The “retailization” of healthcare, whereby medical services are marketed and provided much like a retail consumer product, has been a growing trend for several years. Now, the Affordable Care Act is in full swing and it looks like retail healthcare is here to stay, especially after the U.S. Supreme Court ruled on June 26 to uphold the legality of the federal tax credits for people in healthcare exchanges.
Most observers believe the ACA will only accelerate the trend toward retail healthcare. Accenture predicts the number of retail health clinics could double to 2,400 locations in the next three years with the entrance of tens of millions of patients into the system. The firm believes such clinics could manage 10.8 million visits a year and save $800 million in annual health care spending.
Major retailers are launching large-scale initiatives. Walmart has introduced primary care clinics inside its stores offering a suite of basic medical services, at an average cost of $40 per visit. Consider that 90 percent of the U.S. population is estimated to live within a five-mile radius of Walmart! And even before the world’s largest retailer got into the act, retailers including CVS, Walgreens and Target were providing in-store medical services.
In South Florida, Florida Blue is scheduled to open a string of clinics this fall targeting Spanish-speaking consumers. They will focus on new Latin American immigrants, who are accustomed to getting all of their primary care services in one places including emergency care, laboratory work, check-ups, and even some specialty services.
Why is this happening? Because the federal government is rewarding providers that can make basic healthcare services more accessible, affordable and convenient – and the retail model of product delivery already does that very well.
If you’re a provider organization and feel threatened by the proliferation of retail healthcare outlets, you basically have three choices: differentiate, partner, or compete head-to-head. Doing nothing is also a choice, but if you want to be around for a while, it’s not a good one. From a marketing standpoint, here is how you might approach each strategy.
1. Compare and contrast
If your hospital, hospice or medical practice bears no similarities to retail health but you believe medical retailers are stealing your market share, focus on your strategic position and communicate the qualities that make you different and better. Be sure to draw a contrast, or it won’t be effective.
For instance, if you are a tertiary care provider, emphasize the sophistication of your diagnoses, tools and treatments. Educate patients on your training and approach to care. And, make the case that they will want to be in the hands of a genuine expert if they are diagnosed with a serious condition. You should still be diligent in providing excellent customer service and communication, as any good retailer would. However, make it clear that your organization is in a completely different category than healthcare retailers. By saying there is no comparison, you are actually drawing a direct one.
2. Explore partnership or collaboration
Many of the country’s largest and most well known providers are already collaborating with major retailers to open and operate retail health clinics, including Kaiser Permanente and Cleveland Clinic. The benefits to consumers are obvious: they can see well-qualified physicians without waiting for an appointment, at their convenience and usually, at a fixed price.
If you’re not a household name, what can you do? Frankly, it can be difficult for a small medical practice to strike a deal with the likes of Walmart and Target. However, if you are a larger medical practice or a local hospital, your odds are better. Look at the possibility of partnering with smaller retailers in your community who would be a good fit, such as independently owned pharmacies or medical supply companies. Try setting up regular clinic hours and co-marketing to existing and prospective patients.
You can decide which services to offer based on your resources, but you’ll have to adopt the practices of the big-name healthcare retail clinics if you want to be successful—namely, convenient hours, seasonal promotions and fixed pricing. Take CVS Minute Clinics. At any given moment, the content on their home page aligns with market needs and ditto with signage inside their stores. For example, in June they promote camp physicals, provide information on pink eye and offer up insights on seasonal. A few more clicks and you’re on their price list; a camp physical costs $79 and the fee for that pink eye ranges from $79- $99.
3. Game on: compete with the big guys
If options two and three don’t work for you and your organization has the resources to open a retail clinic of its own, you may decide to enter the fray and become a healthcare retailer yourself. If you do, you’ll have to get everyone on board—from the CEO to the clinical staff— and into a retail mindset. Hours, pricing, payment, customer service, and turnarounds must be handled differently than they are if you’re a hospital or other provider who has always done business the old-fashioned way.
And, you’ll have to plan for a healthy marketing budget. If you’re in a smaller market where there is no other healthcare retailer, you have an advantage. However, if you already have a major retailer with an in-store clinic, strong positioning, messaging, imagery or intrusiveness could also be effecitve to gain market share and see a positive ROI.
Whichever direction you go, careful strategy, solid operations, a service orientation and retail-minded marketing will support success—and you may find that you like providing check-ups on aisle 7.
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