I very occasionally have cup of coffee at Starbucks. I’ve found their offerings to be mediocre and expensive. But yesterday while on the town I stopped at one. The coffee was fine but nothing special. While there I noted they had instant coffee packets available at about $1.00/cup. I’m not talking about a cup of instant at the local Starbucks but somehow they think you will pay a dollar for powder/crystals of instant coffee that you are to purchase and take with you to have at home or elsewhere.
If anyone wonders why the Starbucks brand is in decline it is the serial loss of focus on it’s basic product. They’ve failed at breakfast sandwiches, bagels, donuts, music marketing, internet at the store and now are certain to fail with $1.00/cup instant coffee.
In the coffee biz, prices are obvious, competition easily evaluated and accessed. I know for example, that I can get at least as good a cup at lower cost at a local espresso place, and even have a decent bagel along with the free internet access if I choose.
Now why is this different than health care? In health care prices are obscure, choices are limited and the decision far more complex than whether to have a mocha or latte. Competition is stiffled by the complexity of the decision process, conflicts of interest of providers and a patent system that guarantees exclusivity for a generation. And lastly there is nothing discretionary about health care when you need it.
The lack of a viable open market in health care, the strength of the health lobby that works mightily to keep it that way and the lobby’s influence over legislators explains why people are selling Starbucks stock and buying shares in health related businesses–that’s where the money is and is likely to remain.