Understanding New Models and Players in the Retail-Health Care Convergence

By


New ideas and models of “retail health” are emerging on a regular basis today, driven in part by an empowered and savvier consumer and the convergence of health care business segments, Jane Sarasohn-Kahn, a health economist, trend analyst, consultant and influential blogger, told attendees at the annual VM Summit last month. Sarasohn-Kahn offered her take on the convergence of retail and health care, and she identified new players and business models that are likely to have a significant impact on this marketplace evolution and the powerful forces that are reshaping patients into health consumers.

This new health convergence is moving beyond the old model of retail health, which basically consisted of the “pharmacy” department of a drugstore, Sarasohn-Kahn said in her keynote presentation. She noted how, in October 2018, CVS Health acquired the insurer Aetna, which has sped up the transformation of what retail health will mean going forward.

“This [combination] of CVS and Aetna is retail health, I assure you,” she said. “But this isn’t just going to be a pharmacy. This is something very different.” CVS Health is going to be “reinventing and reimagining” what a pharmacy is, she said, noting that executives across all of health care are asking “the same exact questions as you are [about this convergence] in retail health.”

Sarasohn-Kahn also noted that CVS Health’s chief transformation officer stated a few weeks ago that the name CVS HealthHUB is being registered as a trademark and that the company sees this format as “a new front door to health services” and the way health services and wellness are delivered to people in their community.

Initial images of the HealthHUB format show an eye chart on the wall, which Sarasohn-Kahn said leads her to believe that “vision will be involved” in these new CVS HealthHUB locations. “Think about the morphing and evolution of this retail health ecosystem,” she added. “The pharmacy today has “all kinds of different footprints and models.”

The FDA, too, is taking steps that are reshaping health care, and it has cleared devices for use by patients to do home monitoring of certain health conditions. “This is a new, new thing and data are emanating from that,” Sarasohn-Kahn said. “We are going from the physical to the virtual in health care, all the way through,” she said, noting that even “grocery” today has a health and wellness connotation in some instances. “Food as medicine is a very big deal.”

Even the mid-priced Kohl’s department stores are moving into health care, with the opening of WW studios (formerly Weight Watchers) inside a few Kohl’s stores, she said.
 




Jane Sarasohn-Kahn, THINK-Health and Health Populi.


An Evolving Health Care Consumer
As an indication of how the consumer mindset toward health care is changing, Sarasohn-Kahn said that the terminology “pre-existing conditions” was quite recently just “a very wonky concept that only people in my world of health economics talked about until about four years ago.” Today, however, consumers are much more aware of the meaning of pre-existing conditions and how they are addressed in health care plans by payers.

Today’s consumer is now much more aware of health care costs and concerns, she said, which she attributed to “three big things” that have really shaped patients as consumers. The first was the recession of 2008, when retirement plans got hit hard by the stock market downturn. “Consumers became much more do-it-yourself oriented,” she said.

The second thing that happened was the advent of the smartphone. “The adoption of the smartphone changed everything for most people and even most people now over 65 years of age are carrying around a smartphone,” she said. “This means they are carrying around a little computer with them all the time, where they, of course, can shop and check the prices of a prescription, and/or access health information before they go to the pharmacy.”

The third element is “the Amazon Prime-ing of the consumer, particularly the health consumer,” Sarasohn-Kahn said. “This is a big deal. We are all now about omni-channel and omni platform.”

She used the term “homo informaticus” to describe today’s health care consumer.

Addressing the Amazon impact, Sarasohn-Kahn said the online retailer has visions that go well beyond Whole Foods for healthy food. “Amazon in health care is a big deal and it’s [growing] bigger and bigger,” she said, noting that Amazon is hiring high-powered executives with experience in pharmacy, experience in AI for health, and experience in hospital and clinic management.

“And none of us really know exactly what Amazon is going to do because they are not entirely transparent,” she said. Amazon acquired PillPack in 2018 with the idea that it could change the consumer/patient experience around medication delivery and adherence, she added.

“Alexa also is being called up to help with medication adherence, prescription drug ordering, and any number of health care things,” she said. “Alexa has been very popular and quickly growing, not just in people’s homes, but in health care, too,” she said.

— Mark Tosh, Senior Editor



This video includes highlights of the following Summit speakers: Jane Sarasohn-Kahn, THINK-Health and Health Populi; WebMD’s John Whyte, MD; Roger Smith, AdventHealth Nicholson Center; Justine Santa Cruz, Satisfi Labs; Amy Heymans, Mad*Pow; John Ryan, UnitedHealthcare Vision; and Dave Bovenschulte, Klick Health.