Retail Healthcare Trends & Impact on Providers and Health Plans
Accessing healthcare via retail isn’t new. Pharmacies were typically the first store to open in a town back in the 1800s. But, since 2000, retail healthcare has been on an accelerated journey that’s disrupting and addressing numerous healthcare trends. Fifteen years ago, there were 258 retail health clinics, and now, according to the Convenient Care Association, there are 3,300+ retail clinics in 48 states and Washington, D.C., including Mexico and Canada. Today, nearly one in five American adults use retail healthcare. But, why is retail healthcare taking off now, and how will it impact traditional healthcare?
Retail Healthcare Looks to Fill Primary Care Gaps
A 2019 Chilmark report cited research that 17.3 percent of adults have no reliable access to care, including emergency care, and that 34 percent of adults have not had contact with a medical professional in the prior year. It’s clear that primary care has struggled to keep up with demand for many years with physician organizations warning of impending shortages. Over those years, increased practice authority has grown for physician’s assistants and nurse practitioners to help fill that gap. Retail healthcare is focused on filling the primary care gap, providing access in “care deserts” where the closest physician could be 30 miles or more away. Americans spend, on average, 34 minutes driving to the doctor’s office or other medical entity and 11 minutes waiting to be seen. According to Chilmark, wait times in large cities increased 50.3 percent from 2014-2019, and, in smaller towns, wait times grew over 178 percent during the same time period.
Putting Consumer Convenience in Perspective
Then there’s consumer convenience, which is not only about providing services as part of a customers’ daily life and errands, but it also means providing care at the time of day and via the delivery channels that fit busy and mobile lives. The CDC says that nearly nine in 10 Americans live within five miles of a community pharmacy. Plus, 90 percent of Americans live within 10 miles of a Walmart store, and 75 percent now live within five miles of a Dollar General. When you consider that Amazon Prime has over 200 million members in 2021, the power of retail in healthcare is evident.
Retail Healthcare’s Cost & Transparency Edge
Lastly, there’s transparency and cost. Nearly 25 percent of Americans skipped medical care because of cost. While new regulations require greater pricing transparency, retail healthcare provides greater transparency and more reliable, consistent pricing for services with or without insurance coverage. During a PsychU webinar, Monica Oss, CEO of OPEN MINDS, highlighted that over the past 15 years, the amount paid by patients was three to five percent, and now that amount is 15 percent. She said that consumers ask themselves, “Why should I do this and why with you?” Employers are also concerned about how retail can provide better value to their employees at convenient locations and times. According to Modern Healthcare, “care provided at retail clinics costs around 30% and 80% less than similar treatment at physician offices and emergency departments.”
Retail Healthcare Gaining the Vaccination Customer
The Federal Retail Pharmacy Program for COVID-19 Vaccination increased the number of locations where Americans could receive a vaccine. Many retailers acquired a large volume of consumer information as part of this program that they wouldn’t have otherwise. Additionally, for consumers who hadn’t thought of or used a retail channel to access healthcare before, using retail for their vaccine provided greater awareness and exposure to new ways of getting care, when you consider that “Americans prefer to receive their COVID-19 vaccines from a trusted healthcare provider, such as their pharmacist or physician, rather than being immunized at a mass event,” choosing retail makes sense.
Retail Healthcare Trends: Keeping up with who is doing what.
Retail healthcare is a fast-moving, dynamic industry right now. There are news items announcing new partnerships, new start-ups, expanding care, and more locations every day. Here’s the latest as of the end of 2021, demonstrating a trend towards retail healthcare taking up more parts of primary care.
CVS offers two care models – MinuteClinics and HealthHUBs. MinuteClinics was the first retail clinic to receive Joint Commission accreditation in 2006. In 2016, MinuteClinics acquired the retail health clinics within Target stores and completed their $69B Aetna merger in 2018. MinuteClinics started offering video visits that same year, available in 48 states and Washington D.C. With more than 1,100 MinuteClinics in 35 states, they employ 3,500 full-time NPs, RNs, licensed vocational nurses, and LPNs. CVS Health provides care for children starting at 18 months through adulthood, including acute care, care for chronic conditions, and preventive and wellness services.
HeathHUB locations opened in 2018. CVS HealthHUBs are available in 650 of their 9,967 locations in 40+ states. Beyond pharmaceuticals, their services include care for minor injuries and illnesses, immunizations, annual exams; management of high blood pressure, high cholesterol, sleep apnea, Type 2 diabetes; screenings, monitoring and treatment options; long-term care services, and mental health services. Telehealth services are also available from almost every location. As of 2021, CVS is piloting behavioral health services in 34 states via in-person and telehealth. CVS will be closing 900 stores between 2021 and 2024 to focus on broader retail healthcare strategies.
Walgreens Health Corners are in five locations with 80 locations by 2022, 600 locations by 2025, and 1,000 locations by 2027 in 30 states out of a total of 9,277 locations. In addition to pharmaceuticals, services include a full medical clinic, laboratory, vision and hearing, women’s health, pediatric services; weight management programs; and management of diabetes, hypertension, asthma, and mental health conditions. They’ve committed $1B to meet their goal. Their program, called VillageMD, will expand over the next five years to offer primary care across U.S. stores, which physicians staff.
Walmart Health Centers are available as 20 standalone health centers with plans for another 4,000 primary care “supercenters” in its stores by 2029. Services include full medical clinics, pharmacy, optometry, dental clinic, x-ray services, hearing services, immunizations, and behavioral health services. Telehealth services are also available.
Amazon Care is available to employees in 610 warehouses and 17 Whole Foods locations. Amazon Care currently offers complete medical services to its employees and other companies, starting with Precor and Hilton, with plans to expand in person services to 20 states in 2022. It offers a full range of routine care and urgent care telehealth services, along with a virtual pharmacy. Their telemedicine service is licensed in all 50 states. The company is also launching home care services in selected states and recently launched their eldercare subscription service called Alexa Together, which provides a hands-free urgent response emergency helpline compatible with third-party fall detection devices. Launched in May 2020, its Amazon Pharmacy service offers a prescription savings benefit and a feature that allows customers to check their insurance co-pay before ordering their medication.
Kroger offers 220 Little Clinic locations in 35 states as part of their overall 2,728 supermarkets. Their health services include treatment for minor injuries and illnesses; skin conditions; vaccinations; physical exams; services for chronic health conditions like behavioral health and addictions; dietician services; laboratory services; mammogram services; hearing tests; and tobacco cessation. Telehealth is available for most services.
Dollar General has 17,000 locations in 46 states. Around 65% of their stores are in the health and medical “deserts.” In July 2021, Dollar General hired a chief medical officer to develop health care services and product offerings, including exploring options such as offering eye exams, telemedicine, and prescription drug pickups.
Payers and Provider Organizations are Getting into Retail Healthcare
Kaiser Permanente is opening 35 retail clinics and adding four clinics in Southern California Target stores. Novant Health opened three retail clinics in Walgreens stores in North Carolina to extend their primary care practice. Payer organizations, like Aetna, are also partnering with retail by offering unique retail-first or connected products. Aetna-CVS Health was launched last year in Kansas City, combining CVS Health services with Aetna’s I-35 Preferred Network. Their premiums are ~20% lower than other preferred provider products.
Where Does (or Should) Retail Fit into Your Healthcare Product or Service Strategy?
From research to consumer insights to strategy, business model, operations, and technology implementation, we can help you decide if and where retail fits your business and care goals and accelerate launch. Create a competitive advantage tailored to your market and your organization.