Monday, September 10, 2012

Dollar Store Dentistry

Recently I watched a Frontline episode on children's dentistry and Medicaid. In a nutshell, it is difficult - but not impossible - to turn a profit on providing dentistry to children on Medicaid. But it's important that the system be well-managed to avoid perverse incentives like choosing more profitable/expensive procedures when cheaper ones are available.

Then, I read about how J.C. Penney will start offering kids free haircuts. This is a classic loss leader strategy, the idea being that once people have invested the time in going to J.C. Penney, they'll end up buying enough merchandise to cover the cost of the haircut.

But why stop at haircuts? What if JC Penney stores (or Dollar stores or any store that might serve the same clientele that relies on Medicaid) set aside a small space for a dentist's office and then they offered dentistry to Medicaid patients. All they would really have to do is break even and then they'd reap the benefits of the same spillover shopping that they're hoping to get from the haircuts. They could even team up with Kool Smiles (or a similar, not under investigation business) to provide them low rent space inside their stores to get that spillover. They could also make themselves look like the kind of place that, y'know, actually cares about kids health.

Not that this is the best solution to dealing with health care for those who can't afford it, but it might be a good one under the current system.

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