Wal-Mart, Redi-Clinic, and the Healtcare "Crisis"
Yesterday's Wall Street Journal has an excellent article about some increasingly-attractive private-sector alternatives to hospital-based health care.
It's Friday evening and you suspect that your child might have strep throat or a worsening ear infection. Do you bundle him up and wait half the night in an emergency room? Or do you suffer through the weekend and hope that you can get an appointment with your pediatrician on Monday -- taking time off your job to drive across town for another wait in the doctor's office?Every parent has faced this dilemma. But now there are new options, courtesy of the competitive marketplace. You might instead be able to take a quick trip on Friday night to a RediClinic in the nearby Wal-Mart or a MinuteClinic at CVS, where you will be seen by a nurse practitioner within 15 minutes, most likely getting a prescription that you can have filled right there. Cost of the visit? Generally between $40 and $60.
These new retail health clinics are opening in big box stores and local pharmacies around the country to treat common maladies at prices lower than a typical doctor's visit and much lower than the emergency room. No appointment necessary. Open daytime, evenings and weekends. Most take insurance.
While the article goes on to describe many of the benefits of this new, tightly-focussed business model, it also explicitly recognizes many of its limitations, limitations that critics have already and will continue to underscore Critics of engaging private competition in the health sector will argue that the vast majority of health-care dollars are spent on a relatively small percentage of patients with serious illness, especially those with multiple chronic conditions.
No one should be mistaken about the fact that drive-in health clinics will cure the country's health care problems. But there is promise here, the kind that is latent in all innovative business concepts, the kind which occasionally manifests itself in changes that few would originally have thought possible, the kind that sometimes upsets incumbents apple carts and changes forever customers' perceptions of what is and ought to be possible:
This industry is in its infancy and will hardly register in our nation's $2 trillion-plus health care bill. But just as Nucor overturned the steelmaking industry with a faster-better-cheaper way of making low-end rebar, these limited service clinics could be the disruptive innovator in our health-care system. Package pricing for more complex treatments, like knee replacement surgery, may not be far behind.Government can get in the way, of course, with protectionist policies that throw up more regulatory barriers to entry. But retail clinics could be just the beginning of consumer-friendly innovations ... With many congressional leaders hostile to free-market solutions, these policy changes are unlikely in the next two years. But as consumers get a taste of what consumer-friendly health care is like, they may well demand that the top-down, centralized health-care delivery of the 20th century give way to a system more in tune with the demands of 21st-century consumers seeking greater value and efficiency.
Again, no one should be misled about just how far away broad-based, consumer-friendly health care is, let alone how marginalized any market-based solutions are in the debate about universal access. All the same, no one should discount the expertise now being developed by discount chains and other mass market retailers. It wouldn't be the first or the last time innovations that revolutionized an industry came from outside of it, as any recording industry executive can surely testify.
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