 2013. The supply in physicians grew “significantly faster” than in other sectors – by 40 percent – while the supply in veterinarians nearly doubled. Physician-related establishments and veterinary-related establishments grew at similar rates, and more quickly than did other kinds of establishments.

A “distinct end-of-life spike in spending” for both people and pets: The nonhuman subjects cited for comparison were 23 dogs that died of lymphoma at one California pet hospital between 2011 and 2014, a group the authors acknowledge was a small, localized and probably more-privileged-than-most sample. The humans were 125 Medicare patients who were diagnosed with lymphoma and died in December of 2008, 2009, 2010 or 2011 (which meant the researchers could examine 12 months of claim data prior to the death). In the last month of life, spending on the humans’ health care was more than twice what it was during a “regular” month; for dogs, it was nearly 3.5 times higher.

The authors, economists at Stanford and MIT, don’t make any judgments about what this says about our relationship with pets. And they make clear they realize this is no apples-to-apples comparison.

But they do say it is “noteworthy” that the parallels between the two systems exist even though insurance and government regulation, which are often blamed for human health-care inefficiency, are less prevalent in pet health care.

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“It should give us pause before attributing the large and rising health care costs in the U.S. solely to the prevalence of insurance and government involvement,” the researchers write.

So now got one more thing to share with your pooch: grumbling about medical bills.