A retail health strategy can help hospitals meet goals of increased quality and reduced cost by providing preventive care and linking patients to primary care physicians. However, moving into the retail health space also presents risks and challenges to hospitals and health systems. Matt Montgomery, senior vice president of the healthcare division of Buxton, a consumer analytics firm, shares five questions that healthcare leaders should ask when considering a retail health strategy.
1. Is a retail health strategy right for the organization? The first — and perhaps most challenging — question hospital leaders should ask is if a retail health strategy would be effective for their organization. To determine if a retail health strategy is right for a given organization, hospital leaders will need to weigh the costs, such as the costs of opening new locations and training employees, against the benefits, such as gaining a new entry point into the organization and providing a convenient service to patients.
Mr. Montgomery suggests hospitals should at least be open to the idea of integrating retail health into their offerings. "The biggest challenge I have seen is for health system leadership to embrace the notion that the wave [of retail health] is not only coming, but it has already washed ashore. If they're not doing it, their competitors are, or are considering it."
2. Should we partner with or become an operator? If hospital leaders commit to a retail health strategy, the next question they will need to ask is if they want to partner with an existing operator, such as RediClinic and CVS' MinuteClinic, or become an independent operator. For example, Naperville, Ill.-based Edward Hospital and Health Services launched its own retail clinics in Jewel-Osco pharmacies in November.
To decide whether to partner with an existing operator or operate the clinics independently, hospital leaders should analyze the retail environment. If the market includes a well-known retail clinic operator with an established brand that is willing to partner, hospitals may want to consider a clinical affiliation. If a hospital or health system is large and has its own established brand, operating clinics independently may be an effective strategy, according to Mr. Montgomery.
3. How can we educate our providers? One of the biggest challenges in developing a retail health strategy is gaining the buy-in of providers who perceive retail clinics as potential competitors to their practice. Hospital leaders can gain their buy-in by demonstrating how retail clinics can have a synergistic relationship with physicians and hospitals by referring patients to a physician's practice when appropriate.
"The immediate thing that comes to mind [for] those physicians is 'This is a competitive threat to my practice,' when in reality they should view it as a value add to the market that will only enhance patient volumes," Mr. Montgomery says. He suggests hospital leaders proactively discuss with physician leadership both their overarching retail health strategy and the tangible benefits that retail clinics provide by referring patients to physicians' practices.
4. How can we educate the marketplace? When embarking on a retail health strategy, hospital leaders also need to determine how to educate the community on how their retail clinics should fit into consumers' overall healthcare. "While retail clinics have been around for some time, there's still quite a bit of an awareness gap in terms of the populace from the standpoint of, 'If I have x condition, where do I go?'" Mr. Montgomery says.
Hospitals should educate the community on the appropriate sites of care for various needs so that patients know when they should go to the retail clinic, urgent care clinic, emergency department or primary care physician.
5. Where should the clinics be located? Hospitals using a retail health strategy need to consider several factors when deciding where to locate retail clinics. For hospitals that partner with established retail clinic operators, the choice may be easier because it is limited to the locations the operator already has open. For hospitals partnering with a local retail clinic operator or creating their own retail clinics, the decision is more complex.
Many retail clinics are located within "host" retailers, such as grocery stores, to provide convenient access for patients. Hospitals need to recognize and address the different needs of hospitals compared with retail stores when deciding whether to partner with a specific retailer. "There's an inherent conflict between the real estate a health system might want from a location standpoint, versus the retail space a retailer might want the health system to occupy," Mr. Montgomery says.
For example, a health system would likely not want to establish a retail clinic in a store with relatively low revenue compared with other stores within that market, while the retailer may want the health system to choose that location as a way to attract more consumers to the store. Conversely, a health system may want to move into a high-volume store, but the retailer may prefer to dedicate that square footage to additional merchandise or other service offerings. "It behooves the health system to analyze the existing network of stores or locations for those potential hosts to understand where there might be the greatest opportunity from a placement standpoint," Mr. Montgomery says.
In addition, hospitals need to choose retail clinic locations that are complimentary to their other facilities throughout the larger market. Spacing sites of care appropriately helps ensure access to care for the greatest number of patients while working to minimize potential cannibalization impacts from within the system, Mr. Montgomery says.
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1. Is a retail health strategy right for the organization? The first — and perhaps most challenging — question hospital leaders should ask is if a retail health strategy would be effective for their organization. To determine if a retail health strategy is right for a given organization, hospital leaders will need to weigh the costs, such as the costs of opening new locations and training employees, against the benefits, such as gaining a new entry point into the organization and providing a convenient service to patients.
Mr. Montgomery suggests hospitals should at least be open to the idea of integrating retail health into their offerings. "The biggest challenge I have seen is for health system leadership to embrace the notion that the wave [of retail health] is not only coming, but it has already washed ashore. If they're not doing it, their competitors are, or are considering it."
2. Should we partner with or become an operator? If hospital leaders commit to a retail health strategy, the next question they will need to ask is if they want to partner with an existing operator, such as RediClinic and CVS' MinuteClinic, or become an independent operator. For example, Naperville, Ill.-based Edward Hospital and Health Services launched its own retail clinics in Jewel-Osco pharmacies in November.
To decide whether to partner with an existing operator or operate the clinics independently, hospital leaders should analyze the retail environment. If the market includes a well-known retail clinic operator with an established brand that is willing to partner, hospitals may want to consider a clinical affiliation. If a hospital or health system is large and has its own established brand, operating clinics independently may be an effective strategy, according to Mr. Montgomery.
3. How can we educate our providers? One of the biggest challenges in developing a retail health strategy is gaining the buy-in of providers who perceive retail clinics as potential competitors to their practice. Hospital leaders can gain their buy-in by demonstrating how retail clinics can have a synergistic relationship with physicians and hospitals by referring patients to a physician's practice when appropriate.
"The immediate thing that comes to mind [for] those physicians is 'This is a competitive threat to my practice,' when in reality they should view it as a value add to the market that will only enhance patient volumes," Mr. Montgomery says. He suggests hospital leaders proactively discuss with physician leadership both their overarching retail health strategy and the tangible benefits that retail clinics provide by referring patients to physicians' practices.
4. How can we educate the marketplace? When embarking on a retail health strategy, hospital leaders also need to determine how to educate the community on how their retail clinics should fit into consumers' overall healthcare. "While retail clinics have been around for some time, there's still quite a bit of an awareness gap in terms of the populace from the standpoint of, 'If I have x condition, where do I go?'" Mr. Montgomery says.
Hospitals should educate the community on the appropriate sites of care for various needs so that patients know when they should go to the retail clinic, urgent care clinic, emergency department or primary care physician.
5. Where should the clinics be located? Hospitals using a retail health strategy need to consider several factors when deciding where to locate retail clinics. For hospitals that partner with established retail clinic operators, the choice may be easier because it is limited to the locations the operator already has open. For hospitals partnering with a local retail clinic operator or creating their own retail clinics, the decision is more complex.
Many retail clinics are located within "host" retailers, such as grocery stores, to provide convenient access for patients. Hospitals need to recognize and address the different needs of hospitals compared with retail stores when deciding whether to partner with a specific retailer. "There's an inherent conflict between the real estate a health system might want from a location standpoint, versus the retail space a retailer might want the health system to occupy," Mr. Montgomery says.
For example, a health system would likely not want to establish a retail clinic in a store with relatively low revenue compared with other stores within that market, while the retailer may want the health system to choose that location as a way to attract more consumers to the store. Conversely, a health system may want to move into a high-volume store, but the retailer may prefer to dedicate that square footage to additional merchandise or other service offerings. "It behooves the health system to analyze the existing network of stores or locations for those potential hosts to understand where there might be the greatest opportunity from a placement standpoint," Mr. Montgomery says.
In addition, hospitals need to choose retail clinic locations that are complimentary to their other facilities throughout the larger market. Spacing sites of care appropriately helps ensure access to care for the greatest number of patients while working to minimize potential cannibalization impacts from within the system, Mr. Montgomery says.
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