Walgreen’s Business Model Due for Problems?

Walgreen’s Business Model Due for Problems?

Eventually, the brunt of the healthcare debate will turn from who gets coverage to cutting waste from the system. Anyone who has ever been to the doctor has seen the waste in the system. Unfortunately, tweaking the current system or beating doctors to see patients for $6 instead of $8 is not the answer.

doctor business model

The answer is to start over. Gut the current mess of a system and create one that works financially. Here’s an interesting place to start. However, before I do, I am not making any commentary on the FDA, doctors, government or any of the current players. I am simply offering talking points.

That said, what if our medical system did not require a doctor to write a prescription. Even more radically, what if it did not require a pharmacist? How much money in the current medical system is spent shielding patients from the drugs they supposedly need. Most people have had a doctor force them into a two-minute visit simply to get a prescription. Enormous cost structures have been created around prescription drugs: expensive retail pharmacies, hundred thousand dollar pharmacists, specialty doctors, extravagant hospitals, etc. Imagine the percentage of the U.S. medical bill is tied up insulating patients from prescriptions.

Granted, safety and many other issues drift into the conversation. However, in this post, we are simply discussing cost. In private sector business companies like Wal-Mart have thrived by cutting excessive cost and waste from the supply channel. In the medical system, prescription regulation has prevented a more cost-effective channel.

Looking for a less radical solution? Ok, how about this. Pharma distribution companies like McKesson create a business model where doctors offices are outfitted with prescription vending machines holding the top twenty drugs the prescribe. This would eliminate the need for a pharmacist, an expensive retail location, and the waste involved in picking up the prescription. These machines exist in quick clinics and hospitals, but image if the cost could be reduced to the point where they could be in all doctors’ offices?

Forget the details, here’s the real point. If we want to radically reduce the cost of healthcare, we need to think radically. The bottom line is that we need a new business model for healthcare!


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