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Retail Responding to Market Demand for Primary Care

John Commins, for HealthLeaders Media, February 12, 2014

3. Retail Understands Consumers
Third, retail businesses understand the potential for creating vibrant walk-in clinics and other on-site provider services that will mesh with the demands of savvy healthcare consumers for price transparency and convenience. When CVS Caremark announced last week that it would no longer sell tobacco products, the retail chain wasn't just looking for good PR.

CEO Larry Merlo made that apparent when he said in a prepared statement: "Put simply, the sale of tobacco products is inconsistent with our purpose. As the delivery of healthcare evolves with an emphasis on better health outcomes, reducing chronic disease, and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners."

CVS and other retail giants such as Rite Aid, Walgreens, Walmart, and regional supermarket chains across the country have for years been experimenting with various on-site outpatient services. The move by CVS suggests that the trend will intensify. The people who run these businesses are very smart. When it comes to succeeding in highly competitive markets with tight margins, retailers are light years ahead of just about everyone in traditional healthcare.

Much more so than traditional medicine, retailers understand what customers can afford. People making $25,000 a year with a $4,000 healthcare deductible are essentially uninsured except for catastrophic coverage. They are going to be paying for most, if not all, of their healthcare services. Retailers have figured this out and they'll be cost competitive on the primary care services most in demand. In traditional provider settings many clinicians often don't know the price of the drugs or procedures they're recommending.

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