(please see previous post as well)
Many start-ups that I’m working with are disrupting in one way or another the traditional healthcare value chain. There are (at least) three new connections that are re-inventing how the healthcare is provided to citizens (see red arrows in the diagram). In essence, what is happening is that the three actors are interacting more and more between them in many different ways.
Payers have traditionally disintermediated financers by requesting and paying services directly from MDs (i.e. in private practice). And now, a new model emerges: retail healthcare. When it comes to routine healthcare, many consumers want more convenient, faster, and more affordable care. The idea of retail healthcare (a chain of private “minicenters” at malls or other high traffic areas, treating common family illnesses, with no necessary appointment and open 7 days a week) makes a lot of sense. Many entrepreneurs saw the trend and reacted accordingly. Currently, there are three initiatives going on in the US (MinuteClinic, RediClinic, and TakeCareHealth) and their expansion is phenomenal (from one to more than 600 clinics in just 4 years). And it does not stop here. The expansion plans of these three companies are predicting a tenfold increase in the next years. Maybe (sooner than we think) bold entrepreneurs will bring this concept to Europe.
Payers and producers are talking to each other as well. More and more citizens buy healthcare goods directly from producers. A good example would be citizens “sequencing” their genome at 23andme (see previous post). This is just one of the multiple implications of the advent of Consumer Driven Healthcare (concept coined by Regina Herzlinger): a healthcare system where citizens take an active role in managing their health and are ready to pay for it. Consumer-Driven Health Care brings to healthcare the benefits that other consumer-driven industries enjoy—choice, information and control—plus more focused and integrated care. The results: improved quality at reduced cost.
Finally, I see as well projects willing to bring personalized medicine to the marketplace. Personalized medicine means distributing “one tailored product” to “one patient” at a time, and therefore it is a model where traditional distributors tend to be disintermediated. Producers interact with providers in a one-on-one relationship (i.e the doctors send the requirements to the producer and the producer sends the “personalized” goods straight to the hospital).
As we can see new business models are coming to the marketplace, distorting and re-inventing the value chain.
1 comments:
The retail/in-store clinic movement is more than a highly beneficial strain of “disruption” to the primary healthcare delivery system. Looking forward, it should also be a significant catalyst and test-bed to improve community health status.
This strategy entails e-collaboration with a robust referral care network harmonizing enabling tools related to consumer-directed wellness, early disease detection and disease management services. Add a hefty dash of one-on-one customer rewarding based on health risk appraisal completion. Follow up with sequential adherence-based economic incentives fulfilled through behavioral target marketing with customized couponing triggered by the HRA findings, seasonal drivers, and respondent demographics. Similar reward triggering could be based on benchmark attainment within disease management protocols.
Win-wins arise building loyal families in touch with new teams of wellness providers. It’s opt-in and HIPAA immune, and is freed from the babble generated by a zillion committees, taskforces, and “working” groups intent on cyber transacting everything. To the extent progressive local and regional health systems are included, the smoother the political sailing. For example, a Blue Cross plan could co-venture production of selected services. Local VNA and health departments would continue to make excellent staffing partners for short-lived campaigns such as back-to-school vaccinations. With insurance coverage arising and rising, the customer is the beneficiary regardless of the chosen production function.
Service demand can be continuously driven by demographic (gender and age) thresholds per U.S Public Health Service guidelines. Such info is captured within the HRA completion process to trigger sentinel announcements (for example, 50th birthday) and invites along with customized coupons to promote visiting the clinic and the store. Intervention opportunities also arise seasonally. Examples include the promotion of back-to-school and vacation-prompting vaccinations, flu season shots with pneumonia piggy-backed on, spring and fall seasonal allergies, and national body part (i.e., Breast Cancer) of the month campaigns.
Why Retail Clinics as the Locus for Change?
Incumbents in the retail clinic space grow because their business case is compelling, enterprises are sufficiently capitalized and customer experiences are highly scored by all relevant satisfaction metrics. These operations are still in early growth facing normal start-up woes:
Uncertain ROIs and break-even points, staffing, information capture and work-flow patterns
“Without the doc” risk-averse service menus, voluntary script dispensing/selling firewalls, constrained spatial layouts and low-ball pricing.
Thus, there is plenty of wiggle room to now plan additional functionality as the kinks get worked out and consumer acceptance grows. As competition increases, investment drivers include the need for continuous product improvement and differentiation as well as for satisfying large customer cohorts shifting from latent to expressed demand for diagnostic, immunization and screening services. In-store worker-focused risk assessments add icing to the convenience cake, especially by filling in off-peak appointment slots, smoothing work flow and reducing queues and wait times. (Workers’ rewards must be nondiscriminatory per U.S. Department of Labor regs compared with customers’ rewards.)
Like Lipitor, the “daughter products” released after its ingestion are more beneficial than the original dose. Sensible protocol-based and decision-supported adult primary care is the core retail clinic output platform now in place. Providing appropriate consumer-assisting programs with health systems co-venturers builds upon sunk investments at low marginal cost.
In many urban and rural communities, the default locus for free “medical advice” has traditionally been the neighborhood pharmacist. The retail clinic can expand this tradition with one-on-one assistive and practical care in terms of fuller primary prevention services that are disease- or body-part specific.
Many screening and testing services have been battle-tested in drug stores, at health fairs and convention lobbies and within assorted clinics of all stripes. More recently, based on strong empirical evidence from workplace wellness settings, providing customized incentives and rewards is essential to “get people to the last mile” to initiate behavioral change. This might become an especially compelling strategy with the deployment of emerging home-based disease management products incorporating remote monitoring. Incentives could take many forms from reward programs to price discounts on in-store goods and services.
Convenient Primary Prevention Would Gain Equal Footing with Convenient Care
Given pervasive techno-chaos within the overall healthcare industry, it takes business discipline and standardization to harmonize appropriate processes and technology. Just consider the hundreds of options flowing from web-based and traditional programming in risk assessment and personal auditing and tracking programming including health risk appraisals, HSAs and derivative financial products, mini personal health records, electronic medical records, chronic disease management with remote monitoring, behavioral targeting and one-on-one relationship marketing and loyalty card systems.
Each of these now operate under different parentage – from health departments, governments, self-insured large employers, progressive unions, managed care organizations, classic insurers, marketing services firms and, increasingly, by customers themselves. Many have or will become zero-priced commodities. The good news is that all are adjunctive to enhancing the retail clinics’ care and caring missions.
The retail clinic could assume employers’ traditional role in health risk appraisal to get incentive packages, monitoring and benchmarking locked and loaded. Then, many follow-through tests and procedures are done in store with out-referral when appropriate. Record keeping would be online and really simple. It’s like installing training wheels for the emerging PHR and EMR systems. These convergent systems are typified by early developer groups such as WebMD while Google is constructing a PHR system.
Caring Processes are Inseparable from Care Processes
Retail Clinic 2.0 positioning is not glitzy PR to deflect the opening blows by organized physician groups that wrongly perceive negative competition from nurse practitioners and others. The reality is all PCPs (and, more importantly, their patients) will be universally better off if they begin to mimic some of the critical convenience, staffing, IT and pricing success factors put in place by the retailers.
The docs are far from being disintermediated; they can be emancipated from the routine sniffles and scratches while remaining wired in, utilizing their time and skills more appropriately and productively. Ditto for our under-funded public health clinics that will face huge work flow and staffing problems as prevention and wellness eventually obtain public and private core financing. Latent demand for the 55-year-olds and kids is likely to explode if Medicare expands down and SCHIP widens.
Recent AMA opening moves challenging the emerging retail clinic industry’s usurpation of physician roles and functions were inevitable. It’s fuming again but will lose the battle because:
Their economic self-interest becomes more visible than their patients’,
The inherent cost-effectiveness of the current approaches is readily apparent to customers (especially where services are insured), and
Business groups, governments, employers, public health associations and insurers all welcome price and quality competition wherever and whenever they find it.
Dr. Lawrence Stiffman - Dr. Lawrence Stiffman is a domestic and international health planner active in market, marketing and survey research, policy analysis and program planning. Based in Ann Arbor, Michigan, he has led the Applied Statistics Laboratory for 28 years. He holds a Ph.D. and MPH from the University of Michigan where he was a former lecturer in the School of Public Health.
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