Monday, June 22, 2009

Retail health clinics

Mark Perry linked to this Time story about the emergence of retail health clinics, of which there are now about 1,200. A few interesting lessons can be found in the story. One is that people are willing to pay for preventative care:
Among the new ranks of providers filling the void is the Little Clinic, a company that operates 99 in-store clinics in nine states. The Little Clinic experience is an unabashedly retail one. You can get in and out in 15 minutes during hours that extend into evenings and weekends. Prices are clearly displayed, as is the menu of ills the clinic can address, such as strep throat, sinus infections and flu. There are also preventive services like cholesterol and hypertension screening.
This shouldn't come as too much of a surprise. While some people argue that public health insurance is needed because people otherwise won't pay for preventative services and then wait until illness has struck to seek treatment I have never understood this line of reasoning. After all, people are usually willing to pay for an oil change to make sure that their car doesn't break down -- would they not also be willing to pay for a checkup to make sure their body isn't about to break down? Of course, some people won't go to checkups, but I suspect that it is more laziness than the cost that deters them.

Another insight from the article is that competition works:
For basic acute ailments, an uninsured person will spend about $60 (without tests) at a retail clinic, compared with $60 to $110 at a doctor's office or hundreds more in an ER. And while the retail-clinic model launched on a cash-only basis, most outlets now accept insurance, used by about two-thirds of patients, according to a study by the Rand Corp. published in 2008.
Not surprisingly, the established interests hate competition:
...Doctors have emerged as the biggest critics of the new trend. "The most profitable part of a family physician's practice is exactly what retail health clinics are going after," says Dr. Ted Epperly, head of the American Academy of Family Physicians. A family doctor treating the same conditions can see five patients an hour. Take away this revenue and doctors will be left with only complicated cases that yield less profit.
Nevertheless, they are forced to respond to it by increasing their quality and/or cutting prices:
...Despite the misgivings of doctors, retail clinics are changing the way family practices operate — and possibly for the better. Surveys show that many family doctors are now lengthening their hours and leaving more appointments open on a first-come, first-served basis.
Once again, capitalism and competition work. We need more of this, not less.

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