Wal-Mart's $4 Prescription Plan Boosts Self-Pay Model in Healthcare

Wal-Mart's announcement that it will offer hundreds of generic drugs at $4 per month is a significant boost to the self-pay model of health-care delivery, according to Frank Sloan, a health economist at Duke University. This model can lower insurance premiums and increase a patient's role as a consumer, Sloan says. By offering affordable generic drugs, Wal-Mart is creating a strong price incentive that will encourage consumers to shop for value and select generic drugs over brand-name ones.

Key Takeaways:

Wal-Mart's $4 prescription plan is a significant boost to the self-pay model of health-care delivery, which can lower insurance premiums and increase a patient's role as a consumer.
The self-pay model treats someone seeking low-level health care as a consumer as well as a patient, encouraging people to shop for value and select generic drugs over brand-name ones.
With the substantial increases in health care spending, there are an increasing number of advocates for the self-pay model approach, which includes health savings accounts.
Frank Sloan, a health economist at Duke University, testifies that the self-pay model is "an American way" to address health-care costs, driven by market forces.
The self-pay model allows people to bypass their insurance and purchase affordable generic drugs, making it an attractive option for those who want to take control of their healthcare costs.

Statistics:

Hundreds of generic drugs will be offered by Wal-Mart at $4 per month.
Insurance companies can lower premiums or maintain premiums and offer more coverage if they do not have to pay for as many prescriptions.
Health care spending has increased substantially, prompting advocates to push for the self-pay model approach.

Sources:

AScribe Newswire, "Wal-Mart's $4 Prescription Plan Boosts Self-Pay Model in Healthcare" (Sept. 21, 2004)

Note: The provided sources are listed exactly as mentioned in the original article, without any additional details.