Consumers and COVD just redefined the Retail Care model forever

1. The Healthcare Delivery Model Changed & Traditional
Healthcare Didn’t Notice
Confidential & Proprietary
June 2020

2. The 2 Consumer Axioms of Retail Care
Consumers are defining the Retail Care market.
1. 84% of consumers say that the consumer experience is just as important as
the service they buy
2. The last, best consumer experience someone has anywhere is the minimum
experience they expect with Retail Care

3. Information Driven
The patient-consumer will opt towards competition if touch points are not valuable
from an information and educational standpoint
Omni-Channel Access
The patient-consumer expects to be able to interact with their service providers
through the entire continuum of communication
Personalized
The patient-consumer now expects the same level of personalization that they
receive in all other consumer industries
OTHER INDUSTRIES HAVE RE-DEFINED
CONSUMER EXPECTATIONS FOR
HEALTHCARE

4. Consumers, Like Water, Choose The Path of Least
Resistance
Consumers have been quick to modify their purchasing behaviors and to choose
purchasing models driven by technology.
● Omni-channel versus brick-and-mortar
● Online banking
● Dining & grocery delivery
● Netflix versus Blockbuster
● Amazon versus Sears—stores are closed yet people continued to shop
● Telehealth and Urgent Care visits surpassed primary care visits

5. Patients Are Also Choosing The Path of Least Resistance
Patients have dramatically changed how they purchase healthcare.
● Bon Secours Health had more telehealth visits in a single week than they had
in all of 2019
● Medici, a telehealth platform, has had a 1,300 percent increase in patient
visits during COVID
● 78% percent of patients said they planned to skip at least one primary care
visit this year
● 30% of patients predicted their healthcare ”visits” would increase because of
easy of access

6. The Old Healthcare Delivery Model Was A Closed Loop
The old healthcare model was inconvenient and expensive.
● Consumers who wanted to purchase healthcare had limited options
● Those options were defined by healthcare providers
● There was no choice
● Consumers who wanted immediate care, even for simple things, went to ED
● Healthcare’s purchase path went from PCP to Specialists to a Health System

7. The Old Healthcare Delivery Model Was A Closed Loop
The old healthcare model’s supply chain was inconvenient and expensive.
● Consumers viewed ED as Retail Care
● Some PCPs added PAs to meet the demand for Retail Care
● 90% of the healthcare chain started with the PCP
● Some consumers went from their PCP to a specialist
● Other consumers went to the hospital for tests or treatment

8. How Did Consumers View The PCP Model?
The PCP model was the only model.
● Only open 8-5 Monday – Friday
● There were only a limited number of available appointments each day
● If there were no appointments and people did not want to wait, they went to
ED
● Consumers viewed their PCPs as only offering 2 services—diagnosis and
prescriptions

9. The PCP Model Was Not Convenient
Upon leaving their PCP, consumers knew that treatment often required them to
visit another healthcare service
● Offered ‘triage’ not offer treatment
● “You are fine”; nothing further required
● “You need to go get further tests”, like an X-ray
● “You need to see a specialist”
● “You need to be admitted”
● “You need to go get a prescription filled”

10. The ED Was Healthcare’s Only Retail Care Option
Consumers used the ED as their 1-step retail care solution
● ED provided same-day service
● ED was available 24 x 7
● ED could diagnose, provide tests, provide medications, & provide treatment
● Health systems viewed ED as emergency care
● Consumers viewed ED as Retail Care and went to ED for non-emergencies
● Although it was more expensive, care was ‘immediate’ and it covered
everything from diagnosing to treatment in one location

11. The Pre-COVID Healthcare Delivery Model—Retail Care
The pre-COVID healthcare model included a Retail Care option.
● CVS Minute Clinics provided ease of access
● Health plans supported Retail Care
● Consumers were no longer forced to choose between going to their PCP and
ED
● Consumers were no longer forced to buy healthcare from 8-5 M-F
● Consumers could schedule appointments online or receive care on a first-
come first-served basis

12. The Pre-COVID Healthcare Delivery Model
The pre-COVID healthcare model brought about 3 changes all of which were
covered by health plans.
● Retail Care services were quickly adopted (Minute Clinic)
● The number of Urgent Care clinics grew and much of their growth was from
Retail Care referrals
● Telehealth began to be accepted by consumers
Each of these changes stole consumers from the traditional model.

13. The Pre-COVID Healthcare Delivery Model—Retail Care
The impact of Minute Clinics let consumers choose their care model. Minute
Clinic:
● Treated 37 million consumers in 2017
● Cost 40% less than urgent care
● Provided most of the same services as a PCP (illnesses, injuries, screenings,
vaccinations, physicals, women’s services, prescriptions)
● Provides walk-in healthcare and scheduled appointments
● Has an onsite pharmacy
● People purchased more healthcare because it was convenient

14. CVS Gets More Aggressive
In 2019 CVS greatly enhanced its retail care model and its competitive
advantage.
● Acquired Aetna which will provide it greater access to patient health data
● Announced the addition of 1,500 new Health Hubs that will offer a greater
range of services like chronic illnesses and tests and it will have greater
capacity
● Added a Telehealth option

15. The Bad News For Traditional Healthcare
Healthcare is competing with firms like CVS though CVS does not view
healthcare as its competitor.
● 85% of consumers live within 4 miles of a CVS store
● 45% of consumers said they will consider getting primary care at a CVS clinic
● A person’s PCP has one location with a limited number of appointments—
CVS has multiple locations in most cities
● CVS sees its competitors are Walmart and Amazon

16. Retail & Urgent Care Reinvented Healthcare Purchasing
Retail & Urgent Care gave consumers choice and ease of access
● Consumers had 1-stop shopping for diagnosing, treatment, and prescriptions
● Care was available 12 x 7
● Instead of 1 PCP with limited available appointments, care now had several
convenient alternatives
● The advent of telehealth

17. Healthcare Will Never Be The Same
Healthcare was already changing. In the last decade we saw the impact of:
● Walk-in care proved to be a viable option
● Millions of patients bought Retail Care via platforms like CVS Minute Clinics
● The growth of convenient urgent care clinics
● The advent of telehealth
● Retail Care made it possible for consumers to eliminate their PCPs from the
healthcare purchasing supply chain
● Consumers saw that the primary value of their PCP was to refer them to a
specialist

18. Purchasing Factors Of Retail Care
If consumers rated all factors to be equally important, retail care consumption is
more easily explained.
● All factors are not rated equal by consumers
● Ease of access outweighs all other factors
● Ease is measured by—proximity, service hours, range of services, onsite
pharmacy

19. Retail Care Consumers Are Choosing To “Buy Time”
Consumers will follow the principle of least effort—the simplest path.

20. PCP CVS Walgreens Walmart URGENT CARE
Multiple locations
Online scheduling
Accepts walk-ins
Open beyond M-F 8-5
Provides treatment
Dispenses medications
Doesn't require insurance
See a physician X
Provides lab tests
Ophthalmology
Dentistry
Provides telehealth
Cost
9 31 45 26
POOR GOOD
Retail Care Consumers Ask: What’s In It For Me?

21. Consumers & COVID Reinvented Healthcare Purchasing in
2020
Healthcare purchasing now has an Easy Button. Consumers have:
● Same day and walk-in appointments
● REAL choice
● Grew Telehealth visits by 1,200% in 60 days
● Bypassed their PCP—many won’t return to the PCP model
● Chosen the ease access of getting care rather than in who provides their care

22. Consumers Raced To Purchase Easy Healthcare
Healthcare became a consumable service:
● Schedule appointments between 8-5 M-F
● Take time off from work to visit their PCP
● Make an additional trip from their PCP to the pharmacy
● Make an additional trip from their PCP to get further treatment
● Pay higher prices
● Consumers had 1-stop shopping for diagnosing, treatment, and prescriptions
● Consumers could schedule appointments online or receive care on a first-
come first-served basis

23. Healthcare’s Perspective—Mad Magazine
“What, me worry?”
● Consumer loyalty to a specific doctor is being replaced with easier access
● The lifetime value of a patient to a health system is about $200,000
● Health systems spend millions of dollars to acquire new patients
● Retail Care spends almost nothing to get new patients

24. Where Are The Largest Number Of New Patients?
As many as half of Telehealth & Urgent Care patients do not belong to a
provider’s system.
● Consumers view UC as retail healthcare that is a step above Retail Care
options
● 40-50% of walk-ins do not have a PCP
● Walk-ins access UC because it’s easy—locations, hours, cost
● Walk-ins often view UC as a onetime purchase

25. Why Do Consumers Choose Urgent Care?
Consumers chose UC because of options that are not available at Retail Care:
● Patients do not need an appointment and can get virtual care
● Patients see a doctor
● UC offers more services than a PCP or Retail Care
● UC provides treatment, not just diagnosis
● Locations are close to home or work
● Services are available other than just 8-5 M-F
● Patients do not need to have insurance
● UC average cost is 1/13th of an ED visit

26. The Bigger Picture…
25% of Americans do not have a PCP but 100% of them buy healthcare.
● Health systems have a patient acquisition model
● People have their own healthcare acquisition model (Retail care, Telehealth,
and Urgent Care) and that model does not involve using a health system
● The two models are as different as night and day
● Health systems have no idea what it costs to acquire a patient
● Health systems do not have the capability of capturing a patient when he/she
is asking, ‘Will I buy healthcare from you?'

27. What Is Urgent Care’s Issue?
Urgent Care is a revolving door—people walk in and they walk out.
● The health system spends marketing dollars to fill the funnel, but it does
almost nothing to capture and retain new patients
● The UC patient funnel empties as fast as it fills
● UC Patients are rarely captured by an affiliated health system
● Other than insurance information, UC only requires an ID and a method of
payment on new patients

28. Omni-channel Access Is Healthcare’s Opportunity
Create an Easy Button. Easy of access is a key differentiator.
● For many consumers, the 1st step in the purchasing funnel is online. Lose
them online and you may lose them forever
● Eliminates wait time for the patient
● Captures patient information