Preparing for the retail health care revolution

Healthcare is undergoing a seismic and highly visible shift that poses a serious threat to traditional care providers. Consumer goods retailers such as CVS, Walgreens and Walmart and their web-based counterparts, including Amazon, are offering an increasing range of healthcare services, leveraging convenience and frictionless services to draw away patients from traditional providers.

While this evolution appears to have occurred quickly, these dramatic changes have been years in the making. Unfortunately, despite plenty of advanced warning, most providers are unprepared for these new threats to their business models. A 2021 survey of traditional healthcare providers by Kaufman Hall showed only 7% were rated as “Tier 1” performers in terms of their digital strategy and infrastructure for supporting healthcare consumerism, while retailers have decades of experience in honing their service models.

The prolific expansion of retail healthcare centers, coupled with our collective experience in seeking safe, accessible healthcare during COVID-19, has fundamentally altered the delivery landscape. Millions of Americans, for example, have gone to their local CVS stores to get tested for the coronavirus and/or receive COVID-19 vaccinations, circumventing the hospital or health clinic setting. Over the past two years COVID-19 testing and shots have drawn more than 32 million new customers to the retail chain’s stores

Building on new consumer habits

With more than 9,000 retail locations, and with roughly 85% of Americans living within 10 miles of at least one CVS – the company’s geographic footprint gives it a huge built-in edge in attracting healthcare consumers. Complementing its deep market penetration is its troves of data. Part of the company’s strategy is a new partnership with Microsoft to “help CVS Health accelerate a data-driven, personalized customer experience.”

CVS Health isn’t the only well-positioned retailer moving aggressively in healthcare.Walgreens now employs 85,000 healthcare professionals and, like CVS, has deployed Epic in its clinics to establish a digital infrastructure and enhance care coordination.In fall of 2021, Walgreens announced plans to invest an additional $5.2 billion and openat least 1,000 of its Village Medical clinics by 2027.

Walmart, although slower to activate in the market, brings a huge competitive advantage – a mind-boggling 90% of Americans live within 10 miles of a Walmart.Its deployment of Epic into 4,000 retail stores by 2029 and rapid expansion of clinic services will make it an easy and affordable care site for many.Retail giant Amazon, which in 2020 started rolling out telemedicine services, just announced it will expand its physical clinic presence in 20 major metro areas in 2022 with additional growth planned.

How healthcare IT leaders can respond

The convenience and cost-effectiveness offered by these market disrupters represent a tangible and unprecedented threat to traditional provider revenue streams.

The good news for providers is they also can deploy technologies and develop strategies to retain patients by meeting their needs for a superior experience. Many already have begun doing so. The Kaufman Hall study of healthcare consumerism placed 46% of traditional providers in Tier 2, nearly double the 24% in the 2019 survey. These companies, according to Kaufman Hall, have “a thoughtful approach to becoming more consumer-centric, investing in infrastructure and initiatives that are being expanded system-wide.”

That’s great progress, but make no mistake: Traditional healthcare providers are up against extremely nimble and well-financed competitors who are permanently reshaping healthcare delivery. The retail revolution not only is far from over, it’s going to accelerate rapidly.

Healthcare IT leaders can play a pivotal role in helping their organizations respond to this changing landscape to deliver a customer experience that strengthens consumer loyalty and protects market share. These include:

Make virtual care a primary service strategy. To counter the omni-channel healthcare services offered by retailers, traditional providers should offer a frictionless end-to-end patient experience including telehealth and remote patient monitoring closely coupled with primary and specialty care.Integrating virtual care into the continuum can serve as a differentiator that surpasses the easy accessibility of retail healthcare.

Build marketing partnerships. Though retail health providers often are geographically convenient, they may not have the robust complement of technology-enabled services a health system can offer consumers. That won’t matter, however, if consumers are unaware of a provider’s technology-enabled services. It’s important for IT and marketing to align in a working partnership on patient outreach and retention to promote the health system’s advanced technology as a mechanism to attract and retain patients and providers.

Make the digital journey easy for physicians, staff and patients. Providing leading digital apps and technologies to physicians, staff and patients will have little value if they are hastily deployed or not optimized. End-to-end workflows must be seamless, high-value features: For example, patient self-scheduling must be enabled across the health system for a consistent experience, data must be integrated and flow across the ecosystem and end-users must be supported through up-front training, tip sheets and ongoing support.Traditional healthcare IT leaders must equip their technical staff to support a broader array of solutions, work with training teams to ready staff to use and champion the technologies and provide high-quality “help desk” services to staff and patients, either through scaling and skilling up their internal teams or establishing a partnership with an IT managed service partner with deep competencies in serving patients and providers.This level of service can and will provide service differentiation for healthcare consumers.

Conclusion

The retail healthcare revolution poses an existential challenge to traditional providers, many of which have been slow both to embrace digital technologies and acknowledge the growing expectations of healthcare consumers for choice, affordability and personalization. By developing consumer-focused strategies that include the deployment of virtual care services and user-friendly technologies and ongoing support, traditional healthcare providers can protect their revenue streams while strengthening patient loyalty.

Laura Kreofsky, VP, Strategy, Pivot Point Consulting, brings a wealth of expertise to her role leading Pivot Point Consulting’s Advisory practice. Over the past 27 years, she has led health IT planning, implementation and operations in the private and public sectors; working with and for academic medical centers, community hospitals, insurers, public health agencies and international clients. Her areas of focus include IT-enabled business strategy, IT operations and governance and industry regulations and reform.