Whenever I have dinner with friends, the conversation always ends up on one of three topics: how hard dating is, the hunt for affordable housing, or an update on everyone’s pets. The last on that list includes cute photos and veterinarian updates. I love hearing about my friends’ cats and dogs. But I also have to admit that I just don’t get it. I don’t have a pet. I never have. (We won’t discuss the ill-fated caterpillar in elementary school.)
I’m in the minority: Over half of American households have pets. Which means that over half of American households have also seen the cost of pet care go up in recent years.
Helaine Olen is the proud pet parent of a Havanese poodle mix named Barney Rubble. She’s also the managing editor at the American Economic Liberties Project, an antitrust organization, and she says people often aren’t prepared for how expensive it can get.
Some of it is inflation, Olen says, but veterinary care is a major factor. “The same medical advances that have kept us alive longer and we consider miracles — whether it’s cancer drugs or stem cell therapies or various pharmaceuticals — the same is true for your cats and dogs,” Olen says.
Decades ago, a cat having an MRI was unheard of; now, it’s common. But it’s not just expanded access and improved technology that’s driving prices up. Olen says that who’s behind that healthcare is a factor. “Big corporations and private equity have seen all of this, know that people say they will do anything for their pets, know that they think of their pets as children, and they have rushed into the sector,” she told Vox.
So how did private equity get involved in the lives of our pets? And what happens when the prices keep climbing? We discuss that and more on the latest episode of Explain It to Me, Vox’s weekly call-in podcast.
Below is an excerpt of 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’d like to submit a question, send an email to askvox@vox.com or call 1-800-618-8545.
What kind of costs are we talking about?
When your pet is young, you’re probably spending several hundred dollars a year for various vaccines, spay and neuter, annual checkups. But the real costs start coming in as they get older and they need maintenance.
For tooth cleaning, pets need to be put under anesthesia. You’ll spend a minimum of $1,000. That will be even higher if a pet’s tooth has to be removed.
I’ve spoken to people whose pets have back legs that have collapsed or disc herniations. You can easily be out over $10,000 on a surgery. You can easily spend four figures on a 24-hour overnight. I spoke to somebody who was quoted $3,500 a night for just an observational overnight.
You mentioned that some of this comes down to who owns pet clinics and how that’s changing. Who owns them now?
Traditionally, it was an independent practice. But in the past 10 to 15 years, big corporations and private equity have moved into the space. The largest owner of vets in the United States right now is a group called Mars. And if Mars sounds familiar to you, that’s Mars as in Skittles.
They own around 2,500 vets under the names of VCA, Banfield, and Blue Pearl. I’d say somewhere between a third and 50 percent of vet clinics are owned by corporations. It was 10 percent or less than 10 percent a little over a decade ago.
What caused this spike and why is a candy company behind it?
As people realize how much can be done to help their pets, the corporations and private equity basically saw what one analyst described as low risk, high reward. I’ve spoken to employees of some of the larger chains who have told me that prices went up routinely every six months or every nine months or once a year.
In Britain, there was a recent government investigation into all of this by the Competition and Markets Authority, their equivalent of the Federal Trade Commission. They determined that private equity and corporate ownership is responsible for a billion pounds spent on pets over a five-year period that otherwise wouldn’t have been spent, and that people were paying about 16 percent more at vets owned by large corporate outfits versus independent vets.
How are people paying for this if it’s so expensive?
I live in Los Angeles, and I wrote a piece for New York magazine a few months ago about all the people here who are now driving their pets down to Tijuana because it is so much less expensive down there.
Pet insurance is a very mixed bag. It is extremely expensive in many cases. It goes up at very high rates. My own pet insurance increased by 30 percent from last year to this year. And by the way, my dog Barney Rubble is 2 and a half years old.
Wow. He’s still so young.
He has had no issues that I am aware of that would account for a 30 percent increase.
The other thing with pet insurance, unlike human health insurance, is there is no preexisting [conditions] clause. I have lost count of the number of people I’ve interviewed over the years who discovered too late that their pet health insurer deemed something a preexisting condition.
What do people do when they get to the point where this costs too much?
In some cases, they run up debt. Buy now, pay later services are increasingly moving into the veterinary area as well.
In other cases, they surrender the animal. If you talk to people at shelters, they will say that they believe that part of the uptick they’ve gotten in surrendered animals has to do with the increase in costs of veterinary care.
I imagine that just feels like such an impossible choice, like choosing between this money you don’t have and the quality of life for something that you love.
The emotions are huge. This is in part why private equity and corporations have moved in: They know people are going to feel very emotional about their pets and that they’re going to want to do anything they can to keep them alive or keep them healthy or keep them pain-free, and that they will pay almost any price.
When my last dog was diagnosed with heart disease, I was determined to keep her going for a couple of years. I had her on one medication that cost $300 a month. I was like, “I can’t lose my Katie.”
The tragic thing about pets is they are both better than us — in my opinion — and they live shorter lives. You are going to lose your pet eventually. It’s just the most heartbreaking thing in the world.
