High Dog Health Costs;
Why and What Can be Done ?
There are approximately 6.3 million dogs in Australia. This number supports a complex market of dog related food, accessories, medical support, and public regulation. Many believe dog ownership plays a vital social role in companionship for isolated and elderly groups in the community(https://www.heart.org/en/healthy-living/healthy-bond-for-life-pets/pets-as-coworkers/pets-and-mental-health) but Increasingly dog ownership for this group is becoming difficult due to spiralling pet health costs. A Forbes survey in the US found 42% of pet owners could not pay for a surprise Vet visit and 63% are finding difficulty in adequately caring for their pet’s health (https://www.forbes.com/advisor/pet-insurance/pet-care/how-much-does-vet-visit-cost)
Why is health care for pets becoming so expensive?
Several reasons have been put forward including.
- Concentration of ownership in the Vet industry through the emergence of corporate chains
- Increase in treatable dog illnesses, especially cancer.
- Greater coverage of pet insurance
Other contributing factors include.
An imperfect market
Dogs play a major role in the life, of their owners and much emotional attachment is present between dog and owner. Dog care as a result becomes an inelastic good, resistant to price increases. This sets up the possibility of super normal profits being made.
Shortfalls in insurance
Many pet owners have pet insurance but there are several constraints.
- Most policies do not adequately cover full costs of treatment .
- Requirement that the clients pay upfront costs of treatment.
- Payment limits.
Should greater regulation apply
Prices are determined within the market, but this market is increasingly imperfect. Concentration in facility ownership and monopoly control of the underwriting of pet insurance means that market forces are restricted with implications for rent seeking by the main players.( https://www.abc.net.au/news/2021-09-25/qld-pet-surgery-fees-vet-clinics-pricing)
What role could a government play.
- Increased anti-trust legislation regarding concentration in the industry.
- Price controls/ scrutiny of fees especially in emergency clinics.
- Increase university places for vet training.
Do we need “DOGICARE”?
In general, Government under under-writing of medical services is both costly and inefficient. The NDIS and Medicare are good examples of well-intentioned government initiatives that have become bloated bureaucracies and run considerably over budget. Adding another layer of universal health provision for pets or dogs specifically is not recommended for several reasons.
- Dog owners while substantial, are in the minority in the population and there would almost certainly better ways of spending public money to benefit greater sections of the population.( Dogs: the people online who really, really hate your beloved pooch. (slate.com))
- Moreover, many persons dislike dogs, especially in built up areas and would resent the use of tax-payer money in this way.
- Demand for these services is currently unknown but would likely grow rapidly as dogs that would previously be euthanised would start receiving subsidized treatment.
Conclusion
Dogs play an important social and health role for families and those that are isolated and socially deprived. Governments should promote safe ownership on these grounds. Market concentration in both provision and the -under writing of insurance has created an imperfect market that acts against consumers.
However, there needs to remain a high element of user pays in dog ownership including health costs. Rather than attempting to set up a form of medicate for dogs, governments can ease the health cost of dog ownership in several ways.
- Subsidized or free initial vaccines to reduce the incidence of disease among dogs.
- Earmark licence fees for research into dog health.
- Use consumer protection anti-trust laws to reduce the power of chains.
- Conduct a royal commission into charges in emergency clinics.
- Expand the number of vet places in universities,
5 Responses
Thank you! An area that definitely needs more light thrown on it for all companion animals.
Being involved in rescue, escalating vetcare costs are a huge issue for pet owners wanting to care for their animals properly – leading to increased surrenders.
So, the animals we are see are no longer necessarily ‘unwanted’ or ‘strays’, they might be well-loved family pets. Traumatic for all involved.
The current situation results from.increasingly non-competitive supply, which is currently unregulated by the ACCC and inelastic demand from dog lovers. The dog insurance market though a benefit to some comsumers is also encouraging over servicing. The emergency clinics and the fees charged are in great need of regulation. The explosion of fees as the level of concentration in ownership is occurring is exactly what economic theory would predict. In other words we have market failure. which in the short run needs anti trust legislation and in the long run increase supply of trained vets
Thoroughly agree with everything you say John. So glad to see you are leading the charge. Living in a retirement village importance of dogs to mental and physical health manifest everyday.
The current situation results from.increasingly non-competitive supply, which is currently unregulated by the ACCC and inelastic demand from dog lovers. The dog insurance market though a benefit to some comsumers is also encouraging over servicing. The emergency clinics and the fees charged are in great need of regulation. The explosion of fees as the level of concentration in ownership is occurring is exactly what economic theory would predict. In other words we have market failure. which in the short run needs anti trust legislation and in the long run increase supply of trained vets
The health and companionshp considerations are important though neglected in the economic literature. In sum circunstances, pet ownership might qualifty for tax concessions