The ubiquitous SKU (“stock keeping unit”) concept was initially developed in the 1950s but really began to impact the retail industry in the 1970s with the introduction of barcodes and related technology. SKUs are not only a unique identifier or code for a specific product, but can also track price, manufacturer, where the product was sold, and other details. This seemingly simple string of letters and numbers turns out to be a central piece of product development and supply chain management. It has impacted store design, operations and marketing, and ultimately sales in the highly transactional retail sector, which is rapidly mobilizing to enter the health industry.
After all the ongoing disruptive events of 2022 (including massive decline in valuations, significant consolidation, some controversial blowups, etc.) it appears the market seems to be doubling down on retail-based primary care initiatives. Mark Cubans Cost Plus Pharmacy, Dollar General via DocGo, and now Amazon RxPass are entering the fray. All of this against the backdrop of big retailers—led by CVS, Walgreens, and Walmart—all making major moves to purchase primary care services, improve their existing offerings, or creating de novo integrated solutions.
Given this massive influx of investment, there has been sparse critical (reflecting careful analysis and judgment) commentary from the industry, press, and primary care advocacy organizations about the impact of adding more dis-integrated care channels to an already chaotic care “system”.
Consumers certainly need and deserve choices, and the industry should meet and serve the needs of the customer in contextually relevant ways. And, as I have said before, healthcare needs all the innovation and investment we can get in solving the systemic problems. Stand-alone retail care solves only one aspect of healthcare’s most pressing challenges—access—and for many, especially the underinsured and underserved, this is a critical step. However, this particular channel of care depends on and reinforces the transactional fee-for-service business model that is at the heart of primary care’s challenges. Retail care, on its own, is not structured to build nor sustain the personal relationships between patient and provider that are essential for creating a culture of care and caring. Retail Health owners will measure success as they do every other aspect of their retail businesses—based on sales—and the patient in this system is just another SKU to be processed.
The fundamental contradiction inherent in this space is these investments exist as an opportunity cost to, and ultimately a misallocation of capital away from, where energy, effort, and resources should really be directed.
Instead, we could be investing in Implementing High Quality Primary Care as a national priority. For Primary Care to really work, there must be relationship-based primary care, attribution and accountability, technology that enables new ways to connect to and interact with members, better data transparency and portability, and a way to measure and report the outcomes achieved when combining all of these elements together. Most importantly, we need first-principle thinking about how to get to the root cause of some of the basic problems of health delivery and not get distracted with partial solutions that can never move the needle. What is needed, actually, is more Primary Care, given that it is the only specialty in which an increase in the availability of its services equates to improved health outcomes. As we have discussed many times (here, here, here, and here), value-based care, at its simplest, is about receiving payment for patient outcomes, not volume. It is the antithesis of transactional fee-for-service practices that retail health perpetuates.
What I’m NOT saying is there no role for retail health in primary care. In fact, because much of traditional primary care had abandoned its claim on patients because of poor access and indifferences to whole-person care, the door has been opened to care channels that are, at the least, accessible and price transparent. Admittedly, there are times when a quick and convenient in-person or online assessment, diagnosis, and (not surprisingly, for retail clinics) a prescription are all that a patient needs. However, in order for a patient’s primary care team to understand the whole picture of his or her care journey, these transactional interactions need to be integrated into their records and someone needs to be able to have a holistic view of the care plan over time.
Creating true patient-centered, whole-person, and value-based care is hard work. Beyond the reform of payment models, it demands commitment by all parts of the healthcare continuum to work together to share data, to integrate disciplines, and to close the open loops and multiple gaps in care. The difficulty and complexity involved in designing, building, and paying for this style of primary care makes simpler strategies, such as retail care, understandably tempting. Mistaking these simple solutions as the solution is a mistake, one that further silos and fragments the healthcare system as a whole. Retail care has a role to play as an extender of a comprehensive, multi-channel primary care model, but it must be integrated into a coherent approach in order to be effective.
In my opinion, retail health will remain an isolated and isolating alternative to the possibilities inherent in a more robust and resilient form of Primary Care. If we continue to over invest and misallocate resources to partial retail health solutions, I am afraid we will all end up just getting SKUed.