HS Dent | Crowding the Turf of Doctors

Crowding the Turf of Doctors

By Charles Sizemore⋅ September 10, 2009 ⋅ ⋅ Post a comment

While watching the president defending his health reform package on TV today (which is, as we have written in prior posts, an expensive mistake), we found an interesting headline in today’s Wall Street Journal: “Retail Health Clinics Move to Treat Complex Illnesses, Rankling Doctors.”

The Journal writes, “Retail health clinics are adding treatments for chronic diseases such as asthma to their repertoire, hoping to find steadier revenue, but putting the clinics into greater competition with doctors’ groups and hospitals…. The clinics are helping alter the practice of medicine. Doctors are expanding office hours to evenings and weekends. Hospitals are opening more urgent-care centers to treat relatively minor health problems.”

We applaud the progress of the clinics, and we’ve supported the concept for quite some time (see our special report on health reform: Health Care: A System at the Breaking Point).

If you want real health reform in this country, you need to increase the supply of care — preferably via low-cost options like the convenience clinics — while also discouraging demand — which can only be done be eliminating the fee-for -service model that encouraging excess consumption. If Mr. Obama were serious about health reform, this is the direction he would take.

Charles Sizemore, CFA

Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy

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Discussion

2 comments for “Crowding the Turf of Doctors”

I agree with you that the fee-for-service model is a financial disaster. I have not heard any suggested solutions for this. Do you have one? Of more?

Thanks.

Posted by vsdill408@comcast.net | September 11, 2009, 10:16 am
I feel your commentary shows some ignorance (I use that word politely) as to what the world is like for us who are practicing physicians. In 2007 I left my private practice in general surgery in Illinois and joined a larger multispeciality group in a state with lower malpractice rates. However, at that time I was paying close to $100,000 a year for a malpractice premium through a mutual company through our state medical society (ie no profit to the company off the top). This was with an entirely clean record. A busy general surgeon may perform 500 cases per year. That means that malpractice premiums cost $200 per major case. Of course, running a small practice is also running a small business and I still had to pay rent, electricity, employees, health insurance premiums, etc. All this before I took anything home. And by the way, despite President Obama’s reference to a physician receiving $50,000 for an amputation, it is rare for a general surgeon to be paid more than $1000 for any given operation, often much less.
Now these retail clinics are “cherry picking” meaning that they select sectors of the market that are high profit and easy to deliver (”relatively minor health problems”) while leaving the more complicated care to those of us who are available and accountable around the clock.
Perhaps you feel the model of the “big box” retailer squeezing out the “mom and pop” store is good for the economy. Maybe it doesn’t matter who sells you the name brand (or discount brand) paper products. But there is a definite difference in who is delivering your health care, and that “mom and pop” attention is, in my estimation, worth supporting.

Posted by kadowaki | September 11, 2009, 12:59 pm