Traditional retailers like Walmart, Walgreens and CVS have found an opportunity in healthcare: delivering expedited, integrated care through their walk-in and urgent care clinics.
Walgreens initially opened walk-in clinics across the country, but then closed all that weren't partnered with health systems in October last year. However, Walmart has moved forward with its plan to open two standalone clinics in Georgia, with a third on its way this summer designed to provide primary care. CVS MinuteClinics staffs nurse practitioners to see urgent care cases and provide basic treatment for issues such as an ear infection.
"Walmart has 140 million people walk through its aisles each week," said Derek Baird, senior vice president of AVIA. "They are not shy in saying they want to replace primary care physician services with a better, tech-enabled experience featuring transparent pricing for a full menu of services including medical, dental, vision, prescriptions and counseling. CVS will bring greater scale even faster."
Within three months of announcing their pilot program of three stores in 2019, the company said they would scale up to 1,500 locations by the end of 2021. These stores could also obviate brand issues plaguing payers, said Mr. Baird. "Both models will raise consumer expectations," he said. "AVIA Network Member health systems estimate there are one to three points of market share at risk, and rising, depending on your market landscape."
Patients find easy access to healthcare at these types of clinics, often at a lower cost than traditional primary care providers. As high deductible health plans and health savings accounts place more financial responsibility on the patient, they are looking at healthcare from the consumer lens and demand a better experience.
"Despite emerging efforts across the [healthcare] industry, a large portion of providers have been slow to update the patient experience and use technology to make it intuitive," said Mr. Hawkins. "This has opened the door for a surprising disruptor: retail. Traditional retail brands like CVS and Walmart know all about how to quickly deploy technology and connect with customers, even with low margins. They are seeing an opportunity to create the kind of low-cost service that will engage customers quickly [through] clinics, online consultations and quick delivery pharmacy."
These retail giants have invested time and capital in the technology platforms and data assets needed to serve customers and change their behaviors; most healthcare providers have not done that. The retail industry is also adept at using incentives for customers, which could be beneficial for value-based care, noted Mr. Hawkins, so the burden of value doesn't fall just on the physician.
"If 20 years of tech disruption has taught us anything, it's that disruption builds over time," he said. "If retailers can gain a toehold in the healthcare market, they can change standards, habits and expectations for millions of people, more than enough to change the U.S. healthcare scene as a whole."
CVS MinuteClinics and urgent care sites focus on delivering episodic care and has generated a big consumer base through its acquisition of Aetna, while Walmart is trying to address access to care issues, especially in rural communities.
"My favorite phrase is that retail is learning healthcare faster than healthcare is learning retail," said Ohio State University Wexner Medical Center CIO Phyllis Teater. "It's important to partner with them as well as learn from them about offering services to people to make it easy for them to consume healthcare. I don't think anybody in the country feels that healthcare services are easy to consume today, and retail is the consumer giant to try to make it easy for their customers and clients to consume their goods and services; our industry needs to make it easier to obtain healthcare."
Another aspect of the changing patient experience strategy is digital health, which offers a convenient point of entry for many health systems. Mr. Baird thinks health systems must go all in on digital front doors to remain competitive in the future.
"This doesn't mean more dabbling in digital health solutions; isolated physician finders or chatbots aren't enough," he said. "This means difficult creative assembly work that delivers a seamless consumer journey from Google search to confirming a physical or virtual visit. Building an integrated digital front door is a complicated, multiyear project that requires investment from many departments, including IT, marketing, strategy, innovation, clinical leaders and more."
Some health systems partner with the retailers or revenue cycle companies to offer new capabilities including telehealth and artificial intelligence that improves administrative processes and access to care. A KPMG study recently found that 89 percent of healthcare executives implementing AI into their administrative processes found improved efficiency and access to care.
"Disruption from non-traditional organizations like CVS and Walmart will continue to define hospital M&A for healthcare incumbents," said Mr. Hawkins. "They will continue to engage in a diverse range of partnerships with other health systems, payers and health IT companies to make care more convenient and easier to access. Furthermore, the introduction of safer, cheaper competition is going to force healthcare incumbents to become more innovative and partner with new health tech companies that could offer them the chance to develop a competitive edge."
Mr. Hawkins sees the new entrants creating more competition for traditional hospitals and health systems, many of which are taking a new approach to the patient experience. "The changes have forced hospitals to improve their data collection, tracking, billing practices and more measuring all aspects of where and how processes can be improved," he said. "The healthcare industry is undergoing a restructuring, with the end patient as its new foundation. In the end, the winner will come down to who can better deliver medical care in the right place, at the right time and in the right amount."
However, the new entrants may not be the biggest change agent in all markets.
Director of Digital Transformation at Springfield, Mass.-based Baystate Health Joe Driver sees hospitals making changes to improve the patient experience as a recognition that healthcare access can be a pain point to consumers instead of reacting to the threat of competition from big retailers.
"The access problem has many complex layers," he said. "There is more movement of the big boys in larger cities and higher margin opportunity. Our region serves a very high government payer population. There is a different strategy but same need by every population. We see challenging social determinants of health and significant community collaboration to serve all, but especially the underserved population. I would suggest that our strategy is quite different and will be more successful in the long run."