Free Health Care

This past weekend, Wal-Mart was offering health care screenings to male customers at no charge. Sam’s Clubs across the country gave any customer willing to take the time:

  • BMI Index measurements,
  • Blood pressure tests,
  • Cholesterol readings,
  • PSA (prostate cancer) tests, and
  • TSH (thyroid stimulating hormone) tests.

And that’s not all. Sam’s Clubs have more free screenings planned for the future. Here’s the schedule:

  • July: Kids Health Screenings
  • August: Vision Health Screenings
  • September: Diabetes Screenings
  • October: Women’s Health Screenings
  • November: Digestive Health Screenings

Further, at the store I visited there was no waiting. And if there happened to be a wait, I suspect it would be handled the way Wal-Mart handles prescription drugs. In order to reduce both the time cost and the money cost of care, Sam’s Club Pharmacy promises:

  • Hundreds of generic prescriptions for just $4,
  • Prescriptions filled in just 20 minutes, and
  • Text alerts to tell you when your prescription is ready, so you can shop while you wait.

Now if this doesn’t knock your socks off, you must be living in a cave somewhere. Certainly, you haven’t been paying attention to health policy news.

How many times can a man turn his head
And pretend that he just doesn’t see.

Under the health reform bill that was enacted last year:

  • In just three years you are going to be forced to buy insurance coverage for the very services Wal-Mart is giving away for free!
  • My rough guess is that you (through your premiums) and your health plan (directly) will pay $500 to $1,000 for these services alone; and if you can get them with only 20 minutes of waiting at a doctor’s office or community health center, be sure and tell the rest of us your secret.
  • I would also guess that after getting your blood drawn at a conventional site, you will wait at least a week before you learn the results — in contrast to the almost immediate feedback at Sam’s.
  • As for the drugs, ObamaCare will probably force you to buy first-dollar coverage for a whole slew of generics and the cost will be a lot more than Sam’s $4 charge.
  • Texas Medicaid, for example, pays a fee of more than $7 to pharmacists just to dispense a prescription — on top of the cost of the drug!

What’s happening at Sam’s Clubs is yet another instance of a general trend I have noticed. Almost all of the things health reformers say they want to happen are already happening — outside the third-party payer system. They are happening not because of the third-party payers, but in spite of them! Consider that:

  • Concierge doctors are consulting by email and telephone, keeping electronic medical records (EMRs), prescribing electronically and offering same day or next day appointments — all characteristics of the Commonwealth Fund’s vision of ideal primary care.
  • Walk-in clinics are posting (transparent) prices, using evidenced-based medicine by following computerized protocols, and keeping EMRs as well.
  • Cosmetic and Lasik surgeons routinely offer “bundled” prices, compete for patients based on price and quality and have lowered the real price of their services over the past decade.
  • There are lots of successful examples of coordinated care, integrated care, managed care, medical-home care and home-based care (see, for example, here) — almost all of it developed despite third party incentives not to do so and in some cases saving third-party payers millions of dollars without a dime’s worth of compensation.
  • And now we have primary care without deductible or copayment!

Isn’t the lesson here obvious? There’s nothing wrong with the market for health care. It’s the third-party payers, stupid.

Now I want you to close your eyes and try to imagine how a rational world would deal with all this information. Here are some of my fantasies:

  • Commonwealth Fund press release: “Karen Davis Praises Wal-Mart; Says ObamaCare endorsement was a mistake.”
  • HHS press release: Secretary Cancels Millions in Pilot Project Funding: “Why spend money looking for answers Wal-Mart has already found.”
  • Texas HHS press release: “State to Contract out Medicaid Services to Wal-Mart.”
  • New York Times Economix blog: “I was wrong” is the lead for the latest Uwe Reinhardt column.
  • Incidental Economist post by Austin Frakt: “On Wal-Mart, show me the evidence.”

Comments (24)

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  1. Candace McTeer says:

    At a Congressional briefing that I attended yesterday, a Congressman asked a panelist about the private market for healthcare and they concluded that since the private sector is defined as profit seeking there’s no way healthcare should be privatized and the quality of drugs developed would not be affected either as I sat in disbelief. Well, there’s no such thing as a free lunch.

  2. Charles Johnsen says:

    Health care should be free! Not as in “free beer” but as in “free speech.”

  3. Joe S. says:

    Great post.

  4. Charlie L says:

    Wal-Mart is giving away health care services to try to attract customers. That’s great, both for Wal-Mart (if it works) and for the health of its customers. But it seems like a stretch to call this health policy. Should all primary health care be ancillary to shopping? Maybe government should require everyone to shop at Wal-Mart? (I guess no one would argue it’s not related to commerce.)

    You seem to imply that this might go away with health reform. Why is that? Will Wal-Mart no longer need to attract customers? If Wal-Mart is still willing to provide free health care and timely service, all just to get customers into the store, Wal-Mart customers should still be able to obatin that benefit.

  5. Devon Herrick says:

    We have the capacity to track all manner of metrics on bodily functions over time. This type of monitoring has the capacity to boost therapy compliance and catch conditions early. If done in volume, this should not be expensive. But in medicine everything is expensive due to regulations, excess third-party payment and a system where many of the providers are part of an exclusionary guild.

  6. Uwe Reinhardt says:

    When I went to graduate school — or was it Econ 101 in college? — we were taught the TANSTAAFL principle, Ed Dolan’s acronym for “there ain’t no such thing as a free lunch.”

    Now John believes that Wal-Mart has defied that principle: “free” health care. Will Wal-Mart get the Nobel Prize In Economics for it.

    I will write the blog post you dream about, John, when Wal-Mart offer free coronary bypass grafts.

    Lovely song, though. One of my favorites. She used to date Bob Dylan. John is too young to know that.

  7. Courtenay says:

    It’s funny how two and a half years ago there was discussion of nationalizing banks to deal with a “disrupted” economy, and now, we still have a disrupted economy with true unemployment over double the national average, yet they want to nationalize healthcare which would bankrupt us.. It seems that the Washington majority is working for friends in Peking..

  8. Doctorsh says:

    Mr. Reinhardt

    There is health insurance and there is healthcare.
    They are not the same, which you know.

    Nothing is free in life, and healthcare has a value. So what is wrong with walmart driving the cost down? It will create competition as well as availabity for the uninsured.

    I agree with John. The third parties and their present collusion with government is what is driving up the cots of healthcare. Walmart has proved first with their $4 prescriptions and now with free screenings, that there are free market options that can work. Remove the middleman and costs come down. Is there an acronym for that in Econ 101?

  9. Ryan says:

    Prof. Reinhardt,

    No one is claiming that Walmart gains nothing from providing this service. On the contrary, this is the everyday way that free markets function, just as advertizers subsidize media. It’s an emergent, value-creating process that can’t be architected ex ante by legislators (much to the chagrin of policy advisors).

  10. Al says:

    Uwe Reinhardt writes: “Now John believes that Wal-Mart has defied that principle: “free” health care. Will Wal-Mart get the Nobel Prize In Economics for it.”

    I wonder where the “free” is. Out in the real business world we often give things for free because that helps with the sale of more lucrative items. The reduction in price is mainly created by getting rid of the middle man of government regulation. There a some, however, that still firmly believe that the government has to be the conduit for anything useful in health care.

  11. Blake Woodard says:

    John –

    Reminds me of one of my all-time funniest stories when I stopped by a church in Fort Worth for a “free” health fair and ended up getting my prostate digitally examined in a Sunday School room by a female volunteer who was a complete stranger and who made the understatement of the century: “Something doesn’t feel right.” I thought I was in line for the cholesterol test!

    My wife, who was a nurse working at the fair and suggested I stop by to get my cholesterol tested, still laughs about that one.

    Blake Woodard

  12. Stuart Prescott says:

    And we at Prescott Pailet make sure we include the $4 generics at Sams, COSTCO, Target, Walmart, etc in every presentation of benefits. The employees praise us for it. We’re on it!

    Stuart Prescott

  13. Michelle Morin says:

    Great article, John. Makes so clear the dangers and realities of ObamaCare, your readers now know what to expect. I’ve reposted your entire article over on my blog at

    Thanks for all you do to stop and repeal ObamaCare.


  14. Virginia says:

    You bring up a really wonderful point that I had forgotten: Walmart wants into the health care market. If there was ever a free market force that can fix health care, it is walmart!

  15. Ruben Toral says:

    Great piece, John. I was on a panel last year with one of Wal-Mart’s Senior Directors for healthcare talking about how consumerism, globalization and the internet were the real transformative forces in healthcare. We boiled the solution down to this: put cash in pockets, make information available and transparent and make people responsible for their choices.

  16. James says:

    Actually, there is such a thing as a free lunch in healthcare. It’s called the Emergency Room. Sometimes it’s a bologna sandwich, but more often than not, it’s lobster tails & filet mignon. Many patients come to the ER preferentially because they know they won’t have to pay. Some of them have actually told me that their doctor won’t see them anymore because they owe the doctor money for their last office visit. So, at least to them, ER care is free at the point of service. But unlike Wal-Mart, you can’t do your shopping while you’re in the ER waiting room (at least not yet).

  17. Adele says:

    This is incredible news for those people who have NO preventive care. Wal-Mart may have a “bad rap” in some business sectors, as well as may be contributing to a segment of our corporate/home-family business woes… BUT this “philanthropic (great business/marketing/strategy?) gesture” needs to be watched and its impact measured.

    Initial Research questions:
    1. Are ALL clinical lab results being sent to health care providers/organizations?
    2. How are ALL lab results being followed up? (Ethical responsibility)
    3. How is the impact of this intervention/program being evaluated? (criteria; timeline; guideline adherence; projected impact on chronic disease.

  18. Jeffery says:

    Free colonoscopy with the purchase of a hundred-pak of tube socks! Buy a 2-pak of plasma TVs and get a hip replacement! This is not a policy a gimmick. But market fetishists got their bumper sticker, “Wal-Mart gives away what Obamacare charges an an arm and a leg.”

    Every other advanced nation on Earth delivers quality healthcare to ALL their citizens for about half of what the US spends.

  19. JAMES S SINCLAIR says:

    I am an HONORALBE DISCARGED VETERAN, unempoley no insurace , can’t pay my hospital bills. An sugjestions.

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