The volume of healthcare business conducted through retail outlets is set to double during 2023. Retailers like Walmart, Amazon, and CVS are increasingly offering healthcare services including blood tests, vaccinations, and medical check-ups that have traditionally been delivered by hospitals, clinics, or doctors’ practices. Aided by the onset of the COVID-19 pandemic, the trend toward retail healthcare will become more prominent as global economic conditions lead to squeezed budgets at traditional frontline primary care facilities. Leveraging consumer expectations of a streamlined customer experience will assist retail healthcare providers in creating services that patients will find more convenient and better value than traditional primary care delivery.
A new model with an array of services
This new reality created a model that can focus more on patients and offer lower costs, reduced wait times, more time with a provider, and greater convenience, due to centralized, personalized care. In the aftermath of the COVID-19 pandemic, the retail industry recognized the need for more patient-centric, non-emergency care when hospitals and traditional healthcare facilities were overburdened with those who had contracted the virus. Lockdowns and staff reductions created a backlog in non-emergency cases, with no easy availability for patients. The pandemic also brought about a revolution in the healthcare space as more non-emergency medical needs or patient issues that did not require deep intervention could now be treated at retail outlets.
Prior to this new model, more people visited an emergency room, healthcare provider, or private clinic, sometimes multiple times, for even non-emergent needs, thereby driving up medication and insurance costs. A retail-centric model, however, can reduce medical costs because it is primarily driven by retailers, rather than by insurance companies. Retail healthcare outlets can lighten the burden on hospitals and clinics by addressing medical issues that do not require very specific interventions. These conditions include intestinal infections, minor scrapes and cuts, and basic vaccines (flu, COVID, shingles, pneumonia, etc.). On-site pharmacists can address many patient medical concerns and questions. This model expands on the CVS Minute Clinic, which offers both in-person and online care, along with either online appointment scheduling or walk-in availability.
CVS was one of the first adopters of the retail healthcare model and committed to investing in the integration of retail and healthcare providers, acquiring Aetna in 2018, and investing $100 million in Carbon Health’s expansion in January this year. Walgreens also jumped on this bandwagon in 2021, when it invested over $5 billion to partner with VillageMD. CVS has taken this model one step further by investing in the metaverse.
Augmented reality enters retail healthcare
In February 2022, CVS filed trademarks for its pharmacies and healthcare services to enter the world of augmented reality, with the goal of creating a digital twin of the company’s pharmacies, allowing patients to digitally visit a site in a virtual space. CVS also hopes to offer downloadable goods, NFTs, and online retail services. It’s a model ripe for investment and can further ensure the focus remains on patients and their experiences.
This model will be augmented by the use of artificial intelligence (AI), including the use of smart devices and the integration of smart device technology. One example where this type of technology dovetails perfectly with a patient-centric model is having a digital lab: a place where patients’ files can be automatically shared (rooted, of course, in HIPAA laws) with primary care providers and hospitals. Additionally, AI allows patients to receive alerts, updates, appointment access and reminders, prescription notifications, wait time notifications, and a portal for patient feedback. This type of integration with smart tools and smart technology will help make life much easier for patients.
Benefits to the industry
From a business perspective, investing in this model will allow for shifting or reshaping of the healthcare cost model to make healthcare more affordable. Currently, billions of dollars are spent on multiple attempts to make drugs, test them, and bring them to market. As a result, when a drug is finally made available to the public, because of the astronomical research and development costs, both healthcare providers and insurance companies hike up the costs of the medications. This new model will ensure there is a rethinking and reimagining of how the cost burden can flatten from the manufacturer to the insurance companies to the end care for patients.
Another advantage is that retail healthcare allows the ownership of the model to belong to everyone, including healthcare providers and retail outlets. In the traditional model, patients, after visiting a healthcare provider, have to go to a pharmacy to pick up their medication. With the retail model, the pharmacy is already in the same space, creating a one-stop shop. It’s a prototype that will encourage more specialists in specific rather than generalized areas, thereby reducing the need to pay for unnecessary services and distributing the cost structure.
Drawbacks to the industry
While there are clearly many benefits to this new model, there are, of course, downsides. One major drawback that will inevitably occur will come from the restructuring of the cost outlay for manufacturers and healthcare providers. Profitability metrics, specifically for healthcare providers, will take a hit because fewer patient visits will reduce providers’ profitability margins. That, in turn, could lead to bad faith actors and potential malpractice issues if companies start charging hidden fees when they realize they are not getting the quota of patients they require.
Another potential risk is that patient care could be compromised when shifting to retail outlets if there are untrained or undertrained professionals in the stores giving out pseudo-medical advice. It’s crucial that there is awareness when it comes to training, resources, and services in retail outlets. Retail healthcare staff must be adequately trained to ensure that they are no less qualified or competitive than those in the healthcare-provided space.
The retail healthcare puzzle
While there is clearly an appetite for this new patient-centric model, there are still hurdles to overcome to assuage consumer concerns, particularly in light of the collapse of Theranos and the criminal conviction of its founder Elizabeth Holmes. While the scope of that fraud and the risk posed to patients was eye-opening, it did bring the question of whether large healthcare companies actually care about their patients front and center. As more corporations in the tech industry become involved in this initiative, consumer confidence backed by these large organizations can lead the way to building more consumer confidence.
Another essential piece of the retail healthcare puzzle that has come from the fallout of Theranos, is the clear need for government involvement in this new model. It cannot simply be a capitalistic-driven initiative. If regulators have teeth in this new model, their involvement will automatically increase consumer confidence.
In addition, to move forward, the medical industry needs to become more operationally efficient. The patient journey or inpatient care cannot be an afterthought. It must be the essence of each and every action the industry undertakes, from the time a medicine becomes commercially available until it reaches a patient. The industry will also need to look for partnerships to make this new model a reality—something that up until now has been beyond the traditional healthcare industry and insurance company space. They’ll have to learn to distribute as wholesalers, to seek alternative partners in the traditional space, and embrace technological tools to create new revenue streams from a more patient-centric perspective with the end goal of providing a good, consumer experience. That includes extended or augmented reality and quantum computing, which would lead to the advent of new players, new partnerships, and the establishment of a dynamic supply chain model.
The COVID-19 pandemic has made the healthcare industry aware that there is a more effective way to do business. With the advent of enhanced AI tools, the time is ripe for change. Providing healthcare in retail outlets demonstrates that it is possible to reinvent and/or reshape the industry in a way that can be more patient-centric, benefit patient outcomes, and be cost-effective for the entire industry.
Abhishek Sinha is a business and integration architecture manager at Accenture LLP. He is a subject matter expert in the areas of pharma pricing and advance returns management S/4 HANAfunctionality and reverse logistics business processes. Abhishek holds a bachelor of science and engineering degree, a post-graduate diploma in business management, and received his master’s degree in marketing management at Pune University, India. He can be reached at: [email protected]