Walgreens announced plans to launch telehealth visits on its website later this month, which includes on-demand virtual consultations. They are not the only big box retailer to expand into the D2C care space, as several big box retail stores now offer telehealth solutions integrated with at-home diagnostic care flows beyond popular PCR COVID-19 tests. Rite Aid, Walgreens, and Costco all sell diagnostic kits beyond COVID-19, including flows to test for prediabetes, DNA for ancestry analysis, and general health factors. These kits usually include a prepaid shipping label to labs around the United States and access to patient results through an online portal. In addition to results, some kit flows offer linkage to care services, a core tenant of HIV intervention and STI health care flows, which increases the chance of positive health outcomes for patients.
Growth in the retail diagnostics space is not surprising given evidence that COVID-19 made Americans more comfortable using telehealth and taking clinical tests at home. Retail outlets are betting that familiarity translates to a willingness for patients to pay out-of-pocket for more information about key health factors. However, in order to compete with telehealth and traditional remote care flows, big box retailers selling at-home test kits need to offer more than just information. They need to link patients to care.
Public health departments and traditional medical institutions also use linkage to care protocols in other remote flows, such as STI screening. For example, when a patient gets a reactive syphilis result, a public health provider can call to set up confirmatory testing and submit a script for antibiotics. This is particularly significant for marginalized patients who may not trust medical institutions for reasons of personal or historical abuse, those with little medical education, as well as patients afraid to take next steps.
If big box retail stores want to compete with care from general telehealth and testing initiatives from public health departments, they should go beyond basic screening to link patients to providers around the country. They could build or utilize a national provider of record API or connect providers and patients through their own telehealth services, like Walgreens. This would add value for patients who want low-lift medical care, as well those who only wish to interface with a provider if results are reactive or abnormal. In particular, discreet care flows such as STI testing, where patients may feel too embarrassed or stigmatized to speak to a provider in their community, could attract customers who would not otherwise pursue care.
The problem big box retailers will face in adopting large-scale at-home diagnostics programs is that there are no CPT codes to bill insurance for full at-home testing flows, including linkage to care services. While labs can bill for results, CPT codes do not not take into account the physical kit, shipping, or any necessary tech, such as a patient portal. Currently, customers absorb these costs at the register.
For this reason, at-home test flows through big box retailers may be prohibitively expensive for some customers, especially low-income customers for whom access is already a struggle. At-home diagnostic test kits cost as much as $300 for comprehensive panels. However, some large retailers, such as Walmart or CVS, may be able to cut individual test costs through sheer market size. For example, 90% of the US population is located within 10 miles of a Walmart, while 65.6% of Primary Care Health Professional Shortage Areas (HPSAs) are located in rural areas.
The global at-home testing market size is estimated to surpass USD 46 million by 2031. The 50 countries most affected by COVID-19, including the United States, have a higher demand for telehealth, highlighting the need to scale up telehealth capabilities, during and beyond the pandemic. Big box retailers are primed to offer much needed health care services through telehealth and store-and-forward telemedicine like remote diagnostics. Retailers who build testing programs can scale with market expansion so long as they can compete with telehealth programs and traditional medicine.
David Stein
David Stein is the CEO and co-founder of Ash Wellness.
