Experts have been speculating for years that the future of healthcare is retail. And while that theory may still be coming to fruition, the emergence of a global pandemic could have things looking a little different from the clinic-on-every-corner model we had envisioned.
Despite, or perhaps because of, coronavirus-related restrictions, early figures suggest retail healthcare is booming in the age of COVID-19. In Q1 2020, around the height of the pandemic in the U.S., CVS Health reported $66.8 billion in revenue — up from $61.6 billion in Q1 2019.
Although much of that growth is attributable to an influx of demand for essential goods, digital health comprised a substantial portion. During CVS’ May 2020 earnings call, CEO Larry Merlo reported an approximately 600% increase in utilization of telemedicine for virtual visits, a more than 1,000% increase in prescription home delivery and an approximately 50% increase in specialty pharmacy digital refills.
The Retail Health Movement at a Glance
The ‘retailization’ of healthcare has been long in coming, and the nation’s largest retailers have been at the center of the shift. September 2019 saw the opening of the first Walmart Health center — a concept Walmart Health & Wellness President Sean Slovenski described to Forbes as “a super center for basic healthcare services.” That same month, Amazon began piloting Amazon Care, a virtual health clinic for its Seattle employees. CVS’ HealthHubs, which offer expanded in-store health services and wellness products, are expected to increase from 50 locations in 2019 to 1,500 by the end of 2021 — this, despite the pandemic, according to Forbes.
Convenience & Accessibility
A driving force behind the retail health movement has been the need for more convenient and accessible care options — both for the connected healthcare consumer and vulnerable individuals for whom access to care may be limited. Pre-pandemic, this looked like the ability to enroll in health insurance, get an EKG and pick up groceries all in one location. Post-pandemic, well, that has yet to be seen. But the fundamental advantages retail health clinics offer — transparent and lower pricing, convenient hours and locations, on-demand service and more — will likely continue to underscore retail’s role in healthcare. This is especially evident from the COVID-19 crisis, when what was once a matter of convenience has become one of health and safety.
Accelerating the Shift
As with traditional retail, the ongoing shift from brick and mortar to the digital health storefront could gain momentum in light of recent events. As COVID-19 changed the way we access everything from healthcare to groceries, hospitals, health systems and clinics were forced to pivot their operations, giving way to digital health as a convenient and safe alternative to certain in-person health services.
In recent years, unconventional partnerships between the retail and healthcare industries — such as retail and telehealth — have been fodder for discourse, often in the context of emerging trends or potential disruptors to watch. What we’re seeing across industries, and in healthcare, in particular, is that many of these trends are accelerating or evolving as the pandemic drives shifting and soaring demand. Telehealth, which has generally been slow but steady on the uptake, saw a 50% increase in visits in March 2020, according to research from Frost and Sullivan consultants cited by CNBC. And as CVS’ recent surge in telehealth usage suggests, retailers who have forged these partnerships are particularly well positioned to support the shift.
Change for the Better?
Although it is impossible to know with certainty what the post-pandemic future holds, retail’s proven ability to pivot with the changing consumer health landscape is a likely indication of its continued staying power. CVS is bolstering its digital strategy for specialty pharmacy in order to keep vulnerable consumers connected to vital services and support during COVID-19. Walmart Health continues to expand its footprint of clinics and available health services as primary care facilities face possible closure. Even in the midst of the pandemic, Walmart, Target, Walgreens and CVS Health were quick to step up when called upon to help expand access to testing.
COVID-19 will likely forever change the way we navigate many aspects of our lives. Retail and healthcare will undoubtedly look a lot different in the future, but if the forces driving the retailization of healthcare — consumer experience, accessibility and, now, a safer means of connecting vulnerable individuals to the care they need — remain at the forefront, then perhaps some change is good.