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Once I had this fantasy, except I call my fantasies
thought experiments
because the phrase sounds more
respectable. The experiment was simple. Suppose you liked
your community with its handsome brick downtown where small
stores sold real things to local people. You could make
your purchasing decisions accordingly. You could persuade
other people to do the same.
If you did this well, then the invisible hand of the
market
should maintain your downtown, as well as other
things you like about your community. Commerce and culture
are inextricably linked, and by practicing thoughtful
commerce, we could influence local culture.
But in my thought experiment, I left out an important factor -- America. This dawned on me a few weeks ago when I dropped into a local downtown drugstore and chatted with the owner and pharmacist, Richard Harris.
I got to know Richard a couple of years earlier. He
needed some computer consulting. As he explained matters,
not many people just write a check for their prescriptions
these days. Most of his money instead comes from third
parties
like insurance companies and government
programs.
These third parties prefer to get their bills with computers through phone lines, rather than on paper through the Postal Service. Paper bills took forever to get repaid, whereas electronic bills meant quicker money.
Richard confessed to near-total ignorance of computers. Computers I could figure out, I said, but my learning curve on the rest could be steep. During my youth, I knew many people who grew, imported, wholesaled, packaged or retailed pharmaceuticals. But they did all this on the sly, and so my knowledge of the licit trade was limited.
Nonetheless, he engaged me as a consultant. I'd talk to Achmed at the software company, first translating Achmed's Pakistani-tinged comments into Bytespeak, and then into regular English.
Richard would encounter a problem, and I'd call Achmed
with something like Your over-priced program which
should be tossed with the other camel dung into the Great
Desert where the wolves roam keeps forgetting to add Zip
codes.
Ignorant son of a sheep's breath. RTFM, page
28-C.
Eventually we got it running. And I thought that's
what's nice about having small, independent businesses in
town. If this had been a chain like Walgreen or Rexall,
they'd have their own expert. This way, we keep some money
in town and we all get a little smarter in the
process.
Richard was generally pleased with the system. But in
October, he had bad news: I'm closing the
pharmacy.
The reasons were fairly complicated -- so complicated that I asked him to write an article for the little magazine we publish so that he could explain them in detail.
In essence, chains can use prescription medicine as a
loss-leader
to entice people into the store. Once
we're in there to pick up a prescription, odds are we'll
buy some other stuff with profit margins for the chain.
There are also mail-order drugs, run by companies big
enough to negotiate lower prices than an independent.
The third parties use those chain and mail-order prices to determine how much they'll pay a drugstore for a prescription.
Wal-Mart could make up for this on sales in other departments, but Richard didn't have other departments. He cited a common ulcer-treatment drug. A month's supply by mail or a chain is about $95, and that's all the third parties will pay. But the wholesale cost is $110 -- Richard lost $15 every time he filled one of these prescriptions.
Even where he made money, it wasn't much -- typically
about $2 per prescription. Today we must fill 75-100
prescriptions per day just to pay the bills. It is no
longer feasible for me to produce the volume,
he
said.
The third parties aren't evil. Everybody -- government, insurer, private person -- is trying to reduce medical costs.
But my point, going back to my thought experiment, is that it really wouldn't have mattered if everybody in Salida had decided to have Richard fill their prescriptions. The third-parties just wouldn't have paid him enough to keep him in business. The third parties, not Salidans, made a decision about what sort of place we will live in.
Richard and his wife, Debbie, still have the building.
And it is now a Made In Colorado Shoppe,
offering
everything from jam to jerky made by our state's
artisans.
I'm all for promoting small-enterprise Colorado products, but the trend is troubling. We had a downtown that offered necessities like drugs and hardware that local people needed; now we see more novelties, and they have to attract tourists because the local market is rather limited for quaint candles and clever coffee mugs.
In the Post, I read of the same trend -- a downtown with interesting stuff, but few places to pick up a pair of socks or some aspirin.
Last spring, I went to several smart growth
meetings. They all presumed that we Coloradans had some
control over our destiny. But it wasn't Coloradans who
killed a downtown drugstore -- it was a national trend to
cut spending on medicine. If we're going to be smart, we've
got to start looking at a lot of factors we haven't
considered before.
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