Why Hospitals Fail at Retail 

Jim Molpus, September 29, 2017

Retailers didn't change their business because they didn't want to. Are hospitals and health systems, when presented with the same shift of consumer preference, poised to do any better?

Jim Molpus
Jim Molpus

My dad is an architect, and one who was never afraid to have a hammer in his hand on the weekend. And that hammer was always a Craftsman tool, bought from the Sears location in Buckhead in Atlanta.

Every weekend without fail, he'd seem to find some reason he had to be there, with me in tow.

I saw recently where Sears Holdings, the ghost of what used to be the greatest retail company in America, sold the Craftsman brand just to generate some cash. Other brick-and-mortar retailers are filing for bankruptcy in record numbers. "Dead malls" are replacing what used to be the hubs of social life for suburban teens. 

When was the moment their doom was sealed?

It's easy to say that many traditional American retailers didn't see the shift of consumer patterns to online early enough. Oh, they knew. They can read a Wall Street Journal, too.

The cold, hard fact is that they didn't change their business because they didn't want to. They didn't want to because they were not willing to risk quarters or years of operating revenue and stock performance to transform the underlying business.  

Are hospitals and health systems, when presented with the same shift of consumer preference, poised to do any better?

In this month's issue, senior editor Debra Shute poses the question: "What's next for retail healthcare?" To be sure, many hospitals, health systems, and medical groups are making more-than-token investments in retail healthcare, either through direct competition with corporate retail and urgent clinics, or taking a market position in the growing telehealth market. 

On the high road, it meets a consumer need, provides more convenience, and brings the price point down for some basic health services. All good. But as an industry overall, it's hard to ignore the sense that American hospitals and medical groups have not been leading the retail charge based on customer need, but have been dragged into it by disruptors who are posing a consumer threat. It's more protective than innovative at this point. 

True, healthcare is the one service no one really wants. It's also the one that everyone will inevitably need. And when they do, consumers will have choices. Healthcare leaders must rethink how they listen to consumers and their dollars. And if what they hear means losing staff, current revenue streams, and some familiar ways of doing business, they'll have to weigh that cost against the risk of becoming obsolete. 

Jim Molpus 

Interim Editor in Chief 
Leadership Programs Director

jmolpus@healthleadersmedia.com

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