Monday, July 2, 2012

Chewing on market based solutions

The GOP pushes "market based solutions" to problems such as health care. Want to know what such a solution would look like? We don't have to guess. We already see it in the dental industry.

Before I had my wisdom tooth removed about 10 days ago and at the prompting of my friend and debate partner I wondered if the procedure was necessary. I decided to trust my dentist and oral surgeon. Besides, much would be covered by insurance (though I saw the insurance reimbursement statement and my out-of-pocket percentage was a lot higher -- over 50% -- than I thought it would be). No matter. It's done. And paid for.

I've heard of "food deserts" in which there aren't good sources for fresh food. The massive grocery stores here in the suburbs don't exist in places like city of Detroit. Residents go through the extra effort of getting to a grocery store or rely on the "food mart" at the local gas station. Or eat fast food.

Essayist Terrence Heath describes "dental deserts," places where there isn't easy access to a dentist. Graduates of dental schools don't want to set up practice there because they can't generate enough business to pay off their massive student loans. Residents don't have preventative dental care and when the care they need is no longer preventative, they get it done where they have all their health work done -- in the emergency room.

To fill the void comes Aspen Dental, a market based solution. The business plan is simple:
* Set up shop in a dental desert.
* Insist on complete exams no matter the problem.
* Recommend expensive procedures over and above what the patient actually needs.
* Charge exorbitant rates for toothbrushes and mouthwash.
* Offer a free "credit" card to allow for easy payment with all future procedures in the treatment plan already billed. Remind the patient there is "no interest" but the late fees are nasty (and there will be late fees because the patient can't afford it).
* Collect the profit.

The offices are staffed by dentists, but run by managers who have quotas for each dentist. That means the treatment plan isn't recommended by the dentist.

A market based solution requires profit. In a dental desert that is hard to come by (which is probably why it is a desert). The only way to make a profit is to overcharge, under-serve, or both. Until recently, we as a nation agreed certain services -- like health care --should be available whether or not a profit can be made. Now profit rules all.

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