Over the past few days, I’ve had interesting meetings with the leadership teams of behavioral health provider organizations primarily serving consumers who enrolled in Medicaid. When the discussion turned to competition and the need for diversification, what became clear is that several of these organizations have yet to morph their service delivery model into one that consumers would actually find “easy to use.” In other words, their organizations haven’t “gone retail.”
Now, you could argue that an investment in a more consumer-centric “retail” experience is one that these organizations don’t need to make. Most of their consumers don’t have a choice in where and from whom to receive treatment. The managers said they have plenty of Medicaid consumers and financially they are “doing fine.” But, I would argue that not having a service delivery system that is acceptable to (and even preferred by) the “majority of Americans” (this is my very loose term for people with all types of insurance and from all demographic groups) increasingly puts provider organizations at a competitive disadvantage.
Why? A good consumer experience promotes client retention and decreases “no shows.” Even Medicaid consumers have some choice. And as Medicaid goes to more managed care, managed care plans will select provider organizations, in part, based on consumer experience and ratings. In addition, most health plans serve multiple consumer groups (commercial, Medicaid, Medicare, TriCare) these days. With more health plan risk-sharing and the “narrow network” phenomenon on the increase, those health plans will be looking for a few “full service” (in terms of consumer demographics) provider organizations for their networks. Last, but not least, retail clinic organizations are moving slowly but surely into the chronic care management space – and offering a wider array of services via telehealth.
We’ve covered the managed care enrollment statistics before with 99% of employer sponsored insurance, 27% of Medicare, and 66% of Medicaid covered in some type of managed care plan (see Planning For The New Managed Care and 66% Of All Medicaid Beneficiaries Enrolled In Managed Care Plans In 2014). And we’ve covered the proliferation of provider rating systems (see Succeeding In The Online Ratings Game – First, Know The Score and Succeeding In The Online Ratings Game – Second, You Need A Plan); the increasing use of pay-for-performance (see Medicare Bets Big On Pay-For-Value and Getting Your Team Ready For Performance Management); and the narrow network phenomenon (see Narrow Networks Happening By Design & By Default and Narrow Networks & Children’s Services: Another Perspective). But in case you missed it, the new statistics about retail clinic utilization (see What Physicians Should Know: 7 Retail Clinic Statistics) are eye catching:
- It’s projected that 2,800 retail clinics will be in operation by the end of 2015 (see Healthcare Reform and Retail Medical Clinics: From Foe to Friend).
- Between 2007 and 2014, the number of MinuteClinics located inside CVS pharmacies rose from 160 to 800 (see Health Care in the Express Lane: Retail Clinics Go Mainstream and MinuteClinic History).
- The percentage of consumers who made a return visit to a Walgreens retail clinic rose from 15% in 2007 to 50% in 2014 (see More Patients Turning to Retail Clinics for Chronic Care and Preventive Services, New Walgreens Study Shows).
- 44% of all retail clinic visits occur on weekends or week nights, when traditional provider organization offices are closed (see New Study Finds Fourfold Increase To Retail Clinics Between 2007 And 2009).
- The number of consumers who visited a retail clinic in the prior 12 months increased from 9.7% in 2007, to 35% in 2013 (see $2.8 Trillion U.S. Healthcare Market Threatened By Disruptive New Entrants Like Those That Reshaped Retail, Banking and Travel, According To PwC’s Health Research Institute) – or approximately 10.5 million a year (see Retail Clinics Hit 10 Million Annual Visits But Just 2% Of Primary Care Market).
And if these statistics aren’t enough to catch your attention, there is the payer issue. In late 2013, the Modern Medicine Network reported that 56% of employers that offer health benefits, cover care received at a retail clinic (see Payers Warm Up To Retail Clinics).
So what do retail clinics have to offer that is so appealing to consumers? It’s all about the experience. And in an upcoming briefing, we’ll continue with this discussion by posing the question – “How do I know if my organization provides a good (enough) consumer experience to be competitive?” In the meantime, you might want to check out these resources in the OPEN MINDS Industry Library – How Far Are You Willing To Go To Improve Consumer Satisfaction?, How Payment Reform & Consumerism Are Reshaping Chronic Care, and Will Consumers Add Health Services To Their Holiday Shopping List?.
Or join my colleague Timothy Snyder on June 16 at the 2015 OPEN MINDS Strategy & Innovation Institute, where he will join Chriss Flynn, Marketing Director, Mind Springs Health for the session, Changing Best Practices In Positioning & Branding: Keys To Competing For Consumers & Referrals.