Medical practices turn to retail tactics to meet rising demand for consumerism

Sanova Dermatology hosts a booth at a community event as rise of consumerism in healthcare continues. Credit: Twitter

As healthcare continues to be swept up in a wave of consumerism, practices are looking to dip their toes in the waters of retail, mimicking business models that have long been consumer-oriented. Offering products isn't just a means of diversifying and supplementing revenue. Increasingly, it's necessary to survive as providers are now also competing against retail health offered in pharmacies and online, with Amazon and others. 

More than ever, patients are in control of their own destinies, and they've gotten used to certain amenities and conveniences. To stay relevant -- and to create revenue -- healthcare providers have to start offering similar experiences. 

Take Sanova Dermatology in Austin, Texas, for instance. The practice is looking to expand its retail offerings, and Matt Nachreiner, its director of operations and marketing, cites rising consumerism as the main catalyst.

"It's affecting healthcare in either a positive or a negative way, depending on how you have your business set up," said Nachreiner. "People are doing more searching online, and this has become much more visible to the consumer. You need to be able to provide the desires of the consumer."

Sanova sells sunblock and skin products, and in the coming months will be looking to expand on its retail presence, offering things such as loyalty rewards as a way to retain customers. It has become an important component of the practice's revenue stream and has contributed financially in ways that have allowed the business to stay competitive.

"It's a big part of what we do," said Nachreiner. "I've never seen a dermatology practice that doesn't do that to some extent, so there's a huge demand out there for it." He said using Breeze has allowed the business to "have that integration, which makes the workflows much more efficiently. Patients enjoy it. It's something we look forward to."

It makes sense that online retail offerings would be a significant source of provider revenue since the internet is where many potential patients spend large chunks of their time. The majority of consumers consult the internet in the search for a new provider, according to research from Kyruus, focusing on how consumers search for, select, and schedule appointments with healthcare providers.

The findings show that patients are taking a more active role in their healthcare decisions and vetting providers thoroughly. In fact, the data reveals that even when they receive a referral for a specialist, 90 percent still conduct research on providers before scheduling with them.

"When I think about consumerism, I think of three dimensions," said Juan Molina, vice president of strategy at CareCloud, a healthcare technology company whose Breeze platform facilitates a retail experience for providers. "The first is around patients as money managers. They have the ability to shop around. There's also the patient obligation side. We see the data -- we see that medical practices don't do a great job at collecting on this stuff effectively. Thirty-five percent of patient obligation is written off to bad debt."

Third, is patient experience, which has changed considerably during the last decade. 

"Ten years ago we didn't have an app saying your pizza was in the oven, or on the way," Molina said. "Our expectations are at meteoric levels, and we walk into a medical practice and our expectations aren't met."

One of the big demands consumers have is to be able to shop online. Some practices are already offering products -- a dermatology practice, for example, might sell lotions or sunscreens -- but lack an online retail presence. Others may still be contemplating their own product lines, or else they're in infancy. 

Whether a provider partners with an outside entity or employs a web team in-house, many practices have found new and different revenue streams by creating a robust online presence for both regular patients and casual shoppers.

Molina expects that as consumerism in healthcare grows, retail offerings will expand as well. 

"We're just meeting them where they are," he said.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com