Forecast 2022: Competition in retail healthcare will intensify. Here’s what to expect from Amazon, CVS and Walgreens

America’s largest retailers are betting heavily on health care. As patients increasingly demand lower costs and convenient care delivery, retailers like Walmart, Amazon, CVS and Walgreens have stepped in to meet their needs where traditional providers lack the resources to do the same.

All four companies accelerated their investments in healthcare this year, entering new areas from primary care to telehealth.

And the retail healthcare boom isn’t expected to slow down anytime soon. Next year, industry experts predict that retailers will increase their investments in key technologies and tackle issues such as social determinants of health and data sharing to deliver personalized healthcare experiences to consumers. their clients.

Here are five expert predictions for how the retail healthcare market will shake up in 2022.

1. Retailers will embrace omnichannel strategies while leveraging their strengths.

All four major healthcare retail players have adopted omnichannel strategies to some extent. The challenge for every company will be to capitalize on its strengths to capture its target market share, said Natalie Schibell, senior analyst at Forrester.

“We’re going to see fierce competition, and if these companies don’t create differentiators, they’re going to fail,” she said.

CVS has moved into omnichannel care delivery this year, with offerings ranging from prescription delivery to primary care. The company announced plans in November to close 900 physical locations over the next three years and create three types of stores: one for primary care, one for its HealthHUB locations and one for its traditional retail model.

“When they’re done, I would expect it to look like a for-profit version of Kaiser Permanente,” said Todd Huseby, senior partner in the retail healthcare practice at consulting firm Kearney.

RELATED: CVS Health plans 900 store closures, lowers forecast as retail strategy goes digital

Amazon has taken a similar approach, expanding its virtual care services and home care services in 2021. But Schibell said its biggest advantage is its massive consumer base and extensive supply chain, which it can leverage for prescription delivery after Amazon Pharmacy’s 2020 rollout.

“They have a large customer base and ultimately that will drive down drug prices for Amazon customers, which is a huge competitive advantage,” she said.

2. Patients will benefit from a more personalized healthcare experience from retailers.

Using new technologies and strategies tailored to each population, retailers will focus on personalizing the consumer experience in healthcare to improve access and build patient trust, said George Van Antwerp, Director CEO of Deloitte.

“It’s about understanding the consumer and being able to create a personalized set of experiences for them that incorporates this omnichannel strategy,” he said. “Based on where I am, my illness, my social coverage and my current dynamics, what is the best way forward for me and the best way for me to be supported? »

Van Antwerp said retailers will also need to consider the demographics of each location, taking into account the social determinants of health, when determining what services to offer and what types of clinicians to hire.

“The footprint of some retail health services in a college town can look very different than it might be in a seniors’ community,” he said.

With more than 5,000 locations nationwide, Walmart will excel in rural areas where access to care is limited, Schibell said.

RELATED: HLTH21: Where Walmart Focuses Its Health Efforts Over the Next 5-10 Years

And, as CVS opens new clinics, it will need to be strategic about where it places them.

“The reality is that the business will generate more revenue in the wealthier communities. I don’t know what their strategy will be, but historically that’s what we’ve seen,” Schibell said.

3. More money will go to primary care, at the expense of traditional clinics.

Retail primary care clinics are springing up across the country as companies double down on investment.

Walgreens increased its stake in primary care company VillageMD in October to majority ownership with a $5.2 billion investment, aiming to open hundreds of clinics through the partnership over the next four months. years.

These investments are only expected to increase next year as retailers look to replace traditional providers, at least for some types of care. Traditional providers will have to adapt if they want to survive, digitizing their services wherever possible and making it easier for patients to get appointments, Schibell said.

RELATED: Consumers Embrace Pharmacy Expansion in Primary Care, Says JD Power

“Primary care physicians across the country: pay attention. You’re going to have to make sure that you’re offering those digital services and that level of convenience,” she said.

4. Retailers will face the problem of interoperability.

If retailers want to be the consumer’s only source of primary care, they need to create data sharing solutions.

Relying on retail clinics for a portion of a patient’s care could help reduce overall costs, Schibell said. But while some retailers have made efforts to link patient records, like Walmart in its September partnership with Epic’s electronic health record, she said current solutions don’t fully enable the new model of care that these companies offer.

“It’s a more fluid approach, but I’m also a little worried. When you have all of these different options available, you’ll have patients who might go to their primary care doctor, and then they might go to a doctor at CVS or Walmart, and you need to make sure that the EHR reflects all of that necessary information. on this patient,” she said.

Huseby said companies could target interoperability solutions for mergers and acquisitions in the new year.

“I think you would expect to see significant investments in electronic health record interoperability,” he said. “What’s not clear to me is how all of this data from different EHRs and different vendors is going to go into a CVS or Walgreens or Walmart EHR that they present as a dashboard to the consumer.”

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5. Expect more investment in cloud solutions.

Seeing potentially millions of patients also requires robust data collection and analysis systems, and experts expect retailers to invest more money in cloud-based technologies for their needs.

CVS’s partnership with Microsoft, announced in early December, aims to personalize customer service by leveraging the tech giant’s tools, including cloud computing. As part of this collaboration, the pharma giant plans to migrate 1,500 new and existing business applications to Azure.

In July, Amazon rolled out Amazon Web Services for Health, with cloud-based solutions for healthcare, genomics and biopharma. The company recently announced that biotech giant Gilead Sciences will use its cloud services.

These investments will also help retailers personalize the consumer experience, Huseby said.

“They’re definitely going to invest in technology, it’s going to be cloud-based, because it’s going to help them automate and innovate faster, and it’s going to lead to a lot more consumer self-service on mobile devices,” he said. he declares. .

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