Pet Spending in 2024


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As prices rise, pet owners will budget for their pet’s health. Here’s how veterinary clinics can help create a toolbox to cover or offset the costs.

Groceries, gas, clothes, you name it – throughout 2023 and now into 2024, the cost of goods and services for everyday living has been rising to the point that consumers are feeling the squeeze, and having to make decisions on how best to mitigate those heftier price tags. That includes veterinary services.

Bureau of Labor Statistics data show that veterinary services cost 7.5% more in September 2023 than in September 2022, only a slight easing from the 8.8% price inflation in 2022, according to Packaged Facts. “Recent price inflation has therefore doubled compared with the 3%-4% annual increases at the beginning of the decade,” the research firm concluded.

What’s contributed to the rise? Ricky Walther, DVM, chief medical officer at Pawlicy Advisor, believes one reason is the cost of goods has gone up in human medicine, thus prices have risen for veterinarians because they use many of the same supplies. Veterinarians in turn have had to increase the prices of their services, leading to an overall bump in the cost of veterinary care.

Dr. Walther said he is curious to see what the tightening of discretionary income in the economy will do to the demand for veterinary services. Recent data from VetSource and the AVMA found that revenue was up slightly for veterinary services, but visits were down. “That tells you that most of those visits are costing more, but people are visiting the vet less,” he said. “Owners are a little more hesitant to want to come to the vet. They’re having to make more decisions about finances. Do they go in right away when they start to see an issue, or do they wait? People are taking their pets to the vet when they’re sick, but are they going for those more routine preventative screenings? That’s the piece I worry about with discretionary income.”

Indeed, affordability issues may help explain a current drop in veterinary services usage, according to Packaged Facts’ recently released Veterinary Services in the US: Competing for the Pet Care Customer. As of 2023, overall usage rates for veterinary services among dog- or cat-owning households are at 71%. That usage rate is down not only from a high of 85% during the core COVID-19 pandemic years, but from a pre-pandemic rate of 77% in early 2019.

Packaged Facts survey data show that millennials and Gen Zers, who in combination account for nearly half of dog or cat owners, are under pressure from pet-keeping and pet health care expenses. Millennials/Gen Z pet parents are more likely than their baby boomer counterparts to be strongly concerned about the affordability of emergency healthcare (at 53% to 43%, respectively), the cost of prescription pet medications (42% vs. 27%), and the affordability of routine pet healthcare (39% vs. 31%).

“As is also the case in the human healthcare market, many pet owners have had to borrow money to pay for pet care, to decline pet healthcare treatment because they could not afford it, or to resort to payday loans or other loan alternatives to cover veterinary bills,” Packaged Facts reported.

Man paying bill at Veterinary clinic

Talking finances

Veterinary medicine as a profession needs to be better at talking about the financial responsibility and reality of pet ownership, Dr. Walther said. “We don’t always do a great job at that first initial visit, where someone’s just rescued a puppy or a kitten, explaining to them what is possible.”

Pet owners need to know what they may have to plan for in the future. “The best tool we have for that is our time,” Dr. Walther said. Having a conversation early is key to making a pet owner aware at an earlier stage (like when they are just getting into pet ownership) that veterinary care does indeed cost money, and they should come up with a plan for it.

A conversation with the pet owner is one tool that the veterinarian can use. Clinics can also recommend pet owners look into pet insurance policies for illnesses and injuries, wellness plans to cover preventive services and vaccines, and veterinary financing options for more expensive services and surgeries. “These all can work really well together in conjunction,” Dr. Walther said.

Historically, veterinary medicine has been a little apprehensive about pet insurance. But that seems to be changing, according to a recent survey. Pawlicy Advisor, a pet insurance marketplace, has published a white paper featuring a survey conducted in conjunction with the American Animal Hospital Association to study the changing perspectives among veterinary professionals regarding the benefits of pet insurance in their practice. Survey data from Pawlicy Advisor/AAHA on pet insurance perceptions reveals that veterinary respondents agree pet insurance promotes practice growth. The statement earned an average score of 4.13 out of 5, indicating the veterinary respondents agree the product improves client satisfaction and loyalty, leading to increased business opportunities.

“Clients who have great veterinary experiences with pet insurance are more likely to recommend other pet owners, increasing word-of-mouth client referrals and brand affinity,” Pawlicy Advisor noted. “There was a statistical finding that nonowners agree with this statement more strongly than owners.”

Perhaps the most positive finding of the survey was that 56.1% of veterinary professionals view pet insurance as a positive element for both their clinic and clients, Dr. Walther said. In fact, as many as 44.2% of veterinary professionals discuss pet insurance either often or very often, while less than 3% of respondents say they never discuss the topic in the office. “I also found it interesting that about 92% of the people we surveyed said pet insurance leads to better care,” Dr. Walther said. “So in their mind they felt like that pet insurance was able to lead to better care.

Pet insurance’s ability to reduce the stress of financial decisions related to pet health was another key finding. Of the survey respondents, 89% felt that it reduced the stress and anxiety around the cost of care. “So when they had pet owners that had insurance, they felt like that stress and anxiety was lessoned,” Dr. Walther said. “We’re an extremely empathetic profession. We want to help pets. And we want to help owners. When you put finances in the middle of that it can be really challenging. Pet insurance is one way to break down that barrier. Is pet insurance for every owner? Not necessarily, but it’s still one of the things we can pull out of our toolbox to help owners that are wanting to be proactive about that care, and figure out how to have that conversation.”

Pet owners need to know ahead of time that even with resources like pet insurance, they will still have to come out of pocket. “I always like to have additional conversations with owners around what that means,” said Dr. Walther. “At Pawlicy Advisor, we help to educate owners on what pet insurance means. What is the deductible? What is the reimbursement percentage? What part are you paying, versus what part is the insurance paying? And then talking about credit-based and payment plan solutions that can be really great resources a clinic can offer to help offset the cost of care.”


The cost-of-care toolbox

  • An upfront conversation between the veterinarian and the pet owner about realistic expectations on what it will cost to keep a pet healthy
  • Pet insurance to cover illnesses, diseases and injuries
  • Pet wellness plans to handle routine care, preventives and vaccines
  • CareCredit options in case expenses get to high to cover in one payment


Survey says …

A 2023 nationwide survey commissioned by PetSmart Charities found that about 45% of pet parents say the cost of a visit has kept them from taking their pet to the veterinarian. Nearly half of respondents feel they should be taking their pets to the veterinarian more often than they do. Nearly 30% of pet parents say they would struggle to pay a veterinary bill of $500 or more. About half of respondents said they would ask friends or family for money for a life-saving procedure, and more than one-third would take out a personal bank loan to cover the costs.


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