Sunday, August 31, 2014

Dr. Walmart?

Fairly recently on this blog we looked at some topics that dealt with Distributist Economics.  Looming large in that discussion was the economic role of outfits like WalMart, which are sort of the antithesis of the Distributist concept at least on the retail end.

Well, this past week we heard on the news that Walmart is considering adding physicians in its lineup, adding to the Opthomologist it already fields.

Folks who worry about economic trends may want to consider what this means. Walmart already pretty much dominates the retail field in North American in many areas, and has expanded into about every niche it can, or maybe not.  By going from retail goods, into health care, it threatens to really impact this area of the service economy.

Well, what of this?  Is this good, or bad?  There's interesting elements to both sides here.

Traditionally health care has been incredibly individual in nature, although that started to die for various reasons about a a decade ago.  That is, the traditional nature of health care is that people had individual doctors, who had individual practices.  



We've blogged on this before, when we discussed health insurance here, a hot topic the past few years. What we'd note again is that up until World War Two, most Americans didn't have health insurance, although some who worked for large industrial concerns worked for employers who had "company doctors", that is full time physicians employed by those companies (now also a thing of the past). The Second World War brought in health insurance in a big way, as when the Federal Government froze wages, it didn't think to freeze benefits. So, employers started competing for workers, in a tight labor market, with offers of additional benefits.  Health insurance, which existed but which was not hugely widespread, really took off.  That gave us the system we have had basically since, in which quite a few people have health insurance, some don't, etc.  In the 1960s the Great Society programs modified that further by extending health insurance at the Federal level for the very poor, and then Richard Nixon extended it to the elderly.

Health care remained very individual, but starting in the 1980s and 1990s, insurance companies started boosting Health Maintenance Organizations, ie., practices with an established relationship with them, in order to control costs. About the same time, doctors themselves, finding their practices more expensive to merely operate, due to advances in medicine, increasingly came to associate themselves in group practices, which are nearly quasi hospitals and clinics. So consolidation has been definitely occurring.  Prices have also been climbing.  And as a result of the latter, a renewed emphasis on national health care came about, as people began to loose their health insurance as companies, which had gotten the whole thing rolling in the 1940s, found that they could no longer afford it in the 2000s.

Now we have Walmart threatening to enter the field. What would that do?

Well, one thing it would probably do is drive prices down.  Walmart doesn't enter anything that it can't compete at, and we can be assured that they'll undercut everyone else.  It'll be less personal, probably, but also a lot cheaper, I suspect.  They must also have studied the Affordable Health Care Act and they must feel that they can operate cheaply and efficiently within it.

In my prior post, I pretty clearly took a shot at Walmart.  When I heard this news, I was tempted to as well. But maybe this is a not so fast sort of thing.  Professionals are going to just hate this trend, and my suspicion is that if it works it won't stop with doctors, but on the other had as prices have climbed and climbed, perhaps this was inevitable and even corrective.

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