Health Insurance: Now For Your Dog, Or Hedgehog
The operating room is filled with beeping equipment. On the table lies one of the millions of this country's uninsured.
But we're not talking about an uninsured person here. No, we're talking about an uninsured dog.
This is his second knee surgery, at a cost of $3,500 per knee.
In the next room at Chesapeake Veterinary Surgical Specialists in Annapolis, Md., a Weimaraner has been knocked out and is being prepped for surgery. Actually, he's being vacuumed. It turns out that when a dog is unconscious, you can vacuum him. Down the hall, dogs with cancer are getting chemotherapy.
The knee surgeon, Dr. Darren Roa, says that not long ago, animal clinics on this scale just did not exist. "The number of surgeons and internists and cardiologists and large megapractices like this across the country has gotten astronomical," Roa says. "Twenty-five years ago you couldn't find a surgeon without a university. And now there's thousands of them."
Pet health care is now crossing the same magic threshold that human health care crossed decades ago: It's getting good, and it's getting expensive. Veterinary bills are becoming large enough that people are starting to think it would be nice to have someone else pay for them — like an insurer.
As with pet owners nationwide, only a handful of the people who come to this hospital carry insurance for their critters. But the business is growing rapidly, at a pace of 15 or 20 percent a year.
It's an open question whether pet health care will also mimic the problems of human care, with costs that keep climbing and lots of waste. The problem with insurance, economists say, is that it separates people from the money they're spending. Why not get that extra medical test, if it's covered by insurance?
And from a veterinarian's perspective, health insurance for pets means more money.
A Kitten Named Minnie
Susan Markham is one small force behind the growth in pet health insurance. Markham works for Veterinary Pet Insurance, the largest company of its kind in the country.
Markham recently made her pitch at a veterinary hospital outside Atlanta. The staff sat around, some in scrubs, listening politely and eating barbecue the insurance company paid for.
Markham could tell her audience that pet owners who get insurance end up spending twice as much on health care. But she doesn't, because she's got a much more powerful weapon — kittens, in particular one named Minnie.
"A young mother and her 8-year-old son brought Minnie in," Markham tells her audience. "He was crying. He had stepped on Minnie's leg and it was fractured. And Dr. McCarthy said, 'Good news. She'll go home with you tomorrow. You won't notice that anything has happened to her six months from now. She'll heal up and be just fine.' But sadly, that young mother declined that treatment. Who can tell me why she might have done that?"
The audience guesses correctly. Minnie's owner felt that she couldn't afford to get the kitten's leg fixed and instead took Minnie to be euthanized.
Veterinarians are animal people, and they hate having to kill an animal they can fix.
When she's finished, Markham leaves some pet insurance brochures and giveaway pens on the table.
Harriet The Hedgehog
The upside of any kind of insurance, of course, is that it saves lives. If you're trying to decide how you feel about insurance for pets, you might consider the experience of someone who has purchased it.
Kristen Zorbini Bongard of Janesville, Wis., got coverage for her hedgehog, Harriet, that came in handy this year. "We first noticed that something was up with Harriet in March," Zorbini Bongard says. "I was sort of doing some snuggle time with Harriet and noticed that she had a lump."
A test at vet's office showed the lump was cancerous. Zorbini Bongard scheduled a date for surgery. The lump popped right out. But there were complications.
Harriet ripped open her sutures, so the incision had to be stapled shut and a second surgery ensued. But sometimes, Harriet still scratched at that spot. She ended up on anti-psychotics — the only hedgehog whom Zorbini Bongard knows has ever been prescribed them.
If that level of treatment for a hedgehog seems crazy to you, then you don't know Kristen Zorbini Bongard, and you don't know hedgehogs. One of the many great things about hedgehogs, Zorbini Bongard will tell you, is that they can roll up into little balls.
"It's adorable," she says. "All of a sudden you see a nose pop out, and two eyes, and maybe the front two paws, and then some ears. It's a very cute thing to watch."
Health insurance for that bundle of cuteness costs about $80 a year. Harriet's total bills came to $2,700. The insurance covered most of the early stuff. In the end, Zorbini Bongard and her husband had to pay about $1,900.
Zorbini Bongard says that they're not rich and that, like a lot of people, they've been cutting back. She says insurance changed things for her, in that she spent more on Harriet's care than she would have otherwise. On the other hand, Harriet's alive.
An Economist's View
So, what would an economist make of all this? Tim Harford, who writes a column for the Financial Times called "Dear Economist," says the insurance for pets is both good and bad. It's clearly providing a service. But the nature of insurance, he explains, is to create distance between you and the cost of services. It's no comfort to him that veterinarians aren't necessarily driven by a desire for profit.
"Human doctors are reasonable people as well," Harford says. "They're not just in it for the money. I'm sure the money is nice. They also want to make people better. But we know that doctors and vets, too, are constantly making these marginal decisions. And if you've got a situation where you're going to make more money ordering tests, the dog's not going to suffer. There's a small chance the dog might even benefit. It's the insurance company that's going to pick up the tab."
He argues that leads to a decision based on "Why not?"
Zorbini Bongard agrees that insurance could lead to wasteful tests — for certain pets. "I can see how that could be, especially for dogs or cats," she says. "But I guess for me as a hedgehog owner, there's not that much to do." She and her husband pay for the anti-psychotics themselves, and they're willing to chuckle at themselves for doing it.
Harford says it's unlikely that pet insurance will end up with the same problems as human health insurance. The way a lot of plans are set up now, pet owners typically have to pay a substantial portion of the bill. That means they're likely to think twice before getting a test or procedure done.
There's another difference. Pet owners generally have a limit on what they will spend. But for human health care, when our own lives are in danger, or our wife's or our husband's or our kids', we want the insurance company to pull up to the hospital — with a huge truck full of money.
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RENEE MONTAGNE, host:
Our Planet Money team is looking into health insurance this week, and NPRs David Kestenbaum found a new sector where insurance is just taking off and growing rapidly.
(Soundbite of beeps)
DAVID KESTENBAUM: If you cant tell by all the beeps, this is an operating room. On the table, one of the millions of this countrys uninsured uninsured dogs. For this dog its his second knee surgery. Cost about $3,500 per knee.
This is Chesapeake Veterinary Surgical Specialists in Annapolis, Maryland. In the next room a Weimaraner has been knocked out and is being prepped for surgery. Actually, he's being vacuumed. It turns out when a dog is unconscious, you can vacuum him. Down the hall, dogs with cancer are getting chemotherapy.
And the knee surgeon, Dr. Darren Roa, says not long ago places like this just did not exist.
Dr. DARREN ROA (Veterinarian): The number of surgeons and internists and cardiologists and large mega-practices like this across the country has gotten astronomical. Twenty-five years ago you couldn't find a surgeon without a university. And now there's thousands of them.
KESTENBAUM: So pet health care is crossing that magic threshold that human health care crossed long ago: It's getting good, and it's getting expensive. Only a handful of pet owners that come here have pet insurance. Nationwide its a few percent or so. But the business is growing rapidly, at a pace of 15 or 20 percent a year.
And you wonder if pet health care is about to import one of the major problems with human health care. Costs that go up and up, lots of waste. Because the thing about insurance is once you have it, why not get that extra test done? Its covered. And for the veterinarians, its going to make them more money.
Ms. SUSAN MARKHAM (Veterinary Pet Insurance): Ready for me to go? Good. A big fat thank you from me and VPI for all you do for pets and their peeps every day.
KESTENBAUM: This is Susan Markham who works for Veterinary Pet Insurance, the largest pet insurance company in the country. I tagged along when she made the pitch at a veterinary hospital outside of Atlanta. The staff sat around listening politely, some in scrubs, eating barbecue that the pet insurance company paid for.
She could tell them pet owners who get insurance end up spending twice as much on health care. But she doesn't. She has a much more powerful weapon kittens, a particular kitten named Minnie.
Ms. MARKHAM: Years ago, a young mother and her eight-year-old son brought Minnie in. He was crying. He had stepped on Minnie's leg and it was fractured. And Dr. McCarthy said, Good news, she'll go home with you tomorrow. You won't notice that anything has happened to her six months from now. She'll heal up and be just fine. But sadly, that young mother declined that treatment. Who can tell me why she might have done that?
KESTENBAUM: The story has a bad ending. The owner felt like she couldn't afford to get Minnies leg fixed and overnight took Minnie to be euthanized.
Veterinarians are animal people, and one thing they hate possibly more than anything else is having to kill an animal they can fix, which of course is the upside of insurance: it saves lives.
If youre trying to figure out how you feel about this whole thing, its time to meet someone who actually has pet insurance.
Ms. KRISTEN ZORBINI BONGARD (Pet Insurance Owner): We first noticed that something was up with Harriet in March.
KESTENBAUM: This is Kristen Zorbini Bongard. She lives in Janesville, Wisconsin.
Ms. ZORBINI BONGARD: I was sort of doing some snuggle time with Harriet and noticed that she had a lump.
KESTENBAUM: Before we go any further into the surgeries and the tests, I have to tell you that Harriet is a hedgehog a hedgehog with health insurance. If that seems crazy to you, you do not know Kristen and you do not know hedgehogs. One of the many great things about hedgehogs, she says, is that they can roll up into little balls.
Ms. ZORBINI BONGARD: It's adorable. All of a sudden you see a nose pop out, and two eyes, and maybe the front two paws, and then some ears. It's a very cute thing to watch.
KESTENBAUM: So Harriet had a lump and Kristen brought her into the vet. A test showed the lump was cancerous. Kristen scheduled the date for surgery, the lump came right out, but there were complications. Harriet ripped open her sutures, she had to be stapled shut, and there was a second surgery. And Harriet sometimes still scratched at that spot.
Ms. ZORBINI BONGARD: And so weve had to do some experimenting on her. Shes on some hedgehog and I say hedgehog loosely anti-psychotics.
KESTENBAUM: Meaning theyre not they werent developed for hedgehogs.
Ms. ZORBINI BONGARD: Oh no. And we dont actually know that any other hedgehogs have ever been prescribed anti-psychotics.
KESTENBAUM: Health insurance for a hedgehog costs about $80 a year. Harriet's total bills came to $2,700. The insurance covered most of the early stuff. But in the end Kristen and her husband had to pay about $1,900.
Kristen says theyre not rich. Like a lot of people, they've been cutting back. And she says insurance did change things for her. She spent more on Harriet than she would have without insurance. On the other hand, Harriet's alive.
I wish you had Harriet there. You could bring her up to the phone.
Ms. ZORBINI BONGARD: Oh yeah.
(Soundbite of laughter)
Ms. ZORBINI BONGARD: I could mimic the noise she would make.
KESTENBAUM: Go ahead.
(Soundbite of puffing)
Ms. ZORBINI BONGARD: Thats pretty much it.
KESTENBAUM: To find out what an economist thought of all this, I talked to Tim Harford. He writes a column for the Financial Times called Dear Economist. Okay, Dear Economist, I have a letter that I wrote out here to you.
Mr. TIM HARFORD (Economist): Sure.
KESTENBAUM: Dear Economist: Is health insurance for pets good or bad?
Mr. TIM HARFORD: Like any good economist, Im going to say yes and no. Hows that?
KESTENBAUM: The problem, he says, with pet insurance, human health insurance, theyre all insurance. And insurance separates you from the money youre spending. And he didnt seem consoled by the idea that veterinarians arent driven by profit.
Mr. HARFORD: Well, thats true, but human doctors are reasonable people as well. They're not just in it for the money. I'm sure the money is nice. But they also want to make people better. But we know that doctors are constantly -and vets too - are constantly making these marginal decisions. And if you've got a situation where you're going to make more money ordering tests, the dog's not going to suffer, you know, there's a small chance the dog might even benefit, and it's the insurance company that's going to pick up the tab, well, why not? Why not?
KESTENBAUM: I asked Kristen about the downside of insurance, that it can lead to all kinds of unnecessary tests and procedures. She agreed it could be a problem for certain pets.
Ms. ZORBINI BONGARD: I can see how that could be, especially for dogs or cats. But you know, I guess for me as a hedgehog owner, there's just not that much to do.
KESTENBAUM: Harriet is on anti-psychotics.
Ms. ZORBINI BONGARD: Yes. Yeah, she is. Thats not covered by insurance though. We pay for that out of pocket. I know shes on anti-psychotics. Oh my gosh, I know.
KESTENBAUM: Tim Harford says it's unlikely pet insurance will have the same problems that human health insurance does. The way a lot of plans are set up now, pet owners have to pay a part of the bill, which means they're likely to think twice before getting a test or a procedure done.
And there's another difference. Pet owners, they generally have a limit on what they will spend. But for human health care, when our own lives are in danger, or our wives or our husbands or our kids', we want that insurance company to pull up to the hospital with a huge truck full of money.
David Kestenbaum, NPR News. Transcript provided by NPR, Copyright National Public Radio.
