Wal-Mart looks forward and back at health care
Wal-Mart made two different announcements today, both with very different implications. The media, unsurprisingly, is treating them as if they were essentially two sides of the same coin, but they’re not. In fact, they are two very different approaches to the same problem–one looking back, one looking forward.
The most play is being given to the backwards looking announcement. Wal-Mart announced that they would be paying for health care for more employees. This is apt to make things at Wal-Mart a bit more expensive, and it will be nice for those few thousand employees who are added to the rolls, but overall, this is unlikely to have a lasting impact on anything.
The important announcement is being largely ignored in the media, though: Wal-Mart is opening 50 more health clinics in their stores, adding to the nine started in a pilot program mainly in the Southeast. This could be the start of something remarkable–if Wal-Mart can begin applying the same downward price pressures to medical prices that it has applied to goods in general, then it could be the beginning of a trend that finally halts the long upward march of medical prices.
State-based health care, about a century old, is proving a very expensive disaster everywhere it’s been tried. Employer-based health care, which has been with us for about 65 years, is likely on its way out, taking GM and other venerable US companies with it. But consumer-based health care, with doctors and clinics competing for our business and dollars, that may just have a future.
(Here’s another problem with a particular paper’s coverage of the announcement.)
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. To comment, please register. No profanity, please. Non-family-friendly words will be changed to amusing euphemisms as suits the author.
February 24th, 2006 at 5:33 pm
Just a question: what health care system existed before state-based and employer-based health care systems? Wouldn’t that have been a consumer-based system? Didn’t the state-based and employer-based systems arise as a result of deficiencies in the consumer-based system?
I’m not advocating one system over another, because I think all three have significant problems. But in this area, there really are no magic bullets. Maybe you would feel comfortable taking your children to the low-cost medical provider, but frankly I’m not there yet.
February 24th, 2006 at 8:29 pm
Over 100 years ago, no particularly meaningful health care existed.