A view from the Center

Deloitte's Life Sciences & Health Care Blog

Beyond retail clinics: Retailers can provide value to health systems

Over the last few years, health care has been in a long conversation about how the industry could take a page from retail to develop customer-centric strategies. The conversation has mainly been around potential disruption from retail clinics, which are certainly transforming patient care, but that focus is a bit myopic. Sure, retail clinics are growing, are popular among consumers, and they can open up new doors for health care providers to reach consumers in a more convenient and cost-efficient way. Indeed, our recently published paper suggests that retailers and health systems can partner around chronic care to offer greater access to care and potentially lower costs. But, in addition to disruption from retail clinics, I see several other potential opportunities for health care organizations to gain value from retailers.

Retail data and consumer purchasing expertise. Customer behavior is a subject that retailers know well but the health care industry is still playing catch up when it comes to this topic. Retailers could provide a treasure trove of data to understand purchasing patterns and consumer characteristics. Retail clinics are often owned and operated by retail pharmacies or grocers—companies that have a lot of consumer data, and are known for managing it well. To help retail clinics, retailers could offer information on purchasing patterns that could help identify higher-risk individuals.

Retailers have precise insights into the patterns of customer behavior: who shops for what, when, and what channels they prefer. By design, retailers are effective at predicting busiest shopping times, hot products that are in demand, placement of those products (at point of sale, online, integrated with a targeted display), and who their target customers are.

Some can even predict what a customer will want to buy, when they’ll want to buy it, and what enticements—like a point-of-sale coupon—may encourage them to fill their shopping basket.

Nearly all of the health care professionals we interviewed for our new Deloitte Center for Health Solutions study were intrigued by the possibility of using this type of data. Some said that they could even envision health care organizations formalizing partnerships with retailers in the future.

While consumer shopping data is potentially a great source of epidemiological information, data privacy rules and Health Insurance Portability and Accountability Act (HIPAA) could present obstacles. In theory, the greatest value would be the combination of data from providers and plans have with that of retailers’. However, due to HIPAA and other privacy laws, data would likely have to be de-identified, which would potentially limit its value.

As long as retailers and health care organizations are mindful of patient privacy, however, and follow practices of patient data governance and de-identification, there could be a new world of outreach waiting to be discovered. Health care organizations could find new ways to encourage patients and improve health outcomes by understanding their behavior. It could be something as simple as leveraging point-of-sale coupons for discounted cholesterol screenings or it may be more complex, like enhancing health plans’ or providers’ predictive models to identify at-risk patients. In a recent conversation with a CMO at a health plan, we heard: “Retailers know that this person buys full sugar soda and Twinkies, and that they also have a 35-pound poodle. This kind of epidemiological data would be a gold mine for population health. But we haven’t found a way to use it.”

Brand and marketing partners. Other opportunities might include supporting joint marketing ventures intended to connect provider organizations and health plans to new customers. Despite efforts to increase coverage in the US, 11 percent remain uninsured – many of whom are healthier on average than those who have enrolled in exchange plans – many who come into retail settings every week. Retailers could refer these customers to a partner health plan for coverage.

The retail industry is known for its ability to curate and leverage the value of a brand, and may be a creative partner for effective marketing and branding strategies. Partnering with a retailer can mean more than just piggybacking on their space, it can also mean taking the time to learn the trade of catering to customers rather than patients.

It’s fairly common for health plans to set up booths during health insurance open enrollment. Payers use in-store kiosks to enroll walk-in customers. Future partnerships between plans and retail stores could include cobranding nutrition, wellness services, and health coverage and services.

Partners on wellness and offering healthy choices. Many opportunities likely exist to encourage or shape consumer behavior through services or products sales (or the lack thereof), or through public health initiatives. Of course many retailers already offer important preventive services like flu shots – but they also sell other products (vitamins, water, over-the counter-products and therapies) that could be packaged around a theme of health and wellness.

One idea we heard in our interviews was that retailers could award store loyalty points to customers with healthy behaviors, such as medication adherence or choosing healthy products.

Would health plans and other purchasers be willing to pay for these offerings (or non-offerings)? The answer is uncertain, but there is definitely value to be realized by unlocking the potential of retail.


Author bio

David is a principal in Deloitte Consulting LLP’s Life Sciences and Health Care practice. He leads Deloitte’s Customer Transformation initiatives for the health care provider sector, and his work has focused on enhancing core operations in the revenue cycle, driving performance improvement through operating model transformation and growing the business through mergers & acquisitions all with an eye towards creating a more patient-centric, consumer-oriented delivery system.