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Analysis

Pharmacies See Continued Growth as Primary Care Hubs

By John Commins  
   August 06, 2020

Drug store chains are reaping the fruits of a strategy they've laid out over the past several years "to become the center of gravity for consumer healthcare."

Healthcare consumers are embracing primary care in retail pharmacies with the rising use of consultation kiosks, exam rooms, and walk-in clinics, according to the J.D. Power 2020 U.S. Pharmacy Study.

James Beem, managing director of healthcare intelligence at J.D. Power, said the major drug store chains are reaping the fruits of a strategy they've laid out over the past several years "to become the center of gravity for consumer healthcare."

"When you look at the major pharmacy business trends of the past couple of years—CVS acquiring Aetna, Walgreens partnering with Humana and Walmart moving into health insurance—it's clear that pharmacy operators are positioning themselves to become hubs of consumer healthcare, edging into the space once reserved for primary care physicians’ offices," Beem said.

What has not been clear until now, Beem says, is how consumers would react to the shift.

"Simply put, they're embracing it, and it's driving higher overall satisfaction and increased spending as they use more health and wellness-oriented services," he said.

According to the J.D. Power study:

  • Use of health and wellness services is growing and driving higher customer satisfaction. Nearly half (48%) of retail pharmacy customers have used at least one health and wellness service provided by their pharmacy this year, up 5 percentage points from 2019.

    Overall customer satisfaction is 26 points higher (on a 1,000-point scale) among customers who use health and wellness services compared with those who haven't.
     
  • Penetration into primary care drives satisfaction and spending: Customers who use at least one health and wellness service provided by their pharmacy spend an average of $11 more per customer than those who do not use these services ($35 vs. $24, respectively).

    When customers use two or more health and wellness-oriented services, that average spend climbs to $58. Among customers who use two or more health and wellness services, overall satisfaction jumps to 907 vs. 861 for those who don’t use any service.
     
  • Digital ordering drives high levels of satisfaction, but use remains low: Only 9% of brick-and-mortar pharmacy customers order their prescriptions via digital channels. Despite the low utilization rate, satisfaction among those customers who order digitally through a brick-and-mortar pharmacy is 859, which is 5 points higher than among those who only visit the store in person.

    Mail-order pharmacy customers are far more frequent users of digital ordering, with 32% ordering prescriptions via digital channels. These mail-order digital customers have an overall satisfaction score of 867.
     
  • Physician recommendations are key to health services use: Physician-recommended, pharmacy-delivered health and wellness services saw an 80% use rate and recommendations from friends and family have a 75% use rate.

    Only 8% of customers say they've a recommendation from their doctor and 9% have received a recommendation from friends and family. The most common means of hearing about these services is in-store advertising, which drives a 45% utilization rate.

Study Rankings

The study also ranked the top performers among consumers for brick-and-mortar and mail order pharmacy services.

And the winners are:

  • Good Neighbor Pharmacy ranks highest among brick-and-mortar chain drug store pharmacies for a fourth straight year, with a score of 915. Health Mart (905) ranks second and Rite Aid Pharmacy ranks third (861).
     
  • Sam's Club ranks highest among brick-and-mortar mass merchandiser pharmacies for a fifth consecutive year, with a score of 885. Costco and CVS/pharmacy inside Target (870 each) rank second in a tie.
     
  • Wegmans ranks highest among brick-and-mortar supermarket pharmacies for a third consecutive year, with a score of 904. Publix (889) ranks second and Winn-Dixie ranks third (883).
     
  • Humana Pharmacy ranks highest in the mail order segment for a third consecutive year, with a score of 904. OptumRx (886) ranks second and Kaiser Permanente Pharmacy (883) ranks third.

J.D. Power's 12th U.S. Pharmacy Study is based on responses from 13,378 pharmacy customers who filled a prescription during the three months prior to the survey period of September 2019-May 2020.

“When you look at the major pharmacy business trends of the past couple of years—CVS acquiring Aetna, Walgreens partnering with Humana and Walmart moving into health insurance—it's clear that pharmacy operators are positioning themselves to become hubs of consumer healthcare, edging into the space once reserved for primary care physicians’ offices.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Use of health and wellness services is growing and driving higher customer satisfaction.

Overall customer satisfaction is 26 points higher (on a 1,000-point scale) among customers who use health and wellness services compared with those who haven't.

Customers who use at least one health and wellness service provided by their pharmacy spend an average of $11 more per customer than those who do not.

When customers use two or more health and wellness-oriented services, that average spend climbs to $58.

Among customers who use two or more health and wellness services, overall satisfaction jumps to 907 vs. 861 for those who don’t use any service.

Only 9% of brick-and-mortar pharmacy customers order their prescriptions via digital channels.


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