- New business models are disrupting medical care, putting pressure on companies to rethink their strategies or risk being left behind, according to a new PwC Health Research Institute report.
- HRI points to four new archetypes of deals that are transforming healthcare economics and how patient get care: vertical integrators, employer activists, technology invaders and health retailers.
- Retail clinics have a particular strength, with their convenience and knowledge of consumer behavior. With features like online scheduling and bill paying and digital product support, they can draw patients away from traditional providers provided the price is right. About a fifth of consumers surveyed had visited a retail clinic in the past several years, according to the report.
The research comes as the CVS-Aetna vertical integration deal is poised to close by Thanksgiving. The two companies have trumpeted the merger as a cost saver by using CVS pharmacies and Minute Clinics to better serve Aetna's members. According to HRI, 19% of consumers have little or no idea what a prescription will cost when they pick it up at the pharmacy, and only about a fourth believe their insurance company is doing enough to keep drugs affordable.
Other vertical integrators include UnitedHealth Group's Optum and DaVita Medical Group and Cigna's $67 billion bid for Express Scripts.
Cost is a big factor driving people to health retailers, along with convenient hours and shorter wait times. More than half of respondents said they would go to a clinic in a retail store or pharmacy to have stitches or staples removed or a wound treated if doing so would save them money.
As more healthcare services move to the retail space, payment models such as reward points or subscription services will follow. Companies can attract consumers to clinics and keep them coming back by offering incentives or subscription-type services. Among consumers who were surveyed, 85% said they would be very or somewhat likely to use a service that helped them to finance large medical expenses.
Amazon, J.P. Morgan Chase and Berkshire Hathaway exemplify the employer activist model, with their joint company to manage the healthcare needs of a combined 1.2 million U.S. employees. But while these companies have the technology and capital to redesign how care is purchased and delivered, price negotiations could be a challenge as employees are spread throughout the country, the report says.
Tech giants — including Google, Apple, Amazon, Uber and Lyft — are also vying for a piece of the healthcare pie. According to the report, 61% of consumers are open to using a digital tool that brings all their health information together in one place, and 47% are comfortable with a virtual visit offered by a telehealth vendor.
To succeed, tech companies should consider partnering with established healthcare companies that know the industry and what patients need, the report adds.