Better Than Hillary Care: Some Good News on Health Care Entrepreneurship

Charles N. Steele
Issue CXLIV - February 9, 2008
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There’s no doubt that health care expenditures have greatly increased in the United States.  Compared to the late 1950s, today’s per capita annual spending is ten times greater in real terms (i.e. excluding inflation).    As a result, most of our presidential hopefuls have promised various plans to “fix” the “problem,” most of which on close examination seem to be limiting technology and imposing rationing of services.  However, it’s a mistake to see this rise in per capita real spending as a problem.  There are a number of reasons for rising costs, but the most important one is medical innovation – we now have technologies and treatments that were unimaginable 50 years ago.  No longer are cancer and heart disease automatic death sentences, for example.  The result: healthier and longer human lives.  While there are numerous problems in health care financing and provision (mostly owing to government interference in the market), the growth of health care as a share of the economy represents the successful expansion of an important industry.  We ought not be thinking about cutting this industry, but leaving it alone to grow, even though that means higher costs.

Of course, the increasing expense of medical services is also a problem, particularly for those with low incomes. But here’s some exciting news: a great breakthrough in affordable health care is underway!  Wal-Mart plans to open 400 walk-in clinics in its stores by 2010. 

The walk-in clinic concept is a wonderful one.  Done correctly, it’s convenient, inexpensive, and gives great service.   I used to go to such a walk-in clinic in a small town in the Rocky Mountain West.  It was opened by a local surgeon who was fed up with the municipal hospital and large local private clinic, two bureaucratic monstrosities that battled each other for monopoly rights, and tried to drive independent practitioners out of business.  The surgeon staffed his clinics with M.D.s and nurses who, for one reason or another, were interested in relatively temporary positions.  The care offered was fast, friendly, very competent, and notably less expensive than the “mainstream” alternatives.  I suspect it requires real devotion to customer satisfaction to make the walk-in concept work, and this surgeon and his staff had it.  So does Wal-Mart.

Wal-Mart counts among its regular customers those with low income; Wal-Mart is a great boon for them, with its great variety of low-cost, high-quality consumer goods.  Incorporating these walk-in clinics would allow shoppers easy access to low-cost, basic medical care, including preventive care.  What a great thing, particularly for those with low income, who tend to find it more difficult to see a doctor!  Wal-Mart’s plan would do far more to reduce costs and improve access for the poor than any of the inane big-government schemes proposed by our presidential candidates.  In a pilot run, Wal-Mart found that over half of the customers using the pilot clinic were uninsured.  Of course, being poor and uninsured is much less important when basic care is inexpensive and readily available.  Wal-Mart also has launched a line of budget generic pharmaceuticals.  They’d probably develop inexpensive health insurance, too, if only government would allow it.

Unfortunately, Wal-Mart is the target of utterly irrational hatred on the part of self-appointed “consumer” advocates and government officials.  Watch for these scoundrels to try to block Wal-Mart’s wonderful project.  The small walk-in clinic I used to visit doesn’t exist anymore.  The owner was harassed by the scoundrels of the local “mainstream” clinic until he eventually gave up in frustration, sold his operations, and traded practicing medicine for law school.  Similarly, it’s a safe bet that “consumer” groups and government officials will try to kill Wal-Mart’s project, because the real interest of many of these groups isn’t in promoting health or consumer well-being, it’s in personal power and wealth.  In this case this specifically means seeking control over the fastest growing sector of the economy.  If I’m right, and they try and succeed at killing this good project, they’ll be killing people along with it, since basic and preventive care demonstrably saves lives. 

But I expect Wal-Mart will prevail, and in doing so will reduce health care costs and increase accessibility; the demand is so great for this sort of product that it will be hard for governments to stop this project.  I love Wal-Mart for doing this.  I hope they succeed beyond their wildest dreams, make big profits in doing so, and benefit their customers with improved health.  It may not solve every imaginable problem with respect to health care provision, but unlike big-government schemes such as Hillary-care or Romney’s Massachusetts insurance mandate, this one solves some problems, and doesn’t create a host of new ones.  I look forward to trying out one of their clinics myself, should the need arise.  May their kind increase!

Charles N. Steele is Assistant Professor of Economics at Hillsdale College.  He has previously taught economics at the graduate and undergraduate levels in China, Russia, and Ukraine.  He also has extensive professional experience as a private consultant in the insurance industry on problems of design and evaluation of insurance programs.

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