retailization hearing healthcare

Retailization of Healthcare

by Amyn M Amlani, PhD  

Healthcare has changed and continues to evolve. Decades ago, a patient would schedule an appointment with their provider based on their insurance coverage, the provider then diagnosed and recommended a treatment protocol, and that protocol would then be executed, followed by a post-treatment visit(s).

The recent healthcare model is quite different, with service provision and treatment outcomes steered towards the retail market. Take, as an example, the CVS Minute Clinic model. CVS is a large, pharmacy healthcare provider that operates a walk-in medical clinic. These clinics offer 125 services ranging from a wellness screening to immunizations, and from diagnosing and treatment of minor illness to minor injury. Once an individual is seen either by a physician’s assistant or nurse practitioner, the patient becomes a captive consumer in a retail outlet. This retail model promotes accessibility, affordability, patient-choice, pricing transparency, convenient locations, extended service dates and times, and online purchasing availability.

Over the past few decades, audiology has seen attempts to move the profession from the traditional model to one that is retail-based. Examples include the Costco retail model, the now-defunct CVS Hearing Centers and, more recently, the online presence of Lively Hearing Aids and anticipated availability of the self-fitting Bose devices.  


Consumerism in Healthcare


Since World War II, employers were the primary source to fund health insurance benefits. That is, employer-financed healthcare often meant that the employer selected the payer and general benefit structure of the healthcare plan, leaving employees with few choices among the differing benefit options.

Recent increases in the cost of healthcare premiums have forced employers to demand less expensive models of providing healthcare to employees.

One less expensive offering is the high-deductible plan. Here, the benefit structure is one where the deductible ranges in the thousands, shifting the cost from the employer to the employee. As such, the employee must become a more involved consumer during the healthcare decision-making process, and price transparency became a focal point. Employees now shop for the best price and value, and often make qualitative comparisons about their healthcare needs.

A second major change was the shift from a “defined benefit” plan to a “defined contribution” plan. In this model, employers contribute a certain dollar amount to their employees, requiring them to go to private exchanges and select their own healthcare plan. This model allows the employers to provide healthcare coverage to its employees while distancing themselves from engaging in the healthcare delivery business.

These factors have been catalysts in shifting healthcare from a business-to-business model to the more contemporary business-to-consumer model. In the business-to-consumer model, employees are now directly paying the bill, and in doing so, there is an increase in their engagement of the products they purchase and the services they receive. This shift in purchasing behavior has been termed the “retailization of healthcare.”


Consumerism and Hearing Healthcare


A critical aspect of the paradigm shift in consumer behavior is understanding how patients are assigned to a provider within a healthcare delivery system. For example, a patient requesting an annual wellness examination is more likely to be seen by a physician’s assistant or nurse practitioner than a primary care physician. In addition, such an examination is just as likely to occur in a medical setting as it is in a retail outlet.

Hearing healthcare has yet to define how to assign patients to providers given the complexity of the patient’s listening difficulties and the various treatment options available. The closure of CVS Hearing Centers is one example.

In addition, hearing healthcare appears reluctant to embrace that diagnosis and treatment can occur outside of the traditional brick-and-mortar setting, which includes teleaudiology and mobile hearing aid fittings.

This lack of clarity and reluctance, I believe, are primary catalysts that fuel the negative perception towards the forthcoming, regulated, direct-to-consumer market. In addition, this unwillingness to embrace change is, in part, one aspect that hinders growth in a market ripe with a bevy of listeners who could benefit from services provided by different levels of professionals in various segmented markets.

In a future blog, the reader will be provided an in-depth assessment of various factors to be considered as audiology moves toward a retailization model in the healthcare space.

About Amyn Amlani

Amyn M. Amlani, PhD, is President of Otolithic Consulting, a firm that provides market analysis, financial services, professional development, and technology assessments. Dr. Amlani has been in hearing care for 25+ years, with extensive professional experience in the independent and medical audiology practice channels, as an academic and scholar, and in industry.