The Next Big Trend? Call it COSTCOCare

I've long argued that primary care should be at the center of healthcare--not some marginalized specialty. Luckily, it looks like Costco is catching on.

In fact, Amazon, Walmart and now Costco are investing billions of dollars into primary care. So what do they see in it?

The answer is simple: they understand customers, common sense and basic economics. A well-run primary care operation lowers total healthcare costs and improves health outcomes. And it's definitely better for patients!

In true Costco fashion (full disclosure: I am a dues paying member), they are putting the customer first. That means eliminating billing, coding and insurance from the primary care experience. The results speak for themselves: a simple virtual care visit is $29 and a more comprehensive virtual visit is $72.

In addition to being both simple and convenient, this approach clearly lowers costs. The real question is why are our largest payers in healthcare - Medicare and Medicaid - not adopting similar practices?

My book The Journey’s End offers an answer. It's also available on Amazon.

Some things never change - a reflection on the live of Dr. Victor R. Fuchs

The dean of healthcare economists, Victor R. Fuchs, is dead. While we mourn his passing, and recall his profound influence, it's worth reflecting on a sobering fact—healthcare is even worse today than it was in 1975, when Dr. Fuchs released his famous book, Who Shall Live? Health, Economics and Social Choice. At the time, Who Shall Live? was required reading for health professionals. (And it still is, if the recently released 3rd edition is any indication). In the book, Dr. Fuchs noted that American healthcare policy was on the wrong track. Sadly, that is still the case. According to The New York Times obituary, "Some considered the book unseemly. There was something distasteful, his critics said, about applying economic analysis to a field concerned with life and death."

In the decades since, one could confidently come to the opposite conclusion. Namely, that we're not applying enough economic analysis to life and death. For example, America is still spending more and more on healthcare and doesn't have anything to show for it. Our healthcare costs are twice that of other advanced countries, and yet our outcomes are lackluster. Some things never change. During his career, Dr. Fuchs identified the biggest problem facing the U.S. healthcare system—a lack of willingness to make hard choices. Real change will require both policy makers and the public to make tough tradeoffs. Unsurprisingly, that still has not happened, and the consequences of continuing to evade reality will only serve to compound our problems. In order to contain costs we need to prioritize primary care, emphasize affordable end-of-life care (e.g., hospice) and escape the clutches of the coding system, which shackles physicians and burdens everyone with bureaucracy. Implementing these three changes would dramatically increase access to care, improve the quality of care and reduce spending. For those interested, my book, The Journey's End, offers a roadmap for making this happen.

Of course, you don't need to be a dean of healthcare economists to see the value in that.

Talking about the Business of Healthcare on November 14

I'm excited to be on a panel titled "The Business of Healthcare: Understanding the Value Equation from a CEO and CFO Perspective" at Becker's Hospital Review's 11th Annual CEO + CFO Roundtable, taking place at 10:40 a.m. on Tuesday, November 14 at the Hyatt Regency in Chicago. I'll be alongside Darryl Linnington, Chief Financial Officer, Hollywood Presbyterian Medical Center; Phillip M. Kambic, President and Chief Executive Officer, Riverside Medical Center; Anisha Sood, Chief Financial and Strategy Officer, First Choice Health and Jennifer Wandersleben, Chief Executive Officer, AdventHealth West Florida.

View all the sessions and learn more about this meeting here. #BeckersCEOCFO