What Can Healthcare Learn from Blockbuster?

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By Scott Andrews

Most of us can probably recall a time not so long ago when we would run to Blockbuster to rent a movie or two for the weekend. It wasn’t that big of a deal to pop into a store and pick up the latest release, as they were often located in the same strip mall as your dry cleaner, grocery store, or favorite takeout pizza restaurant. All were typically within a few miles of most homes. It was a Friday night ritual for many of us.

At its pinnacle, Blockbuster had over 9,000 locations and revenues of nearly 6 billion.  They were on top of the world and a retail darling. However, they didn’t react to the changing desires of consumers or utilize the internet to evolve their business model quickly enough.  Sure, they tried to eliminate late fees (these accounted for nearly 20% of their revenue) – but would later reverse that decision – mail movies directly to you, and even flirted with streaming, but they were fundamentally a brick and mortar company. They couldn’t react to the changing times fast enough and ultimately Netflix drove them out of business.

So, what can health systems learn from Blockbuster’s experience? Adapt or die! They need to focus on customers’ needs and tastes or risk losing business to the competition. After all, whether healthcare wants to admit it yet or not, they are in the customer satisfaction business. They need to think about customer convenience, customer cost, and the quality of the experience they provide. They need to use tried and true measures like the lifetime value of a customer, customer acquisition, and customer retention models to better understand where to invest and how to attract customers. 

The good news is that some healthcare leaders are starting to get it. Across the country, health systems are taking steps to combat a 30% growth in patient wait times since 2014 and to meet patients where they are. For example, some are taking steps like:

  • Opening urgent or retail care facilities: Many organizations are opening up new care sites to offer more convenient access, as 76% of consumers rate location as extremely/very important in care decisions. Some of these facilities are actually in the same convenient strip malls that use to house a Blockbuster. A recent Kaufman Hall survey found that 75% of healthcare organizations have an urgent care strategy in place and almost 50% have a retail clinic strategy. 
  • Launching online scheduling: In our app-based society, many consumers, particularly those in younger generations, would rather book appointments themselves online. In fact, a recent consumer survey found that, among Gen Xers who prefer to book online, 64% would be willing to switch providers for the ability to do so. Healthcare leaders are trying to keep with the times here as well; Kaufman Hall found that over 50% of healthcare organizations have implemented or are piloting online scheduling.
  • Offering virtual visits: Reimbursement rules are also starting to catch up with the times as well. Telemedicine and e-visits are gaining in popularity with payers. This is exciting for the consumer as well, as these mediums can further enhance convenience and combat wait times. Healthcare organizations are following suit as 45% and 34% of them are experimenting with telemedicine and e-visits respectively (17% have these widely available). 

Whether it’s a retail clinic on Main Street, a telemedicine provider, a primary care provider who works in three clinics, or a specialist at two hospitals, all of this data about providers and appointment slots needs to be integrated in a comprehensive provider directory. Health systems must ensure that they update, curate, and disseminate this data to all points of access – their website, mobile app, customer service centers and so on – as well as points where care transitions occur. It must also be searchable and actionable, so consumers can easily connect with the right care options for their needs.

Piedmont Healthcare in Atlanta opening 27 “Piedmont QuickCare at Walgreens” clinics is an example of an organization that has done this well. They not only expanded their care site offerings to deliver greater convenience to consumers, but also made it easy to book appointments at them by integrating them into their online scheduling systems. In the year after the opening of the clinics, more than 100,000 patients had received care at them and nearly half booked their appointments online.

Convenient care sites, online scheduling, virtual visits, and an integrated provider directory. These are some of the tools that health systems are starting to pilot to adapt to 21st century expectations. It won’t be enough to pilot the use of these tools. Blockbuster piloted waiving late fees but reversed their decision because they couldn’t afford to lose nearly 20% of their revenue. Five years later they were out of business. Competing effectively in a changing market landscape will require health systems to commit themselves to listening closely to consumer needs and to putting in the hard change management work that often accompanies meaningful innovation. 

Scott Andrews is Chief Customer Officer for Kyruus. 

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