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Paradigm shifts in healthcare retailing biz models
RETAILInsight Healthcare Retail: Picking up pace Kapil Khandelwal says that healthcare retail emerged as a concept around two years ago. However, its convergence with cross-domain sectors like retail, education and manufacturing is a very recent development O Over the last few years, the Indian retail, healthcare and Organised retailing information communications and technology (ICT) In urban India, it is estimated that over 200 retail stores sectors have undergone rapid growth and transition to and malls are in the pipeline, with over 200 million meet the western standards of quality and service square feet of space. Under the current circumstances, delivery. However, the current economic slowdown is with the lowering of rental yields and higher cost of forcing each of these sectors to rethink their business finance, it is imperative to innovate newer retail models. and operating models and innovate. Healthcare retailing and care delivery Current trends and challenges ahead With approximately 4-5 percent of the overall organised The current economic scenario has created several retail space in urban India dedicated to healthcare and systemic shifts in the way retail, healthcare and ICT allied products and services, there is potential to grow players can leverage the emerging consumer trends and be at par with our western counterparts. and challenges. ICT services ICT players and solution providers in India have introduced new low-cost solutions that can serve a potential population base of over 70 million in urban and semi-urban India. The role of ICT services is expected to grow the distribution of healthcare delivery outside the traditional setting of the doctors clinic. With the kick-off of national ID initiative announced in the recent budget, a unique ID would serve in enabling a portable healthcare record system in a seamless health information system linked to the unique ID by the healthcare and ICT solution providers. Consumer needs and preferences There are potentially over 40 million households in urban and semi urban areas, predominantly in the northern, western and southern Indian states that have a high risk of chronic diseases, given the genetic disposition. With consumerism in healthcare, households in SEC segments A and B have identified issues to access and price their wellness, preventive, curative and chronic healthcare, pharmacy and support services. With the current economic slowdown, there have been increased preferences to switch and delay wellness and preventative care products and services. Consumers also prefer providers who can give appointments the same day, consult over the phone, or extended hours and 24 RETAIL BIZ JULY 2009
RETAILInsighton weekends or holidays in the same shopping vicinity,avoiding long trips. Clearly, price and proximity mattersas consumers are altering their shopping patterns forprice, availability and access. Some of the aboveemerging trends in the sectors are enabling aconvergence and a paradigm shift towards health retail2.0. that leverages on the convergence of retail andhealthcare delivery integrated with ICT solutions.Healthcare retail 2.0: Conceptual frameworkHealthcare retail 2.0 emerged as a concept around twoyears ago. However, its convergence with cross-domainsectors like retail, education, manufacturing, etc is a veryrecent development. There are several key characteristicsthat emerged as a result of this: A new location or a way of connectivity betweenpatients, and patients with their care provider The sharing and transparency of information aboutcare, health and providers, and the support in choice anddelivery of healthcare care in a retail format The self-management and access to healthinformation of individual patients in any health status,whether healthy or chronically sick Interoperability of health information, which benefitsthe sharing and access to this information leveraging ICTtechnologies from one service provider or location quick consultation and turnaround for the wholeto another spectrum of healthcare, right from wellness to chronic The empowerment of patients through widespread disease management. Such clinics would have specialistand richness of information to make choice on the physicians available for consultation virtually, for referral.location of his care and its setting The open conversation about and innovation of health Emerging retail formatscare through consultation of all stakeholders and Some of the newer formats that would emerge out ofapplication of a new business model based on multiple health retail 2.0 convergence would be ones that createvalue creation new innovative and disruptive delivery models of Growing role and importance of various players and healthcare in India. These would include:intermediaries, who enable the conversation between In store clinics:patient and caregiver, at the same time contributing to it These clinics would look like urgent care clinics that would be located in retail/pharmacy chains with a space The branded healthcare clinic chains have been in of 100 to 200 sq feet. The nurse/general practitionerIndia for a few years with well established names such as would have access to specialists for referral to the hospitalApollo, Manipal, Fortis, Kaya, Ayush, VLCC etc. to name chain to which it is affiliated. These clinics would bea few. Newer ICT-enabled models such as EMRI, HMRI, operated seven days a week with extended hours.Healthcare Magic, etc have also emerged as a Medical spas:complement to delivering healthcare consultation and These would potentially be offering lifestyle orientedresponse remotely. Initiatives in rural India are already consultations within salons and spas. They would addressongoing to ensure that the village entrepreneur who is areas from nutrition, exercise to massage, cosmeticoperating the Information Kiosks can also enable surgery etc. These outlets would be affiliated to beautyICT-enabled healthcare delivery. Diagram 1 in this article and cosmetic counters.provides a contextual frame of reference for healthcare Express health and diagnostic clinics:retail 2.0 operating model. Typically staffed by a nurse or a general practitioner, these With potential retail space available in metros, urban are walk-in clinics to facilitate quick diagnostic and checkand semi urban at lower rentals, there is potential for a up for non-emergency care for preventative and chronicbusiness model of conveniently providing standardised, care.fast, limited services at transparent prices by retail chains Health and wealth counselling:in partnership with pharmacy or healthcare clinic chains. These clinics would provide specialist counsellingThese clinics would be enabled by technology to facilitate sessions that would involve both a health assessment and RETAIL BIZ JULY 2009 25
RETAILInsight insurance/wealth management advise including product Cost: solicitation. The formats here could be single brand While consumerism is forcing transparent low-cost or multi-brand. models to emerge, successful models would be the ones Specialist clinics: that can clearly provide value at lower operating costs. A Linked with particular brands and products, these clinics transparent menu card pricing approach for the services would offer scope for augmentation through specialist would drive traffic. While costs and time are critical consultations with dermatologists, dietician, dentists etc. elements of this model, retailing of healthcare would need Call center-based disease/case management with b to create an ambience which is in line with these. community clinics: Standardisation of services: This model emerged in the US where case managers are Care delivery models that would have standarised process assigned to the patient who is chronically ill. In case of would have the biggest impact on the cost and value any consultation or walk-ins required, the patient walks delivered. These could be stretched further to include into the in-store clinics in their community. quality measures to improve on the services and the care Kids health and wellness: outcomes. These clinics are within children stores that can provide Time and place convenience: easy diagnosis for common ailments and also One of the critical riders of success of such models is the vaccinations and inoculations that are due. ability to provide seamless 24x7 anytime, anywhere service. ICT technologies coupled with location of Key success factors for healthcare retail 2.0 such clinics would augment the value of the While the jury is still out there to evaluate the emerging services delivered. shifts in healthcare delivery innovation in India, some of Branding: the critical success factors to this emerging model for care Services co-branding with healthcare products/services delivery include: provider would definitely positively associate with such Integration with hospital provider: services and also enable additional foot falls into the retail Consumer confidence to such disruptive innovation in outlets. healthcare delivery would be instilled if there is a Information technology: branded hospital provider supporting the seamless Affordable, compact diagnostic devices that are delivery of care. connected with healthcare ICT systems and evidence- Diagram 1 Wellness Health Status Disease Treatment & Prevention (CDC Adapted) & Management Heally Vulnerable Aﬀected Sick (Acute) Sick (Chronic) Virtual Home location Work Employee clinics Outpatient clinic Healthcare retail 2.0 Emerging Urgent care clinics (After hours) Hospital Long-term care 26 RETAIL BIZ JULY 2009
RETAILInsightbased health information systems are the key to success in India, these clinics would be low-cost access points forfor any retail-based healthcare delivery model. customers and opportunity to augment their service Continuity of care: offerings.As the retail models of healthcare delivery would evolve Venture funding and investors:over time to become mainstream, the need for continuity The key driver for growth of such innovative models forof care for conditions is important. Linkages through healthcare delivery would be funding for such outlets.hospital tie-ups and information systems is an important There is potential for PE and VC firms to explore suchaspect here. models for entrepreneurial investments in healthcare that provide quicker break even and exits in less thanKey stakeholder perspectives three to four years timeframe.The win-win from various stakeholders in the emerging Quality accreditation agencies:healthcare retail models would have to be analysed to Agencies like NABH, JCIA etc would have to evolveensure that tweaks are made appropriately for long-term approaches to ensure that these models are accredited tosuccess: provide consumer confidence. Retailer/mall host: Consumers:The retail player gains through participation in the The healthcare retail models offer consumers to decidemodel by ensuring increased foot falls and private label how, when, where to seek healthcare services from asales. Apart from lease rentals and/or profit sharing, wide range of options and formats. Most conventionalother incremental revenue streams that would accrue healthcare providers may disagree about what thefrom this model include shelf slotting fees, co-promotion patients think and require. However, the innovation lifeand sponsorship. cycle in retail takes three to five years to mature as Healthcare retail operator: compared to over 15 years in healthcare and hence thisWhile the economics for the healthcare retail operator could lead to breakthroughs in meeting consumerare challenging, the operating costs have to be managed requirements.tightly. The pricing strategy would have to ensure that With the successful emergence of variousthere are adequate number of customers averaging four healthcare retail formats and transparency ofto five per hour. information about care, health and providers, and the Healthcare insurance providers: support in choice and delivery of healthcare care in aWhile outpatient visits are currently not covered by many retail format, there is nothing can that stop healthcareof the health insurance providers in India. These models retailing in India from moving forward and achievingcould enable newer products that would cover outpatient an at par status with its western counterparts in thehealth insurance as well as tie-ups for health-wealth years to come.counselling setting to solicit health insurance coverage. Disease management providers: The author is one of India’s leading experts in healthcare andAs new models of chronic disease management emerge life sciences IT in Asia Pacific and emerging markets. RETAIL BIZ JULY 2009 27