Have you been wondering recently why your veterinary care feels like it costs so much more than it used to? You are not alone.
I was digging into the inflation numbers over at the Bureau of Labor Statistics and I was fascinated by the difference between veterinary inflation (yes, they do track such a thing!) and the consumer price inflation.
For example (see graph below), if I look at January 2007 to March 2011 (just about as long as we've been selling pet insurance policies), while my wages went up 10% over that time (yay!), my vet bills went up 25% in the same period (ouch!). Vet bills are definitely taking up more of a bite out of my free cash than they used to.
You can clearly see the impact of the Great Recession in the second half of 2008 in the CPI, with the year's inflation being practically zero (-0.1%); however, veterinary inflation chugged along at 7% that year and didn't slow down until 2009.
Another point to note, the Consumer Price Index is defined as the change in the prices paid by urban consumers for a representative basket of goods and services and Veterinary Services are just a subset of those goods and services. The representative basket of goods is based on typical family spending in 2007/2008 so changes in the types of veterinary services (such as more TPLO surgeries or MRIs) are not reflected.
So chances are, as veterinary medicine has grown in the last 3 years, and more complex and more costly procedures are more common, your veterinary spending increases are even more than those shown above.
It's amazing we can afford our cats and dogs at all, don't you think?
If you are wondering what impact veterinary inflation has on pet insurance premiums, check out my blog post on how inflation and other factors affect pet insurance premiums using Trupanion as a case study.
Just for fun, here's another graph for 2001 - 2011. It really shows the bite into your household income over the last 10 years.
For the data hounds out there, you can find the data on the BLS website:
- CPI - All Items US City Average Seasonally Adjusted
- Veterinary Inflation - Veterinary Services US City Average Seasonally Adjusted