In short, the Retailization of Healthcare can be defined by providing consumers easy access to healthcare services. Features that define this emerging and evolving delivery of healthcare are patient accessibility, convenient locations, low acuity, and lower cost setting environments. Value-based care is here and it’s here to stay, so understanding how to navigate this shift will be vital in a reimbursement arena that’s forecasted to see inpatient volume growth by less than 3% over the next decade versus outpatient volume that’s estimated to grow by over 20%. Within that outpatient volume, Truven Health Analytics forecasts that urgent-care services are expected to grow by 120%. It’s evident the delivery of lower acuity healthcare needs are moving toward the direction of retail.
According to The Economist, private equity firms are pouring money into “urgent-care centers,” which are stand-alone emergency wards without the additional costs of a full hospital. These commercial and private equity entrants have led some hospitals to open up urgent-care outposts of their own. We’ve (Welltower Inc) seen this trend locally in Palm Beach County and expect it to grow.
There have been numerous studies that have shown when patients are given the option of utilizing a retail-like clinic versus going to a doctor’s office or acute care hospital, patients are migrating toward the retail-like clinics because of its lower cost and same-day availability. The landscape of patient care is rapidly changing to a consumer-based system and it’s not likely to stop. The Contemporary Clinic states, “this is due in large part to consumers becoming more knowledgeable about insurance packages by doing their own research through the internet. There are several websites that compare and contrast plans to make it easy for one to decide which plan is best for one’s individual needs. This kind of “shopping” is a key part of the “Retailization” of healthcare.
The fight for Market Share has quickly become a result of the retailization of healthcare and it’s been evidenced by industry consolidation with some of the largest healthcare organizations turning toward mergers in an attempt to defend their market share. Most notable in October 2018, the U.S. Department of Justice gave preliminary approval for the $70B acquisition of insurer Aetna by retailer CVS. CVS Health CEO Larry Merlo has begun disclosing new health programs and pilots to test new medical services to keep patients healthy and treat them for chronic conditions, such as heart disease and diabetes, inside the pharmacy chain’s more than 9,700 stores. This is just the beginning and the future of the Retailization of Healthcare.
Article provided by: Gary Gagne, Director of Leasing, East Region of Welltower Inc., is a Trustee Member of the Central Palm Beach County Chamber of Commerce and a member of the Central Palm Beach County Medical Board of Governors. Click here to learn more about the Central Palm Beach County Medical Board of Governors.