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August 23, 2007Popular retail care clinics? Call in the regulators.If it is a truism that "no good deed goes unpunished", it should also be noted that no innovative health care service will go unchallenged by regulators. The power of state and federal regulators to determine what health care services can be offered, how they are offered, and often even what price they may be offered at, provides many opportunities for anticompetitive behavior in health care markets. This includes hospitals using certificate of need (CON) certification to protect themselves from comptition, hospital associations attacking physician-owned clinics (and successfully lobbying for a federal moratorium on such clinics), and - most recently - some physician groups criticizing convenient care clinics and calling for regulators to take action against them. See, for instance, this story from the New York Times : With demand for primary care doctors surpassing the supply in many parts of the country, the number of these retail clinics in drugstores has exploded over the past two years, and several companies operating them are now aggressively seeking to open clinics in New York City. But with their increasing popularity, the clinics are drawing mounting scrutiny. Several states including New York, New Jersey, Rhode Island, Massachusetts and California are examining ways to more closely monitor the clinics, which are overseen by a hodgepodge of state agencies applying a wide and inconsistent range of regulations. More than 700 clinics are operating across the country at chain stores including Wal-Mart, CVS, Walgreens and Duane Reade. New York State regulators are investigating the business relationships between drugstore companies and medical providers to determine whether the clinics are being used improperly to increase business or steer patients to the pharmacies in which the clinics are located. And doctors’ groups, whose members stand to lose business from the clinics, are citing concerns about standards of care, safety and hygiene, and they have urged the federal and state governments to step in to more rigorously regulate the new businesses. "We’ve got big problems in health care, and this is not the answer," said Dr. Rick Kellerman, president of the American Academy of Family Physicians. "They are a response, they are a niche market and an economic opportunity, but we still have an underlying primary care crisis in this country." In New York state, for instance, regulators say there may be "possible violations of state law prohibiting unauthorized corporations like pharmacies...from delivering medical care." In other words, the state has set up a barrier to entry into the market for health care services, thwarting competition with doctors offices. How convenient for doctors. And all of this anticompetitive, cost-raising, innovation-choking regulation is justified in the name of protecting consumers. Which is the sheep's clothing in which all anticompetitive behavior is perennially cloaked. Of course, as regulations drive up health care costs, those costs are then cited by proponents of single-payer health care that the market has "failed" and that consumer driven health care is an oxymoron. But the correct observation is that a true market for health care services and insurance does not exist, so it cannot have failed. Posted by Paul Howard at August 23, 2007 02:23 PM CommentsPost a comment |
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