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Reforming Delivery
How to Save U.S. Health Care, In Miniature

If we ever solve our health care crisis, we’ll look back and see this combination of factors as key: increased price transparency paired with innovation both in medical technology and in the means of delivering care to patients. The BBC examines one such pairing in a recent piece on a new company called Theranos. Theranos, led by self-made billionaire Elizabeth Holmes, is developing a new, cheap way to test patients’ blood. Not only are Theranos’ prices far lower than other companies’, but the company lists its prices upfront, unlike others that only inform patients of the cost once the tests are complete. And that’s not all:

Much smaller blood samples are used to do tests – little more than a drop. And then the blood is analysed fast in company facilities – automated labs shrouded in proprietary secrecy. […]

Theranos has recently launched an alliance with the largest drugstore chain in the USA.

Walgreen’s has more than 8,500 stores all over the country, within five miles of a huge swathe of the US population. The stores have just started installing what are called Theranos Wellness Centres.

In this particular case, what may ultimately be the most important thing about Thernaos isn’t the technology it’s developing. Critics argue that the processes the company uses are only a slightly more efficient version of services already easily available. Rather, the most important part may be the way it models a partnership between clinics and new technology companies committed to price transparency and bringing down costs. The more we see of that kind of partnership, the closer we will get to maximizing access to cheap health care.

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  • FriendlyGoat

    Glad to see you mentioned price transparency in the first sentence. Better, easier blood tests in convenient places are fine, but a continuous forced showing of all the prices all the time is the biggie. Any miracle of competition is completely thwarted without a megaphone mechanism to make all our eyes pop weekly at the “eye-popping” prices. We need to be collectively focused on the price problem BEFORE we are individually sick.

  • Boritz

    Theranos Wellness Centres

    The name implies that you will have to travel to the UK or Canada to access one.

  • Jacksonian_Libertarian

    Socialism will always fail, as it lacks the “Feedback of Competition” that forces continuous improvements in Quality, Service, and Price in free markets. Here we see a company seeking a competitive edge in quality, service, and price, that will grab business from other blood testing businesses. Unfortunately with a few exceptions like Lasik, most of the healthcare industry is insulated from the “Feedback of Competition” by the Health Insurance Industry, HMO’s, Obamacare, Medicare/Medicaid, and the VA. It’s this insulation from competition which is responsible for the inefficiency and expense of medical care that everyone justifiably complains about.

  • Fat_Man

    This the fourth mention of Theranos on this blog. You had a blurb last fall:

    Can Walgreens and Silicon Valley Save Health Care?

    Last winter, I posted comments with detailed descriptions about Theranos twice on one day:

    Small Companies Leave Big Pharma in the Dust

    The Vital Health Care Shift Nobody Is Talking About

    As a small quibble I doubt that Ms. Holmes should be described as a self made billionaire yet. By all accounts she is an inventor and entrepreneur, who may be on the verge of tremendous success.

    However, no matter what her ownership stake in Theranos was, she has undoubtedly given up a good deal of it to venture capital investors. One of the principles that those cash investors follow is that the entrepreneur may not liquidate any of his investment until after the initial public offering, and the cash investors have had an opportunity to liquidate their investments.

    On paper her shares may be valued at several billion dollars, but if Thereanos stumbles and falls (on the other hand her invention has not come to my local Walgreen’s yet), she will be out looking for a job. If Thereanos succeeds, she will undoubtedly wind up quite wealthy and she will have earned it, Thomas Piketty and Barack “you didn’t build that” Obama, to the contrary notwithstanding.

  • Compared Care

    Working on a website that allows anyone to compare healthcare costs:

    would love feedback:

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