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Apr 13, 2009


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David Brush

So the question is; what costs the skyrocketing costs to provide health care?

An, overly litigious society?

Purchasing inefficiencies?

Also, Where is the walmart of health care? When will we see the first walmart hospital open up? If a private company could provide health care at prices comparable to a 15 or 20% copay their would be people lined up for miles.

Michael W. Kruse

David, great questions! Where are the answers? :-)

I find the health care issue to be exceedingly complex. I do think this guy is right that focusing on health "insurance" instead of health "care" is a problem.

Economist Robert Fogel points out that the more affluent society becomes, the more money people have to spend on the health care and the more interested people become in health care. In one sense, some of the increase in percentage of our family budget spent on health care is a positive thing.

He also points out that many of the poor who presently have health insurance don't use it. The services are too inconvenient and many feel ashamed in the presence of medial professionals. So there are cultural challenges.

I also read that, on average, 80% of our health care expenditures come in the last two weeks of our lives. Sorting this one out gets into all sorts of bioethical questions.

I suspect dividing how we finance basic health care services from catastrophic or pre-existing is a piece to the puzzle. Decades ago the AMA and large corporate interests regulated hundreds of benevolent care societies that organized affordable care for their members out of business. I really think bring market competition into the picture, at least at the basic care levels, would drive costs down.

As to Wal-Mart, they've given radically discounted drugs. Now they are moving in store health clinics. Can adding a surgical wing be far behind. :-)

Seriously, what do you think the issues are?

Dana Ames

What's the economic problem with single-payer (a la Canada)? One of my clients has been an MD for 40 years and thinks that's the way to go. It makes no sense to me to have the middle man.


David Brush

For Walmart I think it's a no brainer from a purely internal operations stand point. If they can put doctors on the payroll (like Google does) and have the employees visit their own 'in-pocket' doctors first (with some large non-litigation documents signed) then it just makes sense. You only have to offer major medical policies for hospital stays, etc. The by-product is they have a new product to market and sell to the public as well.

And as you say, if they can apply their purchasing power to a hospital, then a walmart hospital isn't far behind.

I think walmart has far more to offer the united states as a national health care system than a government managed system would. In fact if I had a say I would argue that the government should put forward an open bidding system (like the FTC) to purchase rights to run a national health-care system and let private companies like walmart, etc. bid for the rights to run it. The winner agrees to limit costs to a reasonable level and not inflate more than general inflation.

Agree, too complex to fix within a blog comment.

Also as to purchasing costs. I had to stay at a hospital in early march for a few days, the itemized bill is crazy with markups vs. an over the counter purchase.

Michael W. Kruse

Dana, that question I have about single-payer plans is that it is usually the case that everyone would pay into a single government entity who pays for our health care services. As I understand it, that drives the market function out of the equation. Markets are a critical feedback loop about what is needed/desired. Otherwise you have a national entity "guessing" at what is needed and rationing according to that guess. Health markets began orienting themselves according to what the national board will pay rather than the need that is being demanded. I don't profess to be an expert on this but this is a concern I have.

Michael W. Kruse

Interesting ideas, David. Somehow a market feedback system has to rebuilt that connect patient needs/demands with the suppliers of health care, while at the same time having mechanisms in place that cover those without the means to purchase health insurance.

"...the itemized bill is crazy with markups vs. an over the counter purchase."

I had a similar experience earlier this year. I know what you mean.


I recognize that this is an very complex issue.

But I am always troubled when discussions talk abour health care like it is a product.

Going to the Dr is not really like buying a blender or a shirt at walmart.

I think there is a fundamental difference in the relationship I should have with my Dr and my relationship with the clerk at Walmart who is "stacking them deep and selling them cheap."

I shop at Walmart. I've got several types of items that I buy there. But I really have to ask does anyone really like anything about the experience of going to Walmart other than the low prices?

I almost never go to Whole foods or Central market. But I do think that the experince of going the the Dr should be more like going to those places than Walmart.


Another idea:

Instead of walmart as a model how about the way Home Depot was a decade or so ago. Great selection and a staff that delivered excellent customer services. I beleive that most of the staff were folks that had worked as plumbers, carpenters etc.

Dana Ames

What ideas do you have about what would bring the market into the health care picture?

Here are a couple more things:

I spoke with a GP from England a few years ago, who told me that there are doctors setting up "private practices" for people who want to go outside the NHS for speed or whatever other reason. She said they are mostly bad doctors who can't stand the light of the government regulations. She's not the type to be jealous because they can potentially make lots more money.

The way the system works now, the insured are subsidizing the unemployed/uninsured. Anyone who does a little digging can find this out, but we all act like this is not the case. One thing single payer would do would be to at least tell the truth about this situation :)

Or, what if we went back to pre-insurance days (when doctors sometimes got paid with chickens...)? Another MD I know, in the same practice with the 40-year veteran, said if she were in charge she wouldn't do any insurance billing; it would be strictly cash or payment plan, with discounts at her discretion, leaving the patient the responsibility of dealing with the insurance if they have it.

Another blogger I read semi-regularly has experienced US and Canada systems, for both emergency and non-emergency care, and raves about Canada; she has never had to wait and the family has always gotten the care they needed, including a diabetic hospitalization.

My father was adamantly opposed to "socialized medicine", but I think that was because he thought the government would be telling us which doctors we had to see. That would not be an issue with single payer, though it would be medicine under a "social contract".

Well, it's a puzzlement...


Michael W. Kruse

Ceemac, I share your concern about a Walmart like health services environment. Because the demand for personal and relationship would be so high I expect any successful firm competing in a relatively free market would have to excel in this area. But competition would force them develop economical ways of delivering complex services. A Walmart mentality that finds a way to squeeze cost out of the supply chain is what I suspect Dave and I had in mind.

Michael W. Kruse

Dana, I don't have specifics but I'd rather see something like vouchers placed in the hands of the poor to shop for the services they want, rather than having services provided to them.

Ultimate accountability is going to be to the one paying the bill, not the one receiving the care. I want to be able to direct my dollars to the provider I think does the best job. It is the economic link between provider and recipient that I think would bring accountability and affordability.


An issue that is always lurking around these discussions but never really discussed is the nature of the dr-patient relationship.

Here are two possibilities (I am sure there are more):

1. Is the dr someone who is employed by the patient to provide certain goods and services? In a lot of ways not much differnt than hiring a plumber.

2. Is the dr something of an authority figure who has a somewhat paternalistic realtionship with the patient. The patient places him/her self under the care and discipline of the dr. The dr is less like a plumber and more like a pastor or spritual director.

I prefer #2. But that requires that the dr really know the patient. it won't work if the only time the dr sees the patient is at the annual checkup. The dr needs to live in the midst of the patients. See them at church, the post office, the cafe, ball games etc. Has to be able to say at church "ceemac, that is a nasty cough... you will be in my office tomorrow." or at the in the cafe parking lot after church "ceemac, that is a nasty cut on your arm. get in the car. we are going to my office NOW."

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