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A month’s rent for a night at the pet hospital

As long as people will pay exorbitant fees to care for loved ones – even loved pets – health care costs won't react the way economists think they will. Too much is at stake.

By Guest blogger / January 10, 2011

Pet owner and economics blogger Diane Lim Rogers greets her beloved Taco during his stay in a pet hospital. As long as people will pay for health services – even pet health services – out of their own pockets, reform may not reduce overall health care costs as much as economists imagine. Health care is not like any other market.

Diane Lim Rogers / Economist Mom

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My dog, Taco, a (speculated) chihuahua-dachshund-miniature pinscher mix dog I adopted in the fall of 2009 (as an estimated 8-month-old pup), came violently ill late last week from something that was delicious to him but ended up effectively “poisoning” him. (The circumstances under which he got himself into that situation were beyond my control and will not be elaborated on here.) I rushed him to the emergency vet late Friday night after he had very uncharacteristically refused food for over a day and couldn’t even hold down any water.

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The emergency facility I took him to was incredible. State-of-the-art technology, the best of trained veterinarians–and even a coffee bar in the waiting room(!). Taco stayed overnight hooked up on IVs to rehydrate and medicate him, and was subjected to a battery of tests to rule out more serious conditions. I received regular, comprehensive updates over the phone and also by email. By Saturday afternoon, I was able to visit him (that’s when the photo above was taken), and by Saturday night–a bit less than 24 hours after his admission–he was able to come home with me.

The bill was a real shocker for me. Nearly exactly equivalent to one month’s rent (which in the DC area isn’t very cheap). And I don’t carry “pet health insurance.” Was it worth it? Of course.

I’ve explained how the health care market when it comes to demand for the care of one’s loved ones does not exactly follow economic theory, where one is supposed to compare marginal benefits with marginal cost. In the case of health care for our loved ones, we ask what is the marginal cost? And then, can I come up with that money? I suppose that implicitly, we are saying the marginal benefits to us are infinite or at least priceless.

And as long as there are rich enough people around who willingly pay for these health services–even pet health services–out of their own pockets, then reforming health care even in the most efficient ways will not necessarily reduce overall health care costs as much as we might hope. Health care is not like any other market. There will always be a ton of demand for health care even when the out-of-pocket prices aren’t held artificially low by subsidized health insurance.

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