Hansonian Medicine for Pets

Liran Einav, Amy Finkelstein, and Atul Gupta write

we document four similarities between American human healthcare spending and American pet healthcare spending: (i) rapid growth in spending as a share of GDP over the last two decades; (ii) a strong income-spending gradient; (iii) rapid growth in the employment of healthcare providers; and (iv) a similar propensity for high spending at the end of life in pets and humans.

Their findings are inconsistent with the view that our high spending on health care is driven by third-party payments or supply regulations. The findings are not inconsistent with what I suggested a decade ago in Crisis of Abundance, which is that medical treatment uses human and physical capital increasingly intensively. Also, they are not inconsistent with Robin Hanson’s view that medical treatment is something that we want others to get in order to show that we care.

5 thoughts on “Hansonian Medicine for Pets

  1. Nobody’s arguing that affluent societies won’t spend more on health care. But the absolute differences are certainly consistent with regulation and 3rd party payment being a major problem. We have, a couple of times, spent a ‘lot’ of money on surgery for our dogs. A ‘lot’ being ~$3000 for fairly complex surgery as well as several days of in-patient care during recovery. This is maybe 5% of what the same care would have cost for a person. Same drugs, same anesthesia, same level of surgical skill — all in all arguably better medical care than most of the world’s humans receive — but at 1/20th the cost.

  2. I’m not so sure that this helps the Hanson theory.

    You can’t really signal to your pet. And third parties (besides your kids) may not be so impressed that you spent 10k to keep the cat alive an extra 6 months.

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