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Saturday, May 13, 2006

How Much is that Doggie in the Window?


Vet Bills and the Priceless Pet: What's a Practical Owner to Do?, by Damon Darlin, NY Times: When Henry the cat began dragging his legs, his owner, Carol Kalinoski, suspected her 15-year-old pet's problem might be ... serious... Steroids weren't helping, so her veterinarian suggested ... magnetic resonance imaging... The cost was $1,200. Ms. Kalinoski paid. The vet didn't learn enough ... and he advised Ms. Kalinoski ... to get a second M.R.I. at the nearby imaging center... Imaging the entire spine would cost another $1,200, and Ms. Kalinoski paid again. The veterinarian spotted a tumor. Ms. Kalinoski was given a number of choices, including putting Henry to sleep or surgery that would cost $3,200.

What would you have done? Paid the money even though the cat was old and the surgery had only a 50 percent chance of success, or said, "It's a cat," and asked the vet to euthanize him, or wished you had bought pet insurance 10 years ago? Ms. Kalinoski, a consultant and regulatory lawyer, chose surgery. ... Making a choice between expensive health care for a pet or ending the life of that animal ... is never easy. Wallace Sife, who as founder of the Association for Pet Loss and Bereavement [and] a Brooklyn psychologist, has ... counseled people who have gone deeply into debt to care for a pet...

Veterinary care is not a trivial expense... Pet owners ... often underestimate what they spend on their animals. James F. Wilson, a veterinarian ... who often testifies in court on the value of an animal, said research ... puts the average lifetime cost of a medium-size dog at $10,400. A small dog will cost slightly less and a large one slightly more. Caring for a cat will cost an average of about $10,600.

Dr. Wilson took his calculations a step further. He found that among people who have a strong bond with their pet — did you know 5.8 million pet owners celebrate their pets' birthdays? — the expenses more than double. ... the cost of caring for a medium-size dog can go as high as $100,000 for those who make man's best friend their best friend. He estimated that almost 40 percent of the cost of raising a medium-size dog went to health care... Health care costs for a cat approach a quarter of total expenses. "The amazing thing is that not one of the people had a clue that this is what they are spending," Dr. Wilson said...

This, he said, is evidence that owners need to insure their pets. "Stop thinking of it as a $500 dog, but as a $50,000 investment," he said. But most pets are not investments. In purely economic terms, a pet is usually not worth thousands of dollars... All the kibble, toys and vaccinations are not investments. They are what businesspeople call sunk costs. Whatever decision you face is made independently of what you have already spent.

Is pet insurance any more defensible as a money saver? Probably not. A policy on a 2-year-old cat offered by VPI Pet Insurance ... carried a premium of $28.75 a month, or $345 a year. If the cat lives 18 years (not uncommon), 16 years of payments would add up to $5,136, or just about equal to what Dr. Wilson estimated as the high end of out-of-pocket health care costs for a cat.

There are other costs with the insurance, like a co-pay of $50 for every office visit. Statistics show that the average cat makes 2.3 visits to the vet a year, so add in $115 a year, or $1,840, over the cat's lifespan. VPI estimates that its standard policy covers 40 percent to 80 percent of the cost of a procedure ... Though pet insurance is more popular in parts of Europe, Americans may have figured out it isn't worth the expense. VPI ... has about 80 percent of the market. ... That's less than 1 percent of the 90.5 million cats and 73.9 million dogs owned by Americans.

Don't turn to veterinarians for an easy answer. "Our profession is split on the issue," said Robert Mason, a ... veterinarian. Dr. Mason's own view is that insurance allows vets to charge more. "If you don't care what I can charge you, I can charge you more." Dr. Wilson characterizes it differently. "The wonderful part about pet insurance," he said, "is that I get to practice medicine." ...

You buy insurance for your home or car because the cost of replacing a house or defending yourself against a lawsuit filed by someone you hit could crush your finances. "It would be unusual for you to have a pet health problem that would financially devastate you," Dr. Mason said. ...

    Posted by on Saturday, May 13, 2006 at 03:18 AM in Economics | Permalink  TrackBack (0)  Comments (15)


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