Boutique health care

I went to an outpatient clinic yesterday to get an impacted tooth removed. Handling my case yesterday were: one doctor, one anesthesiologist, two receptionists and five nurses. As for space, there was one lobby, a room where a nurse looked through the forms I filled out, the operating theater and a room that led to a loading ramp. The total cost of the 30-minute operation was $800. There are only two surgeons in Norman who are covered under my insurance plan, so I'm sure the other place is quite similar.

Why is it that expensive? It's not that the surgeon himself makes that much money. Take away the cost of the clinic rent, receptionist salary, nurses, materials, liability insurance, and I would estimate that his take from the operation may have been less than $200. Yet, the operation cost my insurance company $800.

I think that the reason is that there is no economy of scale in healthcare. In a country where retailing is dominated by big box stores, medical practices are run like boutiques.


  1. Speaking of big box retailers, you do know that WalMart is opening clincs in their stores, right? I guess I'm part of the problem, because I'd much rather go to a boutique.

    BTW, are you sure that your insurance company will be paying the entire $800? Usually the medical providers agree to huge discounts in exchange for being listed on a particular insurance plan. My recent outpatient procedure at our local hospital was billed at over $6000, but after the discount my insurance only had to pay about $1200.

    Obviously this practice makes it even harder for the uninsured to afford health care, since they don't get the discount. Many providers will work with people who are paying out of their own pocket. But they usually won't volunteer to, and most people don't know enough to ask, or are uncomfortable doing so. This, in turn, explains why at least 50% of the amount billed to cash patients is never seen by the provider (according to a friend of mine who does medical billing).

    Yes, our health care system is broken. Regardless of their promises, I don't know how much either of the Democratic candidates can do to fix it if either one is elected President. They would be going up against an entrenched coalition of medical, insurance, and accounting lobbyists and their bought and paid for Congressmen and Senators.

    Apparently I'm feeling quite cynical today. Try me again in mid-November.

  2. Well, a big-box health care provider does not literally need to be Wal-mart.

    Goddard Health Center or Norman Regional could follow a big-box model if they wanted. Hire a bunch of physicians and nurses, centralize billing, enforce quality control, computerize health records ... could capture a lot of wasted costs if every doctor and surgeon didn't need to build a mammoth structure with 5 waiting rooms.

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