Top 3 warnings to medical providers from the fall of retail

September 3, 2016

This is a call to action for all doctors. Practice owners are now facing many of the challenges small retailers in America faced not too long ago. Consumer demand has shifted the landscape in favor of larger product selection with online access. Doctors are being forced to adapt to the new rules of the game or get left behind.

Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Jake DiBattista, a territory manager at SimpleVisit, a video service provider for physicians. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

 

This is a call to action for all doctors. Practice owners are now facing many of the challenges small retailers in America faced not too long ago. Consumer demand has shifted the landscape in favor of larger product selection with online access. Doctors are being forced to adapt to the new rules of the game or get left behind.

Jake DiBattista

Doing business in the digital age has been reshaped by the expectations of American consumers, as they have come to expect better access and more variety when buying goods and services. Industry giants have risen to power by offering consumers the ability to buy more goods and services faster and at the click of a button. Starting a business without a website or plan for e-commerce in the current day seems naive.

 

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So how will this shift affect the next generation of medical practitioners in the United States?

There is no shortage of new technologies available to doctors, but there is a shortage of relevant technology and providers willing to adapt.

 It seems like every day, another electronic health record (EHR) system or mobile application is released claiming to be the one-stop solution to everything wrong with healthcare. With more than 300 EHR vendors currently on the market, who can blame doctors for feeling overwhelmed by it all?

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On top of this remains the fact that doctors are not properly trained to deal with running a company in the modern era of technology. Medical professionals are trained to care for patients, not to evaluate software and optimize efficiency.

Thus, new technologies are rarely embraced by small provider groups as the idea of evaluation and implementation is a bigger headache than the opportunity to modernize is worth.

While in the short term this may seem like sound thinking, the consequences of neglect are quickly approaching the small group providers as patients’ natural consumer desires for fast and easy access start to kick in.

 

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A study by Merritt Hawkins in 2015 found that only 17% of today’s physicians are in solo practice, a figure that stood at 54% in 1980. Additionally, the percentage of physicians who describe themselves as independent practice owners has declined from 62% in 2008 to just 35% last year.

Much like the independent medical practice, the small-town retailer was resistant to change and could not keep up with offering the broad range of goods and services his customers desired.

Retailers failed to compete with the big box retailers and online marketplaces in price and consumer access and thus were largely eradicated from the marketplace. Lack of capital  meant that the small independent retailers could not adapt quickly enough to compete with the big box stores in a rapidly changing ecosystem.

 

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In addition, having to pay rent meant retailers could not compete with the margins of online sellers. Those that did adapt early on, such as online shoe retailer Zappos, were able to enjoy massive success as their brick and mortar competitors around the country fell by the wayside.

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Putting this in the lens of medicine one can see many of the same struggles occurring. Limited services, inability to negotiate prices with insurers, and outdated technology are leading to a decline in the number of independent practices in the United States. By modeling their practices to best meet the shifting demands of consumers, practices can remain competitive in the digital age of medicine.

 

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 Early adopters are already reaping some of the rewards of on-demand and virtual care (often referred to as telemedicine), but we are still far from mass consumer adoption. So what can physicians do to stay afloat in a world where large health systems with massive budgets dominate?

Learning from the experiences of small independent retailers, we know that what the small practice lacks in overhead they make up for in flexibility and ability to adapt. Below are some strategies that small practices can adopt right now to help keep patients and remain competitive among consumers in the digital age.

Work Smarter Not Harder

There are many small steps providers can take to help their practice stay competitive in a shifting landscape. Creating or updating a practice’s website to be more welcoming and include features such as patient scheduling is an easy way for doctors to attract and retain the new generation of tech-savvy patients.

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Another way providers can engage with patients is by offering newly available telemedicine services. By giving patients the options to use their favorite apps and offer care via tools such as Skype, providers can leverage technologies patients are already using to create a more satisfying visit.

Create a memorable experience

It is important to remember that as providers, your business depends on the patients you serve. They are the consumers of the medical world and they are no longer limited in how they receive their care.

 

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Long waiting times and poor bedside manner have led to the rise of the on-demand doctor services that offer patients an alternative option for care, and bypass the primary care provider.

 By creating a more welcoming environment, the provider can increase the chance that a patient will keep coming back for care, or even better, be a referral source for family and friends. The provider must create value in their relationship with the patient or the patient will find cheaper and more convenient options for care.

Embrace Change

There is no use fighting the shifting tide of integrated medicine. Sadly, providers rarely open themselves up to innovators and entrepreneurs who are looking to aid them in their goal of providing care.

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Do not be like the independent retailers and live in denial until it is too late. Take the risk and be an early adopter. Providers can stay ahead of the competition by offering to pilot new technologies, which usually are offered at discount rates to initial customers.

 

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Looking at those retailers which have thrived in the age of big box and online sales, we can see many of the principles stated above in action.

 Coinciding web stores, or websites that serve as an alternative option for consumers to purchase your goods, are now commonplace for retailers and for most new retailers it is often the fastest way to get new products to market.

Retailers no longer are just shelves that hold inventory. They are venues where consumers go to hang out, play, and experience the products. Can you imagine an Apple Store where the products are in boxes?

But most importantly, those that have survived realized early on the importance of adapting. They embraced shifting consumer trends and were able to survive on the quality of their goods and merit of their service. The provider-patient relationship is key to improving healthcare in America, we must keep it alive by learning through the failures of independent retailers.