The Intersection of Retail and Healthcare

by Michael Howe


Whatever comes of the reform efforts in Washington, D.C., the focus of the U.S. health care system has already shifted toward a patient-controlled (not just patient-centered) delivery system. WebMD, DestinationRx, and other online resources are creating informed, intelligent, and empowered consumers who are focused on prevention more so than treatment, and who want their providers' practices to reflect that shift.

Of course, people of different generations have vastly different needs, expectations, preferences, and influencers. Members of the Greatest Generation for instance, are focused on compliance, and they expect their health care system to be directive — "What do I need to do, which meds should I take, to get well?" By contrast, members of Generation X want education and would rather take health matters into their own hands — "Give me an otoscope, show me how to use it, and I'll monitor my child's ear infection."

It's not news that consumers are assuming greater control over their own health. But what may be novel to health care companies is their need to take the service principles from consumer-focused organizations — managing customers' expectations and experiences, for instance, and conducting consumer research — and apply them to their operations.

Some consumer companies such as CVS, Procter & Gamble, Cerner, Wal-Mart, and Walgreens are already influencing the way people make their health care decisions — that is, based on the quality of the experience and the providers' efforts to engage them meaningfully. P&G, for example, will begin providing health care services for the first time when it assumes ownership of MDVIP, a concierge network of 350 physicians. Meanwhile, when IT provider Cerner acquires IMC HealthCare, expected mid-year, it will become the operator of 23 workplace clinics for 15 different corporations.

Retail clinics like CVS MinuteClinic, the company I led from 2005 to 2008, are taking over many of the traditional tasks of the private physician's practice, and new technologies (like glucose monitors and other wireless monitors) are facilitating patient mobility and comfort, enabling continuity of care, but requiring far less direct interaction with physicians.

With the complexity of the U.S. health care system, even the most seasoned consumer-focused executives can have a hard time seeing these sorts of opportunities. When I first interviewed to lead CVS MinuteClinic in 2005, I was coming directly from a career in the consumer space with assignments at P&G and PepsiCo. And so while leading MinuteClinic, I applied the critical lessons I learned from my experiences in another service-oriented organization — Arby's. As CEO there, I led a brand turnaround where we focused on improving the quality of the food and customers' in-store experiences. I applied these same principles of "continuous improvement" and "customer engagement" at MinuteClinic, which in three years grew from 19 clinics in two states to 530 clinics in 27 states; and 81 employees to nearly 3,000. We used consumer research to determine people's expectations, and we built our unique delivery platform accordingly.

It all sounds logical, right? Megatrends demand this sort of change. But it's not necessarily an easy leap for health care providers (doctors, employers, and payers) and regulators to make. They don't quite get that patients are moving toward providers that can offer them higher quality of care, better customer service, and innovative ways to receive the health services they need.

Physicians have data in hand suggesting that the quality of their bedside manner is directly correlated to patient outcomes, but still they can't always wrap their heads around the importance of service principles. Payers don't grasp it either. One BC/BS group flat out refused to do business with MinuteClinic until we took unorthodox actions — we provided health care services to BC/BS subscribers at their normal copay levels, and we collected and sent 3,200 postcards from those consumers, proving the power and benefits of this sort of consumer-focused model. Within two weeks of receiving the postcard delivery, BC/BS asked us to become a network provider accepting the mandate of their membership.

Established health care leaders must look outside the industry to understand how to adapt to this new reality. Physicians will no longer be able to act as simple compliance officers — diagnosing diseases, assigning treatments and making sure patients stick to their regimens. Instead, they must become educators, coaches and advisers who cater their services to the unique circumstances and demands of individual patients.

Regulatory reform is also vital to rid the system of reimbursement incentives that prevent providers from using their teams most efficiently. To gain the greatest benefit from health care reform, leaders must eliminate other practices that thwart the delivery of "anytime, anywhere" service, such as the insurance limitations imposed by the individual states, state medical licensure practices, and HIPAA sensitivity around information sharing.

As more and more providers adapt their methods of delivering care to better reflect consumer values and expectations, it will result in the effective, convenient and affordable health care system that we all envision and hope will one day be reality.