business news in context, analysis with attitude

Time has a piece about in-store health clinics, and frames the growth of this health care option in some fairly persuasive terms:

“For all the complexities of the U.S. health-care crisis, most Americans experience the problem in a straightforward way: it's just too hard to schedule face time with your family doctor, and it costs too much when you finally get in the door. Of the approximately 1 million physicians working in the U.S., just 30% provide primary care. If you do get an appointment during the week, you'll probably have to take off time from work and carve out at least a few hours to sit in a waiting room. And if you get sick on a weekend, good luck.

“That, of course, is assuming that you have a doctor in the first place, not a given in a country where up to 50 million people lack health insurance. Even for the insured, ever changing corporate health plans may mean that a physician you see one year is not available to you the next. In times of illness, more and more people just show up in emergency rooms, which increases crowding and slashes revenues as bills to the uninsured go unpaid. In the past 13 years, at least 190 ERs have responded by shutting their doors.

“Enter the retail health clinic. In the past decade, more and more pharmacies like CVS and Walgreens, supermarkets such as Kroger and Publix and big-box stores like Wal-Mart have made space for clinics that treat minor ailments, administer vaccines and examine kids who need medical forms to enroll in camp. In those nine years, storefront clinics have logged at least 3.4 million visits. Today there are about 1,200 such clinics, pulling in some $550 million in annual revenue, by one estimate. Doctors, worried that the clinics will dig into their bottom line, are resisting the trend, but it's hard to argue that the innovation wasn't needed … Family doctors…argue that retail clinics undercut the concept of a ‘medical home,’ a care provider who knows your history and can act as a director for all your medical needs. The clinics counter that with as many as 60% of their patients reporting that they don't have a primary-care provider, there's not much to undercut.”
KC's View:
When I read the Time description of traditional health care systems, it just seems so obvious that the model is broken in so many ways.

Incidentally, there was a great op-ed piece written last week in the Wall Street Journal by Safeway chairman/CEO/president Steve Burd, who addressed the broader health care issue. He wrote, in part:

“At Safeway we believe that well-designed health-care reform, utilizing market-based solutions, can ultimately reduce our nation's health-care bill by 40%. The key to achieving these savings is health-care plans that reward healthy behavior. As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year. The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.

“Safeway's plan capitalizes on two key insights gained in 2005. The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.

“As much as we would like to take credit for being a health-care innovator, Safeway has done nothing more than borrow from the well-tested automobile insurance model. For decades, driving behavior has been correlated with accident risk and has therefore translated into premium differences among drivers. Stated somewhat differently, the auto-insurance industry has long recognized the role of personal responsibility. As a result, bad behaviors (like speeding, tickets for failure to follow the rules of the road, and frequency of accidents) are considered when establishing insurance premiums. Bad driver premiums are not subsidized by the good driver premiums.”

The Safeway argument seems to be that bad health is largely preventable, that good health ought to be rewarded, and that as a culture we need to put systems in place that allow people to make better decisions and be more pro-active about their personal well-being.

(I wonder why Safeway hasn’t gotten into the in-store health clinic business? It would seem to be a perfect fit…but maybe there’s something I’m not seeing.)

Burd’s argument is compelling. It emphasizes personal responsibility, but seems to put into place the infrastructure necessary to support positive behavior and good decisions.

And helps to fix a system that seems to be broken.