How Can Providers Get Into Retail Medicine Quickly?

Some things about the healthcare provider business model continue to stupefy me, things I cannot wrap my brain around.

One of those things is their strategy.  When I think of business strategies I think of the word plan—what are we going to do, how are we going to do it, who is going to do it?  Most strategic plans lack one thing, a plan.

Healthcare is not an industry where nothing is going on.  Until recently, there were only three major forces to disrupt the provider business model; the government, the payers, and the pharmaceutical firms.  Providers would write their plans on an Etch-A-Sketch because nobody knew exactly what those forces would do to them.  Strategies, for the most part, were designed to react to disruptions brought about by organizations much larger than they were.  Those three forces made the rules, controlled the purse strings, and controlled the medications. The forces were strong enough year in and year out to cause provider business strategies to be reactive.

During the last twenty years providers disrupted their own business strategy, and they did so to their detriment.  Providers opened the door to specialty competitors and clinics popped up everywhere, siphoning away patients and revenues.  Patients and revenues that providers have yet to recapture.

Over the last decade provider strategies were neither innovative nor disruptive.  Planning sessions focused on what would CMS do; what would payers do to hurt us; what are the pharmaceutical firms up to?  Should we be hiring, or should we focus on cutting costs?

Then came Obama care; the Affordable Care Act.  And provider penalties.  And a few hundred million dollars for an EMR—brand new hospital wings could have been built for what providers spent on 1s and 0s.  The payers bemoaned the impact of the ACA on their business like Brer Rabbit saying, “Please don’t throw me in the briar patch.”  Provider strategies focused on maximizing the Meaningful Use rebate—not much of strategy, but providers weren’t calling the shots, they were reacting.  Some providers bought primary care practices while others got rid of them.

And while providers were focused on the shell game of payers, pharmaceutical firms, and the government their entire business model changed.

And it changed without them knowing about it or reacting to it. It almost seemed like the provider executives were not copied on the email.

And what changed; what was overlooked?  By the end of 2014 there were 800 Minute Clinics. By 2017 it is forecasted that there will be 2,800 walk-in medical clinics.  Walk-in clinic revenues in 2013 were estimated to have exceeded $800 million.  Then there are the thousands of Quest Diagnostic clinics.  That is why the waiting areas in the hospital labs are so small; they no longer need a lot of seats.  More revenues gone, repeatable revenues.

So, let’s backtrack to the idea of the provider business strategy, the plan.  The plan to do what?  Retail healthcare is not coming—that is not good news.  It is here, it has been here, and the growth and patient loyalty of these services are phenomenal.  As is the revenue loss for providers.

So, does consumerism fit in the provider business strategy?  It should be the provider business strategy. Is it part of the provider business strategy?  Most likely it is not.  That begs the question “Why not?”

Should large providers open dozens of store-fronts?

I look at the situation this way. If you visit Quest or the Minute Clinic you see chairs.  And in those chairs you see people.  You can see chairs with people in them at the hospital.  There is one very big difference if you happen to be a provider executive.  The people in the chairs at the Minute Clinic and at Quest are consumers.  They are people with no appointment.  Consumers who are in the process of purchasing healthcare, who are in the process of purchasing it the easy way, and who are in the process of building a loyalty with their new healthcare providers.  These people will continue to purchase additional services until they are told they need a service beyond the capability of the clinics.

The importance of the chairs is what they represent.  Hospital chairs represent patients. Minute Clinic chairs represent a way to convert potential patients—consumers—into new patients.  Walked in a consumer walked out a patient. A very repeatable process, and one their consumers repeat again and again.

Hospitals do not have a way to easily attract and capture new patients—consumers.  Neither do their clinics—no walk-ins allowed.  Hospitals only have a way to fill a time slot weeks or months away with a scheduled patient.

So, until providers get into retail medicine the way the average consumer understands retail medicine, what can they do strategically to disrupt their business model in a way that is beneficial to them?

  • Phase 1—Hire floaters. Hire someone who could see a patient who wanted to be seen.  Wow, that was easy.  You may think that would be expensive because doctors are expensive.  Doctors who do not see patients eight hours a day are expensive.  However, if the value of an average patient is worth $200,000, how many patients a week does the floater need to see to make it cost effective?
  • Phase 2—UberMD. We both know scheduling, especially scheduling new patients, can be a disaster (for the patient).  They want to be seen now, but you do not have an opening in the next six weeks.  From the patient’s perspective, that equates to zero access.  I called the children’s hospital of a large New England health system asking to see an orthopedic surgeon. The first available appointment was in six weeks.  That same health system had more than a hundred orthopedists on staff, but since those doctors were not at children’s my request hit a wall.

What if this type of solution was available?  Take the Uber concept, multiply it by negative one, and out comes UberMD. Instead of alerting all of the Uber drivers in my area that I need a ride and sending one to me, UberMD alerts all of the orthopedists in the health system and lets them know I need an appointment.  The health system’s doctors reply to my service request and I have an appointment much sooner than six weeks.

Patient capture. Patient satisfaction.  On demand access.

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