Healthcare retailization is the latest trend sweeping the healthcare space. Patient convenience is now the primary goal, as the industry moves away from older physician-centered models. How will healthcare players—both new and old—grapple with the subsequent changes? Widespread implementation of virtual care options, increased participation in the digital pharmacy space and new ease in booking methods (learn more in our September Health System Monitor Report on appointment scheduling) are all evidence of a healthcare space rapidly shifting to revolve around patients. Giants like Amazon, CVS and Walgreens are capitalizing on this change to establish themselves within the world of healthcare, bringing along with them innovative digital tools and virtual care methods that reflect the modernity of current healthcare technology.

The New Players Make Key Healthcare Retailization Acquisitions

Amazon initiated its healthcare journey in 2018 with the acquisition of PillPack, an online pharmacy, quickly followed by the acquisition of Health Navigator, a digital health startup, in 2019. Most recently, the global conglomerate purchased One Medical, a subscription-based primary care company that was the subject of our Health System Monitor Report in May 2022. Amazon’s latest healthcare bet is the nationwide expansion of its primary care platform Amazon Clinic. Members can interact with clinicians via messaging, videos or virtual consultations to receive treatments for common medical conditions and receive their prescriptions through Amazon Pharmacy.

OneMedical Member Site Homepage

Walgreens also bolstered its presence in the healthcare space by acquiring Shields Health, a specialty pharmacy, in September 2022, and following up shortly after with the acquisition of Summit Health, a primary and urgent care network, in the largest physician deal of 2022. The prior year, Walgreens entered the market with the purchase of CareCentrix, a home-based healthcare service, through its subsidiary VillageMD. With this diverse array of acquisitions, Walgreens plants a stake in the distinct divisions of the healthcare space and positions itself to build an intersectional health-oriented enterprise.

Summit Health Member Site Homepage

CVS’s back-to-back acquisition of Signify Health, a platform that performs in-home health evaluations, and Oak Street Health, a primary care provider specializing in senior care earlier this year established a concrete pattern among retailers. CVS beat out several competitors, including UnitedHealthcare and Amazon, in a bidding war for Signify Health, highlighting the company’s resolve to reserve a spot as a primary healthcare retailer.

A Competition for Telehealth and At-Home Care

These acquisitions display a clear framework of action. All three of these retailers are buying organizations specializing in telehealth or at-home care services, particularly for seniors, to ensure their healthcare branches have an extensive reach. The appeal of many home-based care platforms lies in the convenience of their online interfaces, which makes it essential to track the innovations these companies implement to enhance their digital experiences.

A recent CI report, available with a Pharmacy Monitor subscription, ranks both Amazon and CVS as leaders in the digital pharmacy space, particularly in authenticated homepage experiences. Despite recent entry into the field, these retailers are outpacing established pharmacies by leveraging their prior expertise on consumer preferences and digital UX. Amazon Clinic is already receiving customer praise for its effortless navigation and low prices, attributes derived from the company’s understanding of the retail industry. In contrast, CVS and Walgreens, while yet to unveil an online platform of similar magnitude, are actively embracing digital changes to drive company growth. The presence of these massive new healthcare players poses a significant challenge to longstanding facilities engaging predominantly with a familiar patient base, as loyalty and convenience go head-to-head.

Amazon Pharmacy Authenticated Site Homepage

The retailization of healthcare will change the way care is delivered. Industry experts are keeping a watchful eye on patient outcomes with both hope and caution. Done correctly, healthcare retailization could simultaneously lower patient costs and increase patient-provider satisfaction through better customer support and home-based service. As physicians can conduct more routine check-ups virtually rather than in-person, retailed telehealth could increase accessibility to preventive care by increasing the volume of patients seen. Retailed healthcare-models also show promise in focusing clinicians’ efforts on patients by reducing their administrative and scheduling duties that cause burnout. In cases of hospital visits, home-based post-discharge care reduces dramatic costs patients face after prolonged hospital stays. Younger and healthier patients may even prefer receiving retailed care, as these generations prioritize convenience and flexibility over loyalty to a single provider group or facility.

The Future

Overall, the emergence of retailers within the healthcare sector brings new promise of innovation and competition that could revolutionize the delivery of care and significantly change the patient experience. With increased emphasis on patient-centric care, widespread adoption of digital interfaces and new rivalries between legacy provider groups and corporate giants, the culture of healthcare stands on the brink of transformation.

Look to CI to keep up to date with the coming changes and check out our research services in four areas: Health Plan, Medicare, Health System and Pharmacy. For deep dives on specific topics, look to our Healthcare Briefings and don’t forget to check out our Insights section for more industry trends and best practices in the healthcare space.

Christal Oji
All Author Posts

Christal Oji is an analyst on CI's healthcare research team.