Private healthcare

This page lists some examples of privately run hospitals and other forms of private healthcare.

See also: Friendly societies

United States

In the US, entrepreneurs are finding ways to bring innovative, consumer-oriented health care to market—simplifying medical decisions, reinvigorating primary care, and lowering health-care costs. From health insurance to DNA-driven medicine, American health care is experiencing a revolution from below that promises to improve quality, lower costs, and empower people to control their own health care.

Dozens of websites, such as WebMD, Revolution Health, and eHealthInsurance, now offer consumers up-to-the-minute information on medical conditions, drugs, and insurance options, as well as basic quality information on doctors and hospitals. Internet-savvy patients can walk into their doctors’ offices knowing more about the latest treatments than their physicians do.

Critics counter that health care is more complicated than hotels. Without someone to help manage complex information, they point out, patients may find themselves overwhelmed by options, fall prey to snake-oil salesmen, or fail to see that they have received incorrect diagnoses or poor treatment plans. But where critics see a problem, entrepreneurs see an opportunity. Companies are finding ways to make even the most complicated medical decisions simpler for patients.

There is the Boston-based firm Best Doctors, founded in 1989 by Harvard Medical School professors. Best Doctors uses peer evaluations of physicians—polling 50,000 doctors worldwide in 400 medical specialties—to identify leading medical experts and then makes them available to 10 million patients in 30 countries. Normally, insurance companies limit patients’ access to specialists by requiring prior authorization for referrals, limiting access to preferred networks, or asking patients to pay more out of pocket. Patients whose employers offer Best Doctors, on the other hand, can go directly to the firm without prior authorization whenever they have serious medical problems and need help making decisions.

In 2004, in Reston, Virginia, Kelleher and Mark Vasiliadis founded Executive Healthcare Services, where clients receive a full range of preventive, primary-care, and acute treatments for a flat monthly fee of $150 to $450, depending on the size of their families. There are no contracts; if EHS clients don’t feel that they’re getting value for their money, they can leave. Kelleher says that EHS’s patient-retention rate is about 98 percent.

This out-of-pocket payment model counters some of the system’s perverse incentives. "We can very frequently just discuss problems on the phone with patients, since 90 percent of the diagnosis traditionally comes from their history,” Kelleher points out. “If someone calls with elbow pain, I can spend 15 minutes on the phone with them. I don’t have a financial impetus to get them into my office."

In October, 2007, one West Virginia doctor made national news when the Wall Street Journal chronicled his prepaid primary-care plan. Vic Wood offers the 100 or so patients in his plan unlimited primary and urgent care, basic diagnostic tests, and many generic drugs for a monthly fee ranging from $83 for an individual to $125 for a family.

Wal-Mart is quickly becoming the Henry Ford of health care. It took a bold stride into health-care markets in 2006, rolling out a Florida pilot program offering dozens of generic drugs at just $4 for a month’s supply. The program quickly spread to other states and added many new generics, including medicines for glaucoma, attention deficit disorder, fungal infections, and acne. As of May 2008, Wal-Mart estimates, the program has saved consumers over $1 billion in prescription drug costs. Competitors like Target and Kroger have rushed to match its offerings.

Another low-price, low-tech step toward shrinking health-care costs is the emergence of convenient-care clinics like RediClinic and MinuteClinic, which are housed in larger retail stores like Wal-Mart, Target, and CVS. The first convenient-care clinic, QuickMedx (later renamed MinuteClinic), opened in Minneapolis–Saint Paul in 2000 after its founder, Rick Krieger, couldn’t find a doctor on short notice to administer a strep-throat test to his son. Wasn’t there a better way, he wondered, to get fast, convenient care for simple illnesses? "We are not talking about diabetes, cancer, or heart disease," he told Harvard Business School researchers in 2002. "We are talking about colds, throat and ear infections."

The convenient-care clinics all use a similar model: offer a list of simple, low-cost health-care services for the consumer who can’t see his regular physician or doesn’t have one. The clinics keep prices down by offering care from a skilled nurse practitioner under the oversight of a licensed physician. Instead of skipping care or going to an emergency room, patients strapped for time or money can just head for a local store. As of November 2007, some 800 convenient-care clinics were operating across the U.S., up from 62 in 2006, with hundreds more planned. As of 2013, there were more than 1,400 CCCs throughout the United States.

The Mayo Clinic is another example of excellent medical care.

Volunteers in Medicine (VIM) Clinic is an all-volunteer medical clinic, taking care of the uninsured or underinsured who live or work on Hilton Head or Daufuskie islands. The clinic was the brainchild of Jack B. McConnell, MD, a retired physician and medical researcher who made a name for himself directing the programs that led to the development of Tylenol and the Tine test for diagnosing tuberculosis. In 1992, after he had retired to Hilton Head Island, he got the idea of starting a free clinic for the medically underserved on the island, one that would rely on free labor from the many physicians who had retired to the golf and beach resort community. Although Hilton Head is an affluent community, the clinic founders found that more than 8,000 people who work at the hotels, restaurants and golf courses—plus the farmers and long-time residents—had little or no access to medical care outside of the Hilton Head Hospital emergency room.

To get the clinic going, Dr. McConnell lobbied the South Carolina General Assembly to pass legislation creating a special volunteer license that retired doctors could easily get and afford. He also negotiated a special deal with the state's largest malpractice carrier enabling doctors to volunteer at the clinic without having to buy expensive, individual malpractice insurance. He then worked with the town of Hilton Head to lease a 1.1 acre building site for $1 a year and raised $500,000 in private money to build a 7,000-square-foot clinic, which opened debt-free in June 1994. Dr. McConnell's dream was to have a clinic that does not accept any government money. To date, the clinic has been able to do just that.

The clinic is attractive to retired physicians, Dr. Beatty said, because it allows them to remember why they became doctors in the first place. "We didn't go in to make money. It's a way of making a living, but it's not the goal, and we would like to continue to serve," she said. "This is a wonderful opportunity to not be working full-time, not be worrying about insurance forms and all that business, to just practice good old-fashioned medicine like we were trained to do. It's been a wonderful experience."

Canada

Private for-profit clinics are a booming business in Canada -- a country often touted as a successful example of a universal health system. Canada spends $3,600 per capita on health care -- almost half of what is spent in the U.S.

Facing long waits and substandard care, private clinics are proving that Canadians are willing to pay for treatment. The Canadian system is not without its problems. Critics lament the shortage of doctors as patients flood the system, resulting in long waits for some treatment. Health care delivery in Canada falls largely under provincial jurisdiction, complicating matters.

Private for-profit clinics are permitted in some provinces and not allowed in others. Under the Canada Health Act, privately run facilities cannot charge citizens for services covered by government insurance. But a 2005 Supreme Court ruling in Quebec opened the door for patients facing unreasonable wait times to pay-out-of-pocket for private treatment.

"I think there is a fundamental shift in different parts of the country that's beginning to happen. I think people are beginning to realize that they should have a choice," says Luc Boulay, a partner at St. Joseph MRI, a private clinic in Quebec.

Yet advocates looking to preserve fairness claim that private clinics undermine the very foundation of the country's healthcare system. "Private clinics don't produce one new doctor, nurse, or specialist. All they do it take the existing ones out of the public system, make wait times longer for everybody else while people who can pay more and more and more money jump the queue for health care services," said Natalie Mehra, member of the Ontario Health Coalition.

Links

• Black Market Medicine: An Ethical Alternative to State Control (pdf), Louis Alphonse Crespo, 1990
• Canada's Private Clinics Surge as Public System Falters by Clifford Krauss, February 2006
• Canadian Company Begins Real U.S. Health Care Reform by Linda Gorman, October 2009
• Can health care function in a free market? by James Leroy Wilson, July 2009
• A Classical-Liberal Response to the Crisis of Bioethics" (pdf) by Lauren K. Hall, 2010
• Competition Would Save Medicine, Too by John Stossel, June 2009
• The Complete Private Medical Option by Fred E. Foldvary, March 2010
• The Economics of Medical Care by George Yossif, July 1985
• For-Profit Medicine and the Compassion Motive by Tom G. Palmer, October 2000
• A Four-Step Health-Care Solution by Hans-Hermann Hoppe, April 1993
• Free Market Health Care and the Poor by Jacob G. Hornberger, May 2010
• A Free Market in Human Organs (pdf) by Robert Burrage, 1986
• Free-Market Medicine by Larry van Heerden, August 2002
• Free Market Medicine by James W. Brook, August 2006
• "Healthcare and Insurance on a Desert Island" by Gilbert G. Berdine, M.D., October 2009
• Healthcare Without Government (pdf) by Joe Peacott, October 2002
• Healthy Competition: What’s Holding Back Health Care and How to Free It (summary of the book) by Michael F. Cannon and Michael D. Tanner, 2005
• "How the Free Market Would Handle Quarantines" by Robert P. Murphy, July 2007
• The Market Doesn't Ration Health Care by Sheldon Richman, July 2012
• Market Medicine in El Salvador by James Dunlap, March 2010
• Markets, Not Mandates by Ronald Bailey, July 2009
• Medical Markets Can't Work? by Theodore Levy, January 2010
• The Overlooked Solution for Health Care by Sheldon Richman, August 2009
• A Sales Pitch for Laissez-Faire Health Care by Daniel B. Klein, July 1995
• Self-Medicating in Burma by Kerry Howley, August 2005
• The Rise of Markets and the Fall of Infectious Disease by Stephen Gold, November 1993
• Private healthcare at Wikipedia