THE OUTLOOK FOR HEALTH CARE IN 2023:

What you need to know about the forces reshaping our industry.

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ICYMI: What you need to know about the biggest disruptors in health care

By Katy AndersonRachel Woods

November 29, 2022

    We hear a lot about health care "disruptors" and all the ways they're trying to change the industry – whether that's acquiring physician practices, building innovative strategic partnerships, or introducing new technologies to make health care more affordable and accessible to consumers.  

    The Radio Advisory podcast team spoke with Advisory Board research experts—plus outside industry leaders— in a four-part series about the disruptors and business models poised to make the biggest impact on the industry. And as always, we shared our thoughts on how leaders like you should react. 

    In case you missed our series, we've outlined the key moments from each episode.

    Don't discount retailers

    Rae Woods talked with health care strategy and planning expert Colin Gelbaugh and Gina Lohr about out-of-industry players threatening traditional health care business. While the landscape of potential disruptors is diverse, Colin and Gina focused on the retailers who are advancing their primary care strategies by making huge investments in primary care, and they're showing no signs of stopping.

    So what?

    The list of potential disruptors is long. In fact, many organizations we once thought of as startups have proven themselves as formidable (even profitable) players in health care. Retailers—and retail pharmacy specifically—are a disruptor we at Advisory Board have studied for years. But the retail strategy of today is much more than immediate care.

    Retailers like CVS, Walgreens, and Amazon are taking aim directly at incumbent providers by offering more accessible, more affordable options for chronic care management, that meets the needs of patients and purchasers.  

    Now what?

    Retailers may have a head start on access and convenience, but incumbents have one home-field advantage: patient trust. That advantage is likely fleeting.

    As retail strategy circles around one traditionally held for health systems and medical groups, incumbents must deliver consumer-first primary care that delivers affordable complex care management at scale.

    Quote of the episode

    "Don't discount retail pharmacy. They bring both the strong consumer focus, which is much needed in health care. They also bring this incredible pharmacist skill set for optimizing patient medication needs, helping them have better outcomes in the end and that's going to prove powerful." - Advisory Board health care strategy and planning expert Gina Lohr.

    Why Walgreens wants to partner—not compete

    Walgreens Health Chief Clinical Officer Dr. Sashi Moodley came on Radio Advisory to talk about how the retailer is positioning itself to become a health care destination and why the company believes pharmacists are essential, trusted partners for reimagining primary care. Plus, Sashi shares what sets Walgreens apart from other disruptors in the primary care space.

    So what?

    Walgreens wants to rebuild local health care by delivering hyper-accessible and omnichannel patient experiences. Whether it's brick and mortar clinics through their partnership with VillageMD, virtual visits for chronic disease patients, remote patient monitoring, or Health Corners (a partnership with payers), Walgreens has its sights on being a key feature for a successful value-based care strategy.

    Importantly, Walgreens' partnership with VillageMD started before Amazon's purchase of OneMedical kicked the arms race for physicians into overdrive. This likely gives Walgreens an advantage over other retailers.

    Now what?

    Despite being a national chain Walgreens wants to build more personal, longitudinal relationships with patients. And they are willing to partner with the right stakeholder to make that vision a reality.

    At a minimum, organizations should aim to match this level of personalization across their touch points. And just like Walgreens, it is essential to know what your organization can do well, and where you need additional support.  

    Quote of the episode

    "I think the days of having a patient drive 20 miles to go to a certain health center to get their labs drawn as a thing of the past, and it should be. It's so disruptive to a patient's daily living to be able to fit in some of their health care needs and it shouldn't be that way. Where I think we can be really disruptive is in providing local health care at scale." – Walgreens Health Chief Clinical Officer Dr. Sashi Moodley

    Best Buy's big move into health care

    The electronics retailer has been moving slowly but surely into the health care industry by acquiring connected health companies focused on maintaining consumers' ability to live independently.

    Advisory Board industry expert Miriam Sznycer-Taub spoke with Rae about Best Buy's journey into health care and why they path they've chosen could be a smart move for the retailer. 

    So what?

    Best Buy's ambitions are different from those of other retailers because they aren't acquiring physicians or focused on direct care delivery. Instead, they are laser focused on helping seniors age in place and access care at home.

    Now what?

    While Best Buy's narrow focus may limit their ability to disrupt the end-to-end patient pathway, the company is poised to be a catalyst for home-based care—pushing the industry to act in similar ways.

    Leaders and strategists need to consider that health care is moving closer and closer to home and the potential services and partnerships they can build to meet patients where they are, both literally and figuratively.

    Quote of the episode

    "What's different about Best Buy is that they're not interested in building a brick and mortar clinic where people can come and receive care or interested in employing doctors. They've really made getting care into the home the sole part of their health care strategy." – Advisory Board industry expert Miriam Sznycer-Taub.

    How afraid of Amazon should you be?

    The disruptor positioned to make the biggest waves in health care is Amazon. Their recent acquisition of One Medical—a membership based primary care practice—is among the biggest investments in care delivery by a non-health care entity.

    It has set off an arms race for acquiring physicians, with organizations like CVS announcing their own massive deals. Advisory Board digital health experts John League Ty Aderhold discuss Amazon's foray into health care and what their investments—and rollbacks—could mean for the rest of the industry. 

    So what?

    Amazon is getting closer and closer to the consumer and to care delivery with every move that it makes. And unlike other disruptors, Amazon has the ability to experiment (and fail) at scale in a way that almost no other organization can, as evidenced by their disbanding of Amazon Care and joint venture Haven.

    Now what?

    Even as Amazon makes waves in the health care industry, the giant isn't guaranteed success. Their next step is a step we'd recommend to any incumbent: focus on integrating products and services into a set of accessible, consumer-focused, and more affordable solutions.

    Quote of the episode

    "Amazon has an opportunity here because health care does not work for a lot of people. Getting access, having convenience, being able to, in many ways, sort of set your own terms of engagement… Amazon is here because they see an opportunity to do something better. They are not beholden to all of the legacy incentives that we have." – Advisory Board digital health expert John League. 

    Listen to Radio Advisory

    Radio Advisory, a podcast for busy health care leaders.

    If you’re traveling this season let Radio Advisory be your road trip companion.

    Listen to the disruptor series along with other episodes focused on key topics like strategy, finance, and health equity by downloading Radio Advisory wherever you get your podcasts.

    Listen now

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