Retail industry and health systems can improve care together

They should coordinate their complementary services to assist consumers and better address the needs of employers and insurers.

The Covid-19 pandemic and its aftermath have clearly highlighted the deficiencies in healthcare delivery in the United States and many other countries: rapidly rising costs, inconsistent quality, and inadequate and unequal access to primary and other types of care. However, if retailers and health systems were to form strong partnerships, they could play an important role in addressing these major challenges. While some retail-health partnerships exist-for example, one between Target and Kaiser Permanente in Southern California that began in 2014-they are rare and have only scratched the surface of their potential. To fundamentally change the way health care is delivered, more of these partnerships are needed, and many of those that exist need to be reoriented toward a different goal. Rather than focusing on the direct-to-consumer model that retailers have largely employed to provide some basic services, partnerships must offer a much broader focus. They should, of course, target the needs of consumers, but they should also help employers and insurers manage the overall health-and health care spending-of the populations they cover. In this article, we make the case for these partnerships and highlight four key actions that retailers and health systems should take to achieve this broader goal.

The health care offerings of many retailers-either on their own or in partnership with health systems-are limited primarily to routine, one-time services, such as taking a strep throat culture, treating an ear infection, or administering a shingles vaccine. Retailers have emphasized convenient care. But now they must move to comprehensive care.

Some retailers, including CVS, Walgreens, Walmart and Amazon, are beginning to move beyond Retail Care 1.0 by adding services such as chronic disease management coaching, primary care, mental health counseling and home care. For example, a recently announced partnership will allow Costco members to pay out-of-pocket for simple telemedicine services offered by Sesame, an online marketplace for healthcare appointments. Similarly, Amazon Clinic offers video telemedicine visits that customers seeking "convenient and affordable care for common conditions" can pay for directly. But these offerings still fall short of comprehensive care. For example, they lack integrated services for patients with complex conditions who must regularly interact with multiple providers. Even with the best preventive care, patients will need complex cancer treatments, orthopedic surgeries and coronary stent insertion. A close partnership between a retailer and a health system will help integrate the many elements involved in treating more serious conditions.

Home delivery giant Instacart recently partnered with care providers to deliver food to patients' homes, including prescription meals for people with hypertension or diabetes.

Beyond integrated clinical services, partnerships between retailers and health systems could also help address the social and economic factors-often referred to as social determinants of health-that lead to chronically poor health outcomes for many patients. Several health systems, such as Boston Medical Center and Geisinger Health, have started "food as medicine" initiatives to help their patients with diabetes and other chronic conditions access healthy foods. But major retailers, which have far more experience in managing grocery services-both in stores and through home delivery-could provide those services more effectively and on a much larger scale than a hospital system. A handful of health systems have realized this. Case in point: home delivery giant Instacart recently partnered with care providers such as Boston Children's Hospital and Mount Sinai Health System to deliver food to patients' homes, including prescription meals for people with hypertension, diabetes or kidney dysfunction. (One of us, Vivian, is a member of Boston Children's Hospital's board of trustees.)

To date, partnerships between retailers and health systems have not reached their potential to improve population health. This is because each party has remained in its comfort zone, focused on preserving its core business. For many retailers, the priority remains attracting customers to their stores; for many health systems, it is to care for high-acuity patients and keep hospital beds as full as possible rather than provide holistic care. Retailers and health systems must move toward a model that produces better health outcomes for populations, not simply more medical care.

If retailers and health systems can work to implement the four actions we discussed, they can reduce healthcare costs while improving access and quality. They could make the care they provide more comprehensive and provide it closer to patients, even within their homes. They could generate insights from new integrated data sources. They could redesign the work and workforce needed to provide better care to patients. If focused on these priorities, partnerships between retailers and health systems have the potential to change not only the underlying business models and performance of both parties, but also those of the health system as a whole. They could generate improvements that would benefit not only patients, but also the organizations that pay for their care.

Collaboration: Grupo Auge | HBR.