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Employer or Doctor?
by John Goodman
 Two recent articles by Milt Freudenheim in the New York Times are worth
reading. The first describes companies that are providing onsite
primary care to their employees. Included are Toyota, Sprint and
Pepsi Bottling. Toyota's San Antonio plant, for example, has a
blood-test lab, an x-ray center and its own pharmacy.
The second article describes the practice of employee provision of
free services (deductible, no co-payment). Eastman Chemical, for
example, provides its employees with free mammograms, free vaccines
for children and free drugs and supplies for diabetics. Marriott
is waiving co-payments for generic drugs related to heart disease,
diabetes and asthma. As one executive said, the aim is "to
drive value and to target where care is most needed".
These practices are not new. They were faddish a few years back,
then faded, and have returned again.
If none of this strikes you as odd, that's because you have become so
inured to the strange world of health care that you are unable to
distinguish between normal and abnormal. In normal markets,
companies specialize in what they do best. Auto makers produce
cars. Soft drink companies provide colas.
So why are employers venturing into the practice of medicine - a field
in which they have limited experience and no comparative
advantage? The answer: employers are trying to solve the very
problems they themselves have created. Third-party payers have
completely destroyed the ability of doctors to provide innovative,
creative, entrepreneurial solutions to health care problems.
Take diabetes, for example. Doctors are trapped in a system
where they are paid piecemeal for isolated services. They cannot
re-bundle and re-price their services to treat diabetes as such.
(There also is no payment for one of the most important services:
teaching patients how to manage their own health care.)
Granted, this mainly is the result of the way the government pays for
care, but all the private payers pay the same way the government does.
There is an alternative to having your employer as your doctor, although
it is so radically different from the current system that it is never
discussed: free the doctors.
John C. Goodman is President of the National Center for Policy Analysis
Links:
On free employer primary care:
http://www.ncpa.org/email/011407--NYT--COMPANYCLINICSCUTHEALTHCOSTS.pdf
On free employer drugs:
http://www.ncpa.org/email/012107--NYT--SomeEmployersAreOfferingFreeDrugs
.pdf
On how third-party payment creates the underlying problems:
http://www.ncpa.org/email/hlthaff.25.w540v1.pdf
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