Nearly one-half of U.S. households gladly pay $99 for a year's subscription to Amazon Prime, the guaranteed two-day delivery service that comes with the service. Restaurant-goers make instant reservations on OpenTable, transfer cash from one account to another via banking apps, and order up fresh food ingredients delivered to the home to DIY dinner. As more consumers come to expect home delivery and just-in-time DIY for activities of daily living, people are also hungry for health care on their own terms.
To serve up that demand, retail health is coming of age. Twenty years ago, when I would utter the phrase "retail health" in my work advising the health/care industry, my communicants heard the word "pharmacy." Today, retail health is broad and deep, and the Big Box store, grocery chains, and discount merchants are growing channels for consumers wishing to receive a different flavor of healthcare.
That new breed of healthcare is more immediate, more price-transparent, more accessible, and cheaper than services received in the "legacy" health care system of hospitals and doctors. These retailers aren't competing for acute care services -- they're not offering inpatient care beds or diagnostic imaging... yet. But it's health care's front door they're providing an on-ramp to: primary care and preventive services.
In the United States, there's a primary care shortage which some researchers believe is in crisis. The American Association of Medical Colleges forecasts a primary care shortage of as many as 90,000 physicians who are trained to provide front-line care -- the accessible on-ramp into health care. The Health Resources and Services Administration, part of the U.S. Department of Health and Human Services, points to an especially-acute health professional shortage in rural America. Access to primary care is a major input into a healthy society. The American College of Physicians noted 10 years ago that primary care was in "grave risk of collapse due to dysfunctional financing" in the US health system.
Primary care encompasses the very services for which other developed countries invest more health care dollars. Denmark, France, Germany, and the United Kingdom, among other members of the OECD, spend fewer taxpayer dollars per capita on health care than the US spends, but they have far healthier citizens. The evidence shows that health citizens living in countries with strong primary care backbones have better outcomes than people living in the U.S. Primary care is a major determinant of a public's health.
The Big Boxers and other retailers are growing their health care muscles beyond their core health offerings. All of the retailers start with a pharmacy at the core, and not just the pharmacy chains. Walmart pioneered the $4 prescription for a generic in 2006. Today, Walmart's vision care department serves up more pairs of prescription glasses than any other retail outlet in America. The company has operated urgent care clinics for years, and recently introduced a new primary care clinic concept where, for $4, a Walmart employee can receive a physician visit; for a non-Walmart employee, the cost is $40. If you're on a high-deductible health plan, or no health plan at all, that's a compellingly low price for a visit with a primary care doctor.
CVS was known as CVS/pharmacy before it gave up selling tobacco in 2014 and rebranded as CVS/health. The company now operates Target's clinics and pharmacy (with CVS branding inside Target stores), bought a specialty pharmacy company to channel high-cost medicines, and offers telehealth services delivered through three partners: American Well, Doctor on Demand, and Teladoc.
Kroger, the grocer, has leveraged its health footprint through food, the pharmacy, a growing cadre of dietitians in the store, an array of health screening services and wellness programs like smoking cessation. The grocer has even edged toward healthcare by working with a family practice clinic in an Ohio community and sharing the physician's electronic health record to coordinate care for patients. "We are striving to become a wellness destination," a Kroger pharmacy merchandiser noted.
Insured health consumers in the US are bearing a growing proportion of total costs, notwithstanding the adjective "Affordable" which is followed by the noun "Care Act." As Main Street workers' wages have stagnated over the past fifteen years, their health care cost burden has substantially grown and outpaced household income. Increasing out-of-pocket costs, in the forms of high-deductibles and greater cost-sharing designs in health plans, are aggressively putting patients in the starring role of consumers.
And consumers who spend first-dollars for health care out of their own pockets -- and the family budget -- can demand service, convenience, cleanliness, empathy, and other features they value. This is, after all, what underlies the theory of consumer-driven health care: the skin-in-the-game hypothesis that, if you nudged patients through behavioral economics, they would make more rational health spending and utilization decisions.
That scenario outcome hasn't come full circle... yet. But a consumer survey conducted by PwC has a clue about where the consumer-directed health market is going. PwC found that as many US adults trust large retail, digital companies, and health care providers to help them manage their health. Let me translate: the same proportion of health consumers trust Walmart, Target and Kroger, and Amazon, Apple and Google, to help them manage their health as they trust their local hospital and doctor to partner with them in health.
Why was this the case? There are two over-arching reasons: retailers and digitally-enabled companies have price transparency and value propositions that consumers can get their arms around. Hospitals and doctors? Not so much.
The current trajectory of health care cost growth, coupled with the prevalence of high-deductible health plans and the financial health risk-shift to consumers, to bolster the growth of retail health. Expect that Big Box store, along with grocers and popular discounters, to proliferate communities, and especially rural areas that have been underserved. Telehealth and food-as-medicine will be among the services provided there, and consumers will value them if they are designed, organized, delivered, and priced based on consumers' preferences .
Next stop -- health at the dollar store and drive-through immunizations? Coming to a community near you...
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