The trend of major insurers opening up brick-and-mortar retail stores is on a continued upswing as the evolving healthcare landscape continues to drive consumer demand, experts say.
"I think it's still going up," says Dustin Eggers, a principal at Stonegate Advisors, consultants for healthcare strategy that have advised insurers on the subject.
Eggers says he's seen both sides of the argument and had been on other side—until increased consumerism driven by the Affordable Care Act changed healthcare behavior.
"The ACA has been a catalyst for re-mapping the health consumer's journey," Eggers said. He notes that increased consumerism is causing people to be more engaged and accountable for their health, more involved in their healthcare decisions, and more impacted by price variances, than ever before.
"This shift toward a consumer-centric model is going to continue to increase demand in brick-and-mortar retail stores," Eggers said.
History (and future) of retail insurance
Attempts at retail stores began in early to mid 2000s, Eggers says, with some successes and some failures. He believes consumers weren't ready for them at that time, but were warming up to them as a resurgence began around 2011.
"There were lots of stores open by 2012, but we weren't talking about them a whole lot because [insuerers were] afraid to put too much emphasis on them in case they started failing and detracting from the brand," Eggers says.
He expects to see the trend continuing upward, even if the ACA does substantially evolve or get scaled back by the Republican Congress.
"The catalyst for change has already happened," he says. "There are lots of little pieces that can't be easily pulled back, like Meaningful Use. That alone, though it's one little cog, does cause an influx in consumerism."
Eggers suggests the system in place through the early 2000s was not going to be sustainable, and that now, there's no changing the momentum toward consumerism and consumer accountability.
"Having a brick-and-mortar store with a payer brand on it for sales, service and even delivery of care is something we're going to continue to see," Eggers said.
Eggers notes that kiosks are also proving a cost-effective alternative for providing sales and service. And as far as which insurers currently stand out in their overall retail approach, Eggers named UnitedHealthcare, the Blues (particularly BCBS of Florida) and Highmark.
What's the return on investment?
Eggers says that retail stores are helping insurers serve three main priorities:
- They serve as a sales channel for the growing numbers of individual purchasers.
- They serve as a service location. "This is a great place to be able to service your customers in a meaningful way that engages them and creates accountability for them, and makes them happy—creating stickiness, so they stay with the insurer," Eggers says.
- They can also be a location for delivery of care. Eggers says that with the trend toward pushing more healthcare delivery down to second-tier providers, stores provide a very cost effective alternative to offices within hospitals, which have much higher fixed costs.
How to determine ROI can be difficult to answer and depends on how companies want to look at it.
"Could any of them actually put a hard financial ROI on them? We'll see," Eggers said.
He suggests the real ROI for now is in the impact on brand image and the way consumers engage with payers. "I think one could argue we're five years from seeing a real ROI on these stores, and it's an important investment to make in your brand," he says.
BlueCross BlueShield of Tennessee recently stated that their Nashville retail location has "definitely proved its business case." Carla Raynor, the company's vice president of strategic marketing, told the Nashville Business Journal last week that the store has met its goal for signups and that about 60% of their visitors are nonmembers, and therefore prospective customers.
"It really has helped us be even more consumer-friendly and more competitive in understanding market dynamics," Raynor told the Journal. At the same time, however, she said that it's difficult to draw conclusions about the store's value and noted that it's part of a three-year pilot.