Whenever I have dinner with friends, the conversation always ends up on one of three topics: the difficulty of dating, finding affordable housing, or an update on everyone’s pets. The last one on this list includes some cute photos and veterinary updates. I love hearing about my friends’ cats and dogs. But I also have to admit that I just don’t understand. I don’t have a pet. I never did it. (We will not discuss the unfortunate caterpillar in elementary school.)
I’m in a minority: more than half of American households have pets. That means more than half of U.S. households have also seen the cost of pet care increase in recent years.
Helaine Olen is the proud owner of a Havanese poodle mix named Barney Rubble. She is also the editor-in-chief of the American Economic Liberties Project, an antitrust organization, and she says people are often unprepared for the high price it can cost.
Part of that is due to inflation, Olen says, but veterinary care is a major factor. “The same medical advances that have allowed us to live longer and that we consider miracles – whether they are cancer drugs, stem cell therapies, or various pharmaceuticals – the same goes for your cats and dogs,” Olen says.
Decades ago, a cat undergoing an MRI was unheard of; now it’s common. But it’s not just expanded access and improved technology that are driving up prices. Olen says who is behind this health care is a factor. “Big companies and private equity firms have seen all this, know that people say they will do anything for their pets, know that they view their pets as children, and have rushed into the industry,” she told Vox.
So how has private equity become involved in the lives of our pets? And what happens when prices continue to rise? We discuss this and much more in the latest episode of Explain it to meVox’s weekly podcast.
Below is an excerpt from my conversation with Olen, edited for length and clarity. You can listen to the full episode on Apple Podcasts, Spotify, or wherever you get your podcasts. If you would like to submit a question, email Askvox@vox.com or call 1-800-618-8545.
What types of costs are we talking about?
When your pet is young, you probably spend several hundred dollars a year on various vaccinations, spaying and neutering, and annual exams. But the real costs start to show as they age and need maintenance.
For teeth cleaning, animals must be placed under anesthesia. You will spend a minimum of $1,000. This amount will be even higher if an animal’s tooth needs to be removed.
I’ve talked to people whose pets had collapsed hind legs or herniated discs. You can easily lose over $10,000 for surgery. You can easily spend four figures for a 24-hour night. I spoke to someone who was offered $3,500 a night for just one night of observation.
You mentioned that part of it depends on who owns the pet clinics and how that evolves. Who do they belong to now?
Traditionally, it was an independent practice. But over the last 10 to 15 years, large corporations and private equity have moved into this sector. The largest owner of veterinarians in the United States right now is a group called Mars. And if Mars looks familiar, it’s Mars like in Skittles.
They own approximately 2,500 veterinarians under the names VCA, Banfield and Blue Pearl. I would say that between a third and 50 percent of veterinary clinics are corporately owned. It was 10 percent, or less than 10 percent, a little over ten years ago.
What caused this rise and why is a candy company behind it?
As people realize how much can be done to help their pets, businesses and private equity firms have essentially seen what one analyst described as low risk and high reward. I’ve spoken to employees at some of the larger chains who tell me that prices regularly go up every six months, every nine months, or once a year.
In Britain there was recently a government investigation into all this by the Competition and Markets Authority, their equivalent of the Federal Trade Commission. They determined that private equity and corporate ownership are responsible for £1 billion spent on pets over a five-year period that would otherwise not have been spent, and that people paid around 16% more to vets owned by large companies than to independent vets.
How do people pay for this if it’s so expensive?
I live in Los Angeles and I wrote an article for New York magazine a few months ago about all the people here who now drive their pets to Tijuana because it’s a lot cheaper there.
Pet insurance is a very mixed bag. This is extremely expensive in many cases. This is increasing at very high rates. My own pet insurance increased by 30 percent between last year and this year. And by the way, my dog Barney Rubble is 2 1/2 years old.
Wow. He’s still so young.
To my knowledge, he hasn’t had any issues that could account for a 30 percent increase.
The other problem with pet insurance, unlike human health insurance, is that there are no pre-existing clauses (conditions). I’ve lost count of the number of people I’ve interviewed over the years who found out too late that their pet health insurer considered something a pre-existing condition.
What do people do when they get to the point where it costs too much?
In some cases, they go into debt. Buy now, pay later services are also increasingly extending into the veterinary field.
In other cases, they abandon the animal. If you talk to people at shelters, they’ll tell you they think part of the increase in abandoned animals is related to the rising costs of veterinary care.
I imagine it seems like such an impossible choice, like choosing between that money you don’t have and the quality of life for something you love.
The emotions are enormous. That’s part of why private equity firms and corporations have gotten into this: They know that people are going to feel very emotional about their pets and want to do whatever they can to keep them alive, keep them healthy, or keep them pain-free, and they’ll pay almost any price.
When my last dog was diagnosed with heart disease, I was determined to keep him for a few years. I gave him medication that cost $300 a month. I was like, “I can’t lose my Katie.”
The tragic thing about pets is that they are both better than us – in my opinion – and they live shorter lives. You will eventually lose your pet. It’s simply the most heartbreaking thing in the world.
Gn bussni
