The President Calls for Competition; Clinics Deliver

The Federal Reserve Bank of Richmond reports on one promising trend in health care, the retail health clinic. The article by Betty Joyce Nash, says “retail medicine pushes competition, price transparency.” Competition, if you’ll recall, was a word that President Obama and Speaker Pelosi repeated frequently as they sought to buttress the “public option.”

Here we already have one institution that provides competition and–unlike the country’s political class–some transparency. As of last summer, retail clinics had roughly $500 million in revenues. That’s small potatoes in a health care industry of $2.3 trillion, but the clinics are already having an effect. Some doctors have opened Saturday office hours in response, for example. There’s certainly room for them to grow, and reduce some forms of health care spending. Nash says, for example, that 60% of ER visitors don’t need emergency care. If only half of those visits could be diverted to a retail clinic, the cost savings could be huge.

Retail clinics don’t and can’t offer more than a small menu of services. But it’s that specialization that keeps costs low.

Among the benefits of clinics cited in the article:

• They promote price transparency
• They may be serving medically underserved populations, including people without insurance or a doctor
• They offer referrals for customers who don’t have a primary care physician, thus making it easier for the “undoctored” to get someone who will be a longer-term partner in their health

They offer weekend and “after-hour” services

They divert people from unnecessary visits to the emergency room

Why Health Care Reform Takes a Thousand Pages

I drove last night to a local grocery store to get my wife and daughter some NyQuil D. Because of government regulation (to control manufacturing of meth) there is a law that requires me to ask the pharmacist, have them swipe my drivers license and sign for the bottle. While waiting I see a sign for a walk-in clinic next to the pharmacy. There is a menu of prices for a variety of tests and services. And I wondered, “Here’s a cash market that works. Requires, as best I can tell, no insurance card. The prices don’t look absurd (I don’t think I saw any three-digit prices.) What will happen to this when the Congress and Administration are done with their reform?”

Eric Falkenstein suggests the clinic’s future is dark by analogy to Henry Manne’s story of the parking lots.

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How Much Will that Cost? Now You Know

How much did your family pay for health insurance last year? In 2008, the average insurance plan purchased through work cost $12,680.  Surprised? That’s one major flaw of our current approach to health care, in which the price of everything–from insurance to cotton balls used in the hospital–is either obscured or jacked up through accounting games.

Retail health clinics, by contrast, offer a straight-forward approach. Need a flu shot? A test for strep throat? The price is right there, on a board, much like at Subway. That way, you know what you’re paying and there’s no hocus-pocus.

We need more of that approach. The Denver Post provides a profile of how this model–typically involving a nurse practitioner setting up shop inside a drug store–is working in Colorado. It says “Patients are in and out in minutes,” and the staff are praised for the way that treat patients.

A new RAND study shows that clinics offer lower prices than emergency rooms, urgent-care centers, and doctors’ offices, but equal or better quality.

Study Gives High Marks to Retailers’ Clinics

Walk-in medical clinics run by CVS, Wal-Mart and other retailers provide care for routine illnesses that is as good as, and costs less than, similar care offered in doctors' offices, hospital emergency rooms and urgent care centers, according to a new Rand Corp. study, The Washington Post reports.

The cost savings over emergency rooms, in particular, was quite dramatic. "The costs of care in retail clinics were 30 to 40% lower than in physician offices and urgent care centers and 80% lower than in emergency departments" of hospitals, according to the study.

As for quality, the study evaluated care based on 14 indicators, including tests given, whether antibiotics were prescribed and whether follow-up treatment occurred. In general, the researchers found that the "scores of retail clinics were equal to or higher than those of other care settings."

U.S. Index of Health Ownership 2nd Edition Is Here

Pacific Research Institute has published the 2nd edition of the U.S. Index of Health Ownership, the only ranking of health care in the states that uses criteria of individual choice.

Americans lack the basic freedom to make their own health care decisions. The Index measures the degree to which individuals, be they patients, health professionals, entrepreneurs, or taxpayers, “own” the health care in their states.

The lack of health ownership is a real problem. Almost half of the country’s health care spending is in the hands of the government, instead of patients themselves. The other half is governed by regulations inflicted upon doctors, health plans and patients.

The Index uses 24 variables to quantify how state laws and regulations affect the liberty of citizens involved in state government health plans (primarily Medicaid), the private health-insurance market, and the provision of medical services. It also assesses the effect of medical tort on people’s freedom to engage health services.

Alabama, Montana, Nebraska, North Dakota, and New Hampshire finished in the top five, as the states that allow their citizens the highest degree of health ownership. Alabama leads the pack primarily because of a lightly regulated private insurance market, and good control of state government programs. Also, the state performs well on medical tort indicators. Alabama’s regulatory environment for providers favors competition, and government health programs run more effectively than in most states.

New York, Massachusetts, Rhode Island, Vermont, and North Carolina rounded out the bottom five, as the states in which the government has taken the most undue control of health care from its citizens. This is the second year that New York was in last place. The state suffers from government health-care programs that are out of control, a grossly overregulated private-insurance market, and almost completely uncompetitive provider markets.

A full listing of all 50 states and their rankings is contained in the Index.

The Index will give concerned citizens a good basis to demand reforms from their state politicians that will put American families in charge of American health care, instead of government and special interests.

Health Ownership & Failing States

Today's Wall Street Journal noted yours truly's U.S. Index of Health Ownerhip in its lead editorial.  Describing the "Albany-Trenton-Sacramento disease" of high-rolling state governments, bloated with tax revenue but in continuous budgetary crises, the editorial fingered bad health policies as a key element of the problem.

New York, New Jersey, and California are all in the tank of IHOP's measurements of individual ownership versus government control over health care.  The editorial quotes IHOP's diagnosis that "New York suffers from government health programs that are out of control, a grossly overregulated private insurance market and almost completely uncompetitive provider markets."

IHOP edition 3 is due to be published later this summer.  I don't want to leak the results, but if you are a betting man, I would not recommend putting any money on New York moving up the rankings.

Walgreens to Offer Free Services to the Unemployed

Walgreens, the country's largest drugstore chain, has announced it will be offering a free though limited set of services to unemployed people. Bring in an official letter stating that you're unemployed, and receive "free treatment at its in-store Take Care clinics for respiratory problems, allergies, infections and skin conditions, among other ailments. Typically those treatments cost $59 or more for patients with no insurance."

Some people may complain that there's a catch–Walgreens expects people to buy related medications from them. Well, if so, why not? If you have a condition that requires medication, you've got to buy it somewhere.

It's not a "comprehensive" solution for our health care needs. But then again, neither Kroger nor Publix nor Albertsons is a "comprehensive solution" for our nutritional needs. A good society has a variety of institutions and mechanisms for meeting human needs.

Health IT: Wal-Mart ’s Retail Clinics Show The Way

President Obama's claim that a Health IT "system" sanctioned and subsidised by the federal government will save $80 billion has been convincincly debunked.

So: Who's got an alternative? Wal-Mart, of course.  Sam's Club, its warehouse operation for small businesses, counts about 200,000 physicians amongst its members.  According to the executive in charge of the new line of business: "We're a high-volume, low-cost company, and I would argue that mentality is sorely lacking in the health-care industry."

That's putting it mildly!  Sam's Club will be selling a combined hardware & software package to small physicians' practice for a price much lower than currently available (it claims).

How did Wal-Mart figure it could sell the package so cheaply? From experience in its convenient, retail clinics, where it has used the technology already.  Here's another example of the benefits of innovation: Instead of competing against physicians, convenient clinics demonstrate the benefits of technology that physicians can then adopt!

Increased adoption of health IT is a stated objective of the Administration and the Congressional majority.  So, what are they doing for Wal-Mart?  Well, they've long supported the Employee "No" Choice Act, which would make it easier for union bosses to pressure workers into certifying a union without a secret vote.  Plus, just last week the Equal Employment & Opportunity Commission (EEOC) joined a lawsuit against Wal-Mart by a class of women alleging unfair discrimination in wages.  President Obama's first signing was the Fair Pay Act, which skirts the constitutional prohibition on retroactive legislation.

This is not the blog to discuss all the negative consequences of these actions, which do not relate directly to health care.  (Although a colleague has done so here.)  Nevertheless, they will drive up costs and cost jobs at Wal-Mart, making it less likely that Sam's Club can supply health IT at the low prices it anticipates.

I guess the government just can't stand anyone getting in the way of the Beltway's vision of health IT – or society in general.

Texas Senate Frees Convenience Clinics

More news from Texas: The Senate passed SB 532, which eases some restrictions on retail convenience clinics, thereby making it more likely that they will open.

Among other things it,

• Extends the length of a prescription that a nurse practitioner (NP) or physicians assistant (PA) may write from 30 to 90 days;
• Allows an NP or PA to write a prescription for a refill;
• Expands the distance that a clinic may be from a supervising physician from 60 to 75 miles;
• Adds the physician's residence as one of the places from which the distance is measured;
• Decreases the percentage of hours of the clinic during which a supervising physician must be present, from 20% to 10%;
• In addition, many rules may be waived by the Texas Medical board.

This is a great move forward for making health care more accessible and affordable. It is also consistent with the recommendations offered earlier this year by the Texas Public Policy Foundation.

Retail Clinics Take Off in Massachusetts

You know that something is popular when it becomes "macked," as in "McMansions." Or in the case of retail health clinics, "the McDonald's of medicine."

According to a Boston Globe article, the provider MinuteClinics has become rather popular during its first six months in Massachusetts: "The patients are drawn by the clinics' walk-in policy and convenient night and weekend hours at a time when many primary care physicians are turning away new patients."

The three largest insurance companies in the state now cover treatment at the clinics. That's likely a mixed blessing: It drives up visits to something that makes care convenient, but it also introduces the third-party-payment problem that contributes to health care inflation.

Of course, not everyone is happy about the popularity of these clinics. One doctor quoted by the Globe said "It's a touchy subject with me. I feel sort of jilted and I don't want to convey this to the patients."

Aside from the obvious financial concerns that doctors and hospitals (the common opponents of such clinics) have, there's the issue of the clinics not offering comprehensive treatment. Of course; that's by design. But they offer service quickly and cheaply. There's a danger here of the perfect being the enemy of the good.

By the way, it's obvious that the topic is a hot-button one. As of this writing, the Globe site has 99 comments on the story.