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The options you have are doing nothing, treating the cancer, which can get expensive and there are no guarantee's and you may have to opt for amputation in the long run if it doesn't work or amputation which most dogs especially small breeds do very well with 3 legs. They tend to recover very quickly from the surgery and are running around soon like they still have all 4 legs. As long as your dog doesn't have any knee or severe hip problems, he will do fine. I have seen many dogs come thru the surgery and live long lives after. Some of the cons are, depending on the cancer, it coming back in another area, post surgically, the amputation site becoming infected but this can be prevented with good vet followup care. Here is some other info and pro's and cons of amputation and some treatments if it happens to be Osteosarcoma which is one of the more common bone cancers:
Amputation of the Limb: Removal of the affected limb resolves the pain in 100% of cases. Unfortunately, many people are reluctant to have this procedure performed due to misconceptions.
Limb-sparing Surgery: Limb-sparing techniques developed for humans have been adapted for dogs. To spare the limb (and thus avoid amputation), the tumorous bone is removed and either replaced by a bone graft from a bone bank or the remaining bone can be re-grown via a new technique called bone transport osteogenesis. The joint nearest the tumor is fused (i.e., fixed in one position and cannot be flexed or extended.)
Radiotherapy for Pain Control: Radiation doses can be applied to the tumor in three doses (the first two doses 1 week apart, the second two doses 2 weeks apart.) Improved limb function is usually evident within the first 3 weeks and typically lasts 4 months. (Our local oncologists report a range of 0 to 19 months.) When pain returns, radiation can be re-administered for further pain relief if deemed appropriate based on the stage of the cancer at that time.
Drugs: Analgesic medications such as carprofen, etodolac, aspirin, butorphanol, and fentanyl patches are all available but, unfortunately, they are no match for the pain involved in what amounts to a slowly exploding bone. These medications may be palliative at some stage but generally do not provide meaningful pain relief long term.
How Do we Treat the Cancer?
Osteosarcoma is unfortunately a fast spreading tumor. By the time the tumor is found in the limb, it is considered to have already spread. Osteosarcoma spreads to the lung in a malignant process called metastasis. Prognosis is substantially worse if the tumor spread is actually visible on radiographs in the chest so if chemotherapy is being contemplated, it is important to have chest radiographs taken.
Cisplatin (given IV every 3 to 4 weeks for 3 treatments)
Carboplatin (given by IV every 3 to 4 weeks for 4 treatments)
Doxorubicin (given IV every 2 weeks for 5 treatments)
Doxorubicin and Cisplatin in Combination (both given IV together every 3 weeks for four treatments)
Quoted from http://www.veterinarypartner.com/Content.plx?P=A&A=1035&S=1&SourceID=42
Hope this answers your questions!
Good Luck with your decision
It is very late, but, I want to help you, so please bear with me until tomorrow morning. I will tell you this now: bone cancer in dogs i susually fast, cruel and quick. Amputation is the best solution and will solve the problem.
I can appreciate your difficulty with the surgical procedure, but this is not a time for 'anthropomorphism", (attribution of human feelings). It is our job as pet owners to protect/care for them.
You ma want to get a second opinion to feel better, but, i would advise you to do it within a day, (I expect that your vet wants to perform the SX. as soon as possible).
I will write more tomorrow.
I have nothing further to add to Dr. Vamikias' advice, other than to encourage you once again, to act quickly, (you do not mention how quickly this problem appeared, nor if it is getting worse daily).
The best of luck to you and your pet.