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The retail spillover in healthcare

Posted October 3, 2019
red heart in a mini shopping cart

It’s being called the retail-ization of healthcare.

Consumers who are used to the convenience of online shopping, and who hail a ride with a simple tap on their smartphone, are now expecting similar experiences when it comes to their health. Gone is the provider-driven, top-down philosophy of healthcare past. Now, customers are looking for providers that respect their time — and their money.

Three significant retail-ization shifts

There are at least three noticeable ways in which the retail experience is spilling over into healthcare, industry experts say.

The first, says Michael Zucker, CEO and co-founder of FetchMD, is convenience. “Consumers have become very aware and attuned to the different ways in which they can acquire services and goods,” Zucker says. “Think of Uber, Amazon and Airbnb. Consumers are craving that same kind of experience in healthcare.” He adds that customers are also demanding better access and flexibility from providers.

Second, the retail industry’s price transparency is impacting healthcare. “This used to be non-existent in healthcare, but it is becoming more of a topic of concern, which healthcare organizations are seeking to address,” Zucker says. For example, TalktoMira offers a subscription-based model for delivering healthcare services.

The next retail-ization phenomenon to move into healthcare are customer reviews. “Something like 75 to 80% of people will Google their doctor before their visit,” says Ted Chan, founder and CEO of CareDash.com. “Healthcare has very much become like a retail landscape where a consumer shops for a product.”

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Why customers are treating healthcare like retail

Value-driven “shopping” for healthcare is largely because consumers — instead of their employers — are now paying for it, says Zucker. “There’s rapid growth in high-deductible insurance plans and consumers are managing their healthcare needs with a combination of these plans and health savings accounts.”

The general annual deductible for family plans increased a staggering 212% from 2008 to 2018, according to the Kaiser Family Foundation. Ultimately, this means customers have greater out-of-pocket healthcare expenses, and are looking for ways to save money.

The exponential growth of smartphone usage has also been a factor driving the retail-ization of healthcare, Zucker says. “It’s a powerful and convenient tool in consumers’ hands, enabling them to shop for healthcare more wisely.” While this particular phenomenon is only affecting “acute episodic” events like sore throats or the flu so far, Zucker says it won’t be long before care providers in chronic and critical illness management will also pick up on the trend.

The market response

In response to the retail-ization of healthcare, an array of service providers are promising appointments when and where consumers want them. The number of walk-in, retail-style health clinics was predicted to reach 2,800 in 2018 according to Statista. A decade ago, there were a mere 200. This trend is expected to continue picking up speed as more drugstores and private companies embrace the model.

Additionally, more and more online-driven services are enabling customers to book doctors’ appointments via websites or apps, at times and locations suitable to them. This service model disrupts the long wait times that many Americans typically faced when they needed a consultation from a primary care physician. This trend places the customer directly in the driver’s seat, and similar to the retail environment, the car is being driven by three key elements: price, convenience and ratings.

Ratings are key to the equation, Chan says. “Different people want different things from their healthcare experience at different times. If you’re a shift worker or it’s hard for you to get childcare, you probably don’t need to see the best doctor in the world every time, you will be happy with a moderately good one who shows up on time,” he says, adding that ratings can highlight such qualities in healthcare delivery.

The spotlight on customer service

If consumers are adopting retail-like attitudes toward healthcare, that means modern healthcare companies have to offer better customer service if they want to keep — and build — their customer bases.

One area that is seeing a huge leap is online patient portals and appointment scheduling tools. According to various surveys over the past couple of years, at least 70% of customers would rather book, cancel or change appointments online instead of by phone.

Chan says hospitals are also paying attention to customer service by measuring average patient satisfaction scores, and are even adopting retail-based strategies for mitigating the impacts of bad reviews.

The challenge — and opportunity — for healthcare companies

When it comes to healthcare, customers understandably have very high expectations. It can be very difficult for healthcare and insurance companies to win customer loyalty, even when customers are generally satisfied with their services.

To break through that barrier, companies really need to move the needle on excellent healthcare customer service. That includes adopting an omnichannel strategy, as well as perfecting rates of first contact resolution and responsiveness. Healthcare companies may also find success in appealing to consumers by advertising specialized care as a way to differentiate themselves from the flock, says Zucker.

“You’ll see hospitals with specialties in certain surgeries saying they are the best in hip replacement. They’re starting to publish outcomes data, that used to be very hard to obtain,” he says. Greater generation of, and access to, health outcomes data is in itself a net positive for the wider medical community, which is continually working on new medications, technologies and strategies for treating viral and chronic illnesses.

Of course, buying healthcare services is not like buying a new set of headphones on Amazon — but new mechanisms for delivery of care are not far off. Chan and Zucker says it’s time healthcare organizations and even legislators sit up and take notice. While healthcare has always been a multi-billion-dollar industry, it stands to gain much more as new business models and technologies improve access.

“Customers […] are going to shop with their feet and go to institutions that provide a more consumer-friendly and value-driven experience,” says Zucker. “Historically an interaction with a healthcare system was disappointing. That is now changing.”


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