The $20,000 Pet

by Nancy Keates, published December 22, 2010, Smart Money

For Mary Cotter, the first sign of concern came when her 7-year-old, Logan, appeared dizzy. His regular doctor said everything was fine, but Cotter insisted Logan be seen by a neurologist, who after an MRI found a tumor in his inner ear. An operation followed, and for the next month Cotter took Logan on a four-hour round-trip trek every day from her home in Ledyard, Conn., to a specialty hospital in Boston for radiation therapy.

A new CT scanner at New York's Animal Medical Center boasts shorter scan time and higher-quality images.

The total bill for the tests, blood work, surgery and radiation came to $14,000 — not surprising in this age of sky-high medical costs. Except for one thing. Logan is a golden retriever. After another surgery for an unrelated illness, the total cost of Logan's care is approaching $20,000. Today Logan is healthy, but he has a new nickname: "20K."

It's no secret that Americans love their pets. But these days, all that love is leading to an unprecedented level of expense for millions of owners, who are only beginning to understand the pet-world concept of sticker shock. Caught up in a wave of new medical options and lured by an increasingly sophisticated cadre of veterinarians, pet owners across the country are forking over thousands — and even tens of thousands — of dollars to treat illnesses that would have gone undiagnosed or untreated just a few years ago. And then doing it again if they have to. Of course, pet owners and most vets have the animals' best interest in mind. But that doesn't make it any easier: With health insurance covering the humans in many families, it's not unusual for pet owners to spend far more money on health care for their cats and dogs than for their sons and daughters. Even the Great Recession failed to take a bite out of Fido's health care tab. According to a report by market-research company Packaged Facts, Americans spent $20 billion on veterinary bills in 2010 — an 8.5% increase from a year earlier and more than double the amount spent just a decade ago.

Much of that money is being spent on new medical technology. With some of the advances in human health care spreading to the animal kingdom, pet owners have many more options for treatment—and many more chances to fork over money to cure their pets or at least prolong their pets' lives. Dogs and cats can have pacemakers implanted at a cost of $1,000 to $1,500, while pets with kidney failure can get a kidney-clearing procedure that runs $20,000 to $25,000 for just the first few weeks. Not long ago a vet would most likely have recommended euthanasia for a cat or dog diagnosed with cancer or another serious illness. Today high-tech procedures and equipment, such as chemotherapy and MRIs — and yes, CAT scans — allow for better diagnosis and more-advanced treatment.

They also require highly trained specialists. In the past three years, the percentage of veterinarians who are board certified for small-animal surgery has more than doubled, according to the American Veterinary Medical Association. Until the late 1980s, there were no board-certified veterinary oncologists, for a simple reason: There was no program for certification. Now vet schools offer oncology-specialization programs and have full-fledged cancer centers, while dozens of private centers have opened across the country with board-certified staff. At the Animal Cancer Center at Colorado State University, 14 veterinarians specialize in medical, surgical and radiation oncology. They're supported by a full nursing staff, residents and even a clinical-trials team focusing on diseases from canine lymphoma to feline sarcoma. Add it all up and "it's a revolution," says Stephen Withrow, the center's associate


Read more: The $20,000 Pet - SmartMoney.com http://www.smartmoney.com/personal-finance/health-care/the-20000-pet-1292884111206/#ixzz19yyRj7HW

Pet Insurance in North America, 4th Edition—Blog Entry



David Lummis



As the pet market analyst for Packaged Facts, I started covering this market in 2003.  Wow.  Talk about a market that’s come a long way—and yet still has a long way to go.  Back in 2000, the market was valued at under $50 million, with almost all of those sales coming from a single company, Veterinary Pet Insurance (which founded the market in 1980).  In the fourth edition of our report, released on Monday October 18, 2010, sales were at $354 million, with a dozen companies established in the North American market.

If that sounds like phenomenal 10-year growth it’s because it is, at approximately 600%.  But get this:  This figure still represents less than 1% of the 180 million-plus dogs and cats in North America.  That means (doing a little very rough math) that if the level rises to 10%, we’ll be looking at a market worth $3.5 billion, and with 25% of dogs and cats insured, a market worth nearly $9 billion.  This isn’t out of the question, since about one-quarter and one-half of dogs and cats are insured in the United Kingdom and Sweden, respectively.  There’s a lot going in the North American market right now too, including major insurance companies weighing in as underwriters, such as Aon with Healthy Paws, Aetna with Pets Best, and Berkshire Hathaway subsidiary Central States Indemnity Co. of Omaha with PurinaCare.

Still, marketers have their work cut out for them in dealing with the lingering impact of the recession.  In Packaged Facts’ September 2010 consumer survey, among those who did not have pet insurance, 42% cited as the reason “don’t want additional bill” and 37% said they “don’t want to spend the money for it.”  With economic recovery slow at best, this reticence does not seem likely to change overnight.  Packaged Facts does not expect consumers to throw open their pocketbooks any time soon, but rather to continue to practice moderation.  Thus value will remain a major marketing theme in 2011 and 2012 as pet insurance companies strive to communicate the benefits of their products and keep the pricing options as attractive as possible.  Expect to see more zero- (and other very low) deductible plans, following in the footsteps of Trupanion and, more recently, VPI (via its new Feline Select Plan).

That said, the level of competitive activity is at an all-time high, and with so many irons in the fire I’m not ruling out a “big boom” in the North American pet insurance market.  Such growth will, however, depend on the ability of marketers to move from what appears to be a stage of market cannibalization (and perhaps some retrenchment, even) to one of more uniform growth via an expanded consumer base.  One possible catalyst to higher-level growth would be the entry into the market of another mega-retailer, such as PetSmart (via its Banfield units) or Walmart, the latter of which is reportedly planning a Canadian launch as a Western Financial white label (although neither company could confirm this).

One thing’s for sure, given the currently very low level of pet insurance penetration and very high level of competitive activity—about a half dozen companies have entered the field just since 2004, including PetFirst, Pets Best, Embrace, Fetch/Petplan USA, Trupanion, PurinaCare, and Healthy Paws—the North American pet insurance party is likely just getting started.

~David Lummis, Senior Pet Market Analyst, Packaged Facts

Pet Supplies and Pet Care Products: The U.S. Market and a Global Perspective

Even as the economic picture improves, consumers remain cautious about spending, including in terms of the pet products they buy. Having lived up to its “recession-resistant” reputation once again, the business therefore continues to face challenges that have retailers, marketers and product developers relying more heavily than ever before on the all-important notion of pets as family. Accordingly, themes including health, function, comfort, safety, gifting, travel, and yes pet pampering are all weighing heavily on the value scale as market participants look to strike the perfect balance in pet categories across the board.

Tapping into Packaged Facts’ extensive pet market report collection and analyst expertise, Pet Supplies and Pet Care Products in the U.S., 8th Edition: Pet Health and Pampering: The New Value Equation provides detailed market breakouts and insights not available elsewhere. Covering non-food pet supplies of all types and for all companion animal types, the report examines trends in flea/tick care products, cat litter, toys, rawhide chews, bedding, grooming products, supplements, clean-up products and many other product segments. Using 2009 as the base year, it charts sales since 2005 and forecasts sales through 2014; breaks the market out by animal type and product category in both the mass-market and pet specialty channels; presents dollar sales and market share for leading marketers and brands; analyzes competitive strategies and shifts; profiles top companies and market innovators; analyzes new product trends; and provides demographic and psychographic profiles of product purchasers.

More Information>>

U.S. Pet Market Outlook 2010-2011: Tapping into Post-Recession Pet Parent Spending

As the U.S. economy moves out of recession and into recovery, the purse strings of many pet parents will loosen, but shoppers will continue to demand greater value in the pet products and services they purchase as well as from the channels they shop. U.S. Pet Market Outlook 2010-2011: Tapping into Post-Recession Pet Parent Spending provides essential insights into the U.S. pet market overall as well as each of its four core categories: veterinary services, pet food, non-food pet supplies, and non-medical pet services (grooming, boarding, training, etc.).

Benefiting from many current trends and “future factors,” the market will rise from $53 billion in 2009 to over $70 billion in 2014, the report forecasts, with strong demand for products and services that both enhance pet health and pamper lifting many boats as pent-up pet parent demand begins to kick in during 2010.

Continuing the market tracking and forecasting of the previous edition of Packaged Facts’ annual report (see U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in Challenging Economic Times— http://www.packagedfacts.com/prod-toc/Pet-Outlook-Surviving-2154192/), the 2010-2011 edition projects sales, market growth drivers, and competitive and marketing opportunities. In a new focus discussion, it details...

More Information>>