Random Thoughts from a Restless Mind

While driving to work this morning I had NPR on the radio as usual. The Business News segment was featuring the Panera Bread company and its “Panera Bread Cares” program. Briefly, Panera has converted about a dozen of its formerly for-profit stores into non-profits owned by the Panera Foundation. There are no prices in these stores, only “suggested donations.” Approximately 20% of patrons donate more than the suggested amount, 60% pay as if it is regular price, and the rest pay little or nothing.

Needless to say, the folks from Panera were more than a little self-congratulatory about this enterprise, and I think they have some reason to be so. Their stated goal is to raise awareness of “middle-class food anxiety”, not so much to provide food to the poor or the homeless. I imagine that the paying customers might be a little less prone to continue patronizing a store which all of a sudden started to be populated by the various and sundry homeless, especially those who look the part. Still, I do think this is an interesting experiment along the lines of Radiohead and music but for charity rather than as a business model.

Here’s the rub: a Professor Somebody from someplace opined that it is “exceedingly rare” that a business has a charitable venture that is indistinguishable from its for-profit core business. I wish I remembered the guys name. He intimated that it might actually be unique, not seen in any other business. Right. About that. This is the self-congratulatory part that rankles. Unique, as in only one, like never before seen?

Hardly.

How about the countless private doctors’ offices and clinics that have been seeing and treating patients for little or no payment, a phenomenon that began decades ago and continues today? Have we become so jaded about doctors and healthcare that an economics or business professor can state, presumably with a straight face, that a company offering to give away its core product in its usual setting is unique and almost unprecedented?

Come on now.

I’m reminded of a story one of my older partners used to tell. Dr. Scheie, namesake of the Scheie Eye Institute at Penn in Philadelphia, was a pioneer in cataract surgery. Every one of his patients had the same experience in the operating room itself, and Dr. Scheie personally did every single surgery; no one was denied surgery by the great Scheie, regardless of their ability to pay. Where they spent the next several nights (this was in the days of sand bags and immobilization) was determined by what, if anything, they did pay. Regular patients, those who paid the “recommended donation”, were the majority of the patients and they stayed in semi-private or double rooms. Those less well off who paid little or nothing were tended to in a dormitory like ward. There were two private rooms reserved for those who were of more substantial means. When asked what surgery would cost if one were to spend the night in a private room Dr. Scheie would reply: “you should pay what you feel you should.” The eye clinic never lost money.

I think the idea and philosophy behind the “Panera Bread Cares” is pretty cool, but let’s be real about both the phenomenon and the real rationale underlying these “pay what you can/want” stores. Panera is getting enormous publicity and goodwill from a trivial number of store conversions. It is getting great feedback and outsized credit for something that is so common in medicine that business professors seemingly forget that and get on NPR and say stuff like Panera Bread Cares is so rare that it might be a one-off. They are giving away bread bowls, for Heaven’s sake.

Doctors have been giving away something much more valuable to those who can’t pay every day for decades.