Last week we learned that retail health giant, CVS Health, was to acquire Signify Health, gaining access to their well-established end-to-end healthcare platform for a little over $30 per share. The news illustrates a growing trend as consumer powerhouses like Amazon shift into the market, blurring the lines between retail and healthcare— threatening to replace the traditional PCP model by bringing healthcare directly into patients’ homes.
The CVS primary care model aims to create physician-led retail clinics similar to the strategy we saw Walgreens execute with its VillageMD investment last year. While the Signify deal has been getting a lot of attention, CVS just quietly joined forces with Amwell and announced plans to launch a virtual care service next spring. Signify’s robust network, of over 200 health systems and 10,000 primary care providers, will undoubtedly create a major competitive advantage for CVS by fast-tracking their transition into virtual care.
Meanwhile, though the dust has yet to settle on the One Medical news, Amazon is already testing a direct-to-consumer telehealth service. The swift pace at which these organizations are developing alternatives to traditional care is more than a little concerning, especially for the established providers still struggling to recover from the financial fallout due to the pandemic.
“What we all are watching and concerned about is what impact this could have on the way healthcare is delivered in the United States.”
-Ken Kaufman, Kaufman Hall
With so many other burdens resting on the shoulders of health systems, it’s difficult to know how to strategize for new competition of this kind. It’s true the “consumerization” of care has been a growing concern, but the upcoming market challenges are more than a shift in focus to personalization and modern engagement technologies. It’s a shift to complete “retailization,” a model that puts convenient care access at patients’ fingertips to deliver pre-packaged services, sometimes literally, to their doorstep.
But the success of the retail healthcare model will be determined by one thing: patients.
Despite the deep pockets and new tech that consumer companies bring into the healthcare space, traditional providers have one clear advantage— they’ve already earned patients’ trust. The success of these new care models still rests firmly on whether or not patients want to trust their healthcare with the same company they get their monthly toilet paper subscription from. But health systems should be mindful not to fall too far behind the curve in terms of access and convenience. Failing patients in these areas could drive them to seek services elsewhere.
Though providers shouldn’t ignore these kinds of industry disrupters, ultimately people are creatures of habit. Emphasizing good patient relationships and making improvements in your existing access experience can maintain loyalty to your organization— if you are meeting your patients’ expectations for ease of use then they have no reason to shop around.