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Fixin' Healthcare

Sunday, January 08, 2006

Wal-Mart To the Rescue?

Some aspects of Wal-Mart are difficult to admire. For example, low wages and the lack of benefits. These do not conform to our perception of standard practices. But Wal-Mart has developed a business model that that puts constant pressure upon excess cost in retail and many demonstrate their admiration by shopping there. At the very least, you can't blame them for doing what they are good at.

How, then, might Wal-Mart assist with the current problems of health care?

Slate offers some observations that deserve consideration. Wal-Mart does offer a cheap bare-bones health insurance policy but fewer than half of the employees sign up. The prices on health-related products and medications from their pharmacies are as low as you go in the market. Now, Wal-Mart is using its business model in an attempt to drive down the cost of health care plans. The author, Daniel Gross, speculates quite well that this effort is just a toe in the health care ocean. However, who better than Wal-Mart and their business model to further test this approach?

I would hasten to add that some insurance companies have tried this method of using large scale purchases to drive down prices and achieved only limited success. Whether any of us like it or not, health care is a business and it has a very well established political structure. To change health care requires a change in the culture as well as the business model. It is a massive undertaking and it cannot be done in one swift stroke.

Wal-Mart putting pressure on prices might be one leading edge to begin a change process but there might also be others. A neglected area of health care is lifestyle modification and prevention of disease. A scientifically-based and verifiable body of knowledge has accumulated that justifies approaching the problems of health care from this direction. Granted it is a long -term approach but it has the greatest potential for beneficial change and done properly it should be low cost.

Lifestyle modification and prevention of disease is not an easy task. It has to be built into the culture and the most promising way to do this is a community effort that involves every organization and individual. I would love to see Wal-Mart take a leadership role in that kind of project. It would be a good business decision.


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