Health Care Gets a Little Less Expensive
Here’s some good news for consumers: Schnucks is dispensing free prenatal vitamins to women with prescriptions. The offer builds on Schnucks’ free antibiotics program, which brought positive publicity and new customers to Schnucks pharmacies.
This is an example of market forces lowering health care costs. Schnucks wants to draw people to its stores, and to do that it has to stand out from its competitors. Other pharmacies will probably follow suit — if not with the same promotions as Schnucks, then with discounts on other medical services or products.
In the policy debate over the cost of care in hospitals, much of the discussion deals with putting medicine under regulatory control. Instead, we should be asking: How can we make hospitals operate more like Schnucks?
This is further evidence that health care industry is not a non-traditional market; it responds to immune from free-market mechanisms just like any other industry.
As a result of the entry of new suppliers in the health care market, practically everybody wins! Consumers win with lower prices, greater variety of products and services, and increased convenience. Traditional health providers also win because their urgent care centers aren’t as clogged with people seeking non-emergency care. The overall health care delivery system wins because the new providers drive down costs and encourage efficiency.
Comment by Christine Harbin — January 19, 2010 @ 12:41 p.m.
While I like the idea of free lunches, there is no such thing as a free lunch. Schnucks’ customers will pay for it in higher costs for other items.
Great for those who need pre-natal vitamins, not so great for those who don’t.
Kind of reminds of the drug reps who give out free samples. That is great for indigent care, but it is a cost shift in the end.
Comment by Papillon — January 19, 2010 @ 3:38 p.m.
Thanks for the comments.
Papillon, every store has some products with higher profit margins than others. And every store has to incur some costs in advertising or promotions. If Schnucks distributes its costs in a way that is burdensome for customers, I’m sure people will shop somewhere else.
Comment by Sarah Brodsky — January 19, 2010 @ 4:01 p.m.