Thursday, August 06, 2009

Health Care Conflation and Market Solutions

Wikipedia: Conflation occurs when the identities of two or more individuals, concepts, or places, sharing some characteristics of one another, become confused until there seems to be only a single identity — the differences appear to become lost.

In all of the ongoing debates on health care, medical costs, the uninsured, etc., it seems that we have conflated two very separate issues: a) routine health care that is generally low cost and affordable, and b) serious, catastrophic health problems, which could be potentially very costly.

Routine health care is conveniently provided by retail health clinics at affordable prices at more than 1,000 locations around the country in stores like Target, Wal-Mart, Publix, Meijers, Walgreens, etc. that are open 7 days a week. As I have written about before on CD, these competitively-priced clinics provide sports, camp and school physicals for only $29. Further, Wal-Mart and its many competitors provide generic prescriptions for $4 per month. For these types of prescription costs, and routine "health care," I don't think anybody would argue that the costs are unaffordable, and it would be hard to argue that increased government intervention could possible make these routine services more affordable.

But what about very expensive, catastrophic, and/or life-threatening illnesses that might require expensive medication? We certainly can't rely on Target and Wal-Mart for serious medical problems like spinal cord injury rehabilitation, burn care, cleft lip and palate care, medical and rehabilitative services for congenital deformities, problems resulting from orthopaedic injuries, and diseases of the musculoskeletal system. And what if children have these medical problems, they certainly don't have the financial resources to pay for these expensive medical procedures. Does that not then justify government intervention and government insurance for these extremely expensive, catastrophic medical treatments, some of which are for life-threatening illnesses?

Well, wait a minute. There currently is a private solution - the
25 Shriners Hospitals for Children around the country that provide free health care for these catastrophic illnesses and conditions. From The Shriners Hospital for Children website:

Every year, the Shriners Hospitals for Children provides care for thousands of kids with orthopaedic conditions, burns, spinal cord injuries, and cleft lip and palate, in a family-centered environment at no charge. It's how Shriners Hospitals has been helping kids defy the odds since 1922.

Bottom Line: There are private, market-based solutions to both routine health care and for even catastrophic, life-threatening conditions.

Exhibit A: Target and Wal-Mart retail health clinics

Exhibit B: The Shriners Hospitals for Children

Originally posted at Carpe Diem.


At 8/06/2009 10:41 PM, Blogger glenzo said...

I think that your analysis is 'fishy' and should be reported to the Whitehouse.

Maybe the people there will learn something.

At 8/06/2009 11:07 PM, Anonymous Anonymous said...

Note that the shrine hospitals are charities. There is not enough charitable capacity in this most charitable country to provide catastrophic care for everyone. (unless you put in a charity tax)
The first part of the post about routine care is true but is blocked by the medical establishment because it would reduce their business.

At 8/06/2009 11:22 PM, Blogger QT said...

Time for a
something fishy t-shirt?

At 8/07/2009 2:27 AM, Blogger OBloodyHell said...

> There is not enough charitable capacity in this most charitable country to provide catastrophic care for everyone.

Oh, cite a source for this obvious bogosity.

Stop making crap up out of whole clothe.

The actual incidence of catastrophic need is markedly small, esp. when you extract obvious senior-age (55+) individuals from the equation.

At 8/07/2009 7:00 AM, Blogger Doug said...

>There is not enough charitable capacity...

Perhaps if there were less money withheld from our paychecks for government selected charities, there would be more capacity for the real ones.

At 8/07/2009 8:34 AM, Blogger Tom said...

The answer to catastrophic illness is not Shriners' charity. The answer is catastrophic insurance. I'm no expert, but it's a lot cheaper than the typical medical insurance policy. We need pools of coverage, a marketplace to view prices and select, and a method of encouraging, subsidizing or requiring participation in catastrophic coverage. The high cost of medicine is due to the fact that the marketplace has been destroyed by "free" coverage from insurance or the government. We need to restore the market, so the consumer starts making smart purchasing and prevention decisions.

At 8/07/2009 5:41 PM, Anonymous Dr. T said...

"There currently is a private solution - the 25 Shriners Hospitals for Children around the country that provide free health care for these catastrophic illnesses and conditions."

The St. Jude's Children's Research Hospital in Memphis provides totally free care to children with certain types of cancers, genetic diseases, and metabolic diseases. In the past, the actor Danny Thomas was the main fundraiser for St. Jude's.

I also agree with a previous commenter that the combination of castrophic health insurance plus out-of-pocket routine health care payments is the most economical way to pay for medical care.

At 8/09/2009 9:14 PM, Blogger PatD said...

If we treated health insurance like auto insurance, we could let the free market deliver the optimal result. We don't insure our cars against the need for regular maintenance and minor repairs. We pay cash for those services. We insure to protect ourselves from the financial costs of a major accident. Moreover, we may lose that protection if we indulge in risky behavior, such as drinking while driving.

Apply the same concept to healthcare. You go to Walmart etc. for your regular check-up. You pay cash. If they find a potential problem, you go to the next level in the system. If the elevated PSA that Walmart found really is prostate cancer, the insurance kicks in.

Pretty simple model. Works for GEICO and Progressive. Why not us?


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