Healthcare Delivery is Becoming More Decentralized: An Opportunity for Insurers?

Posted by Jacob Golbitz on Jun 23, 2015 2:00:00 PM
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As part of CVS’s acquisition of Target’s 1,660 pharmacies, CVS announced it will rebrand Target’s nearly 80 in-store clinics as MinuteClinic and open up 20 new clinics within Target stores over the next 3 years – all this as part of the company’s plan to operate 1,500 clinics by 2017.

Earlier in June CVS announced it had become an in-network provider with Molina Healthcare of Ohio, a health care insurance plan operating in Ohio with 340,000 members. This makes sense for Molina, as the MinuteClinics lower cost will lower Molina’s costs, and members benefit as well with increased convenience and accessibility.

I suspect we’ll continue to see payers embrace MinuteClinic and other retail venues for health care as a way to reduce costs. But retail clinics are not going to supplant primary care centers as they are suitable only for simple issues, so consumers will be patients at both types of facilities, to the extent that they use retail clinics. And they will – CVS is betting 1,500 locations on that. Consumers will also use the growing number of stand-alone urgent care centers when they’re more convenient than traditional primary care centers, which given the inefficiencies of traditional primary care, they often will be.

The trends of cost reduction and increased consumer convenience are resulting in a consequential trend – the decentralization of day-to-day health care. In a previous post we described how health care insurance companies could provide the platform or medium through which consumers consume health care; this decentralization of health care delivery supports that kind of evolution on the part of the insurers as the primary care physician is going to be less of a central figure in health care consumption. But health care can be complicated and consumers will want to have some central point of contact, and what will continue to be the common thread for consumers as they navigate our decentralizing health care system? Their health plans.

Topics: Consumer Goods, Brand Insights, Market Analysis, Pharma, Healthcare, Life Sciences, Merger and Acquisition

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