How CVS Is Leading the Retailization of Healthcare
Why Retail Healthcare?
The trend toward retail healthcare has been growing for two decades. Some of the country’s largest retailers, seeing the opportunity, have jumped in by opening retail health clinics nationwide to meet consumer needs. This shift to retail healthcare is influencing how Americans get their medical care. No company is as well-positioned to impact this as is CVS Health.
The reasons for retail healthcare
Patients want convenience and they like familiar brands. They also want a soothing environment that is easy to navigate. Those are all characteristics of good retail environments.
A study by McKinsey reflects this. When it comes to healthcare, consumers want:
- Distributed care. They no longer want to go to a hospital for all their medical care.
- Convenient locations.
- Better hours that fit their work schedules.
- No wait to see practitioners
- Lower prices. Retail clinics charge lowest costs compared to urgent care and emergency visits.
The market is gradually reflecting the shift to an outpatient experience. According to the Advisory Board, a healthcare consulting firm:
Inpatient hospital visits declined 6 percent between 2006 and 2016. Outpatient care increased 20.4 percent during the same period of time.
Projections are that the trend will continue over the next 10 years. Outpatient care will increase 58.6 percent. Inpatient care will decline another 3.7 percent.
CVS is Well-Positioned to Lead
In June, Larry Merlo, CEO of CVS Health, made a bold statement to a group of investors.
CVS Health is in a unique position to achieve Merlo’s goal because it already operates in many parts of the healthcare industry.
- The company has a network of 9,900 CVS retail pharmacies. The company also operates the pharmacies inside more than 1,670 Target stores.
- CVS Health operates more than 1,100 MinuteClinics in its store. Minute clinics are staffed by nurse practitioners and physician assistants. They can provide basic healthcare services, including work and sports physicals, flu shots and other vaccines, as well as diagnose and prescribe medication for minor conditions such as strep throat.
- CVS Caremark manages prescriptions for more than 75 million people in the USA.
- CVS Health recently merged with Aetna health insurance. That brings CVS complete health information for more than 20 million members.
As it combines consumer information from its stores and pharmacies with more information from Aetna, CVS Health will have extensive consumer and market data that it can use to develop new services and plan new locations.
Expanding with HealthHubs
In June 2019, CVS announced plans to open 1,500 HealthHubs by the end of 2021. Some of those locations will replace existing MinuteClinics. Others will be new locations where CVS-Aetna’s data says customers are.
Compared to MinuteClinics, HealthHubs will:
- Have three or four exam rooms instead of one or two.
- Have a larger staff and offer more services.
- Provide personalized service for patients with chronic diseases.
Help patients with wellness programs.
Health Systems and Providers Must Compete
In many parts of the country, hospitals have already begun implementing their own retail healthcare strategies. They are opening clinics in retail space left behind by the closing of Sears, Kmart and other stores. These shopping center locations offer convenient access for area residents. The retail environments can also provide comfortable waiting areas and short wait times to see providers.
There is more that hospitals and providers can do to counter the growth of retail healthcare. A recent article in Medical Economics listed several ways that physicians can compete. Among the suggestions offered are:
- Extend your hours. You don’t have to do it every day but try changing hours on specific days. Open early some days. Stay late other days. Have weekend hours twice a month.
- Use telemedicine. Patients may not want to travel when all they need is a quick diagnosis or simple prescription. Video visits can help meet their needs.
- Open up scheduling. Providers should keep at least some of their appointments open every day. That helps patients get the care they need when they need it.
- Post prices. Providers can post prices of common services, as retail healthcare clinics do.
- Have a digital patient portal. Make sure patients can get the information they need when they need it through a patient portal.
Offer online scheduling. Let patients schedule appointments online from their computer, tablet or phone.
Hospitals and physician practices can meet the needs of consumers by offering online scheduling. Learn how DocASAP can help.