Voices: the CMB Blog

Over the last year I’d heard rumors of a new “super” Walgreens coming to Downtown Boston. To be honest, it sounded a little odd: a Walgreens with a sushi bar? A nail salon? But sure enough, one sunny day in May, a coworker announced the giant Walgreens had finally opened; of course I had to check it out. The moment I opened the doors I was like a kid on Christmas morning—this is not your mother’s Walgreens.

The aisles were brightly lit, and everything was clean and well organized, but what really blew my mind were all the high-end amenities: a juice bar, frozen yogurt bar, fresh sushi, and a pharmacy that looks more like a very nice health center than a regular old pharmacy area.

It’s certainly not how most of us perceive the Walgreens brand; but it’s all part of their efforts to transform the customer experience and they’re doing it in a number of really interesting ways:

An innovative approach to the community pharmacy and health services—Like most drugstores, Walgreens' traditional stores are split between retail and pharmacy/health care services. In the new store model, there is a health and wellness wing, including consultation rooms where pharmacists and other healthcare professionals come out from behind the counter to speak privately with customers. New patient-facing “portals” allow customers to schedule appointments, access information, and share health contacts—empowering customers in the way the old model never has.

Integrating the wellness focus throughout the store—Not surprisingly, Walgreens reimagined pharmacy is getting most of the press, and it’s well-deserved. But I was also struck by how the company highlighted healthier food and beauty options in each department. At first, doing your food shopping at a drugstore sounds both unappealing and unhealthy—all processed food and junk, but if others follow Walgreens lead, that might  change. While the juice and sushi bars might have seemed at best gimmicky, and at worst like a health hazard, the holistic focus on wellness and health means that what might have seemed unimaginable (drugstore sushi?) really starts to make sense. I swear the sashimi was actually good!

Getting mobile—Walgreens' new concept also does a great job leveraging mobile to transform and improve the customer experience across departments. For instance, you can scan your prescription bottle to get a refill. That might seem like a no-brainer in this day and age but how many of us are still calling our pharmacy’s automated hotline?

And hard as it may seem to believe, not everyone just posts all their pictures to Facebook, Walgreens' QuickPrint option lets customers print their pics right from the phone they took them on. It’s a smart move for a company that realizes the drugstore photo lab may not be with us forever.

As Walgreens President and Chief Executive Officer Gregory D. Wasson puts it: “We are taking a multi-pronged approach to delivering the Well Experience. We are combining leading-edge design with enhanced products and services, increased engagement with team members and customers, and an omni-channel approach that blends our brick-and-mortar stores with e-commerce and mobile commerce. We are deliberately blurring many retail channels to fit how consumers shop today.”

Bravo Mr. Wasson, bravo.

I’m looking forward to seeing what other benefits are in store for Walgreens customers. But in the meantime, I’ll have plenty to explore at the new, impeccably designed, Super Walgreens. And for all my fellow Bostonians, the next time you need to pick up a birthday card, wine, or health and beauty products, I suggest you make a trip Downtown.

Posted by Stephanie Kimball. Stephanie is CMB’s Marketing Operations Manager and loves any and all sports, the beach, traveling, marketing, good food, and is always down for a movie night. You can follow her on twitter @SKBalls

See how CMB is helping Royal Caribbean measure guest experience and improve customer satisfaction and retention. Click here.

Over the past 3 years, there has been no shortage of attempts to forecast the impact of the Affordable Care Act (ACA) on patients and insurers, but the truth is, the changing care model has ramifications that extend well beyond the waiting room. The multi-billion dollar medical device industry is smack-dab in the middle of tremendous regulatory and economic changes—including the ACA and the Medical Device Excise Tax (MDET). Earlier this year CMB’s MedTech team partnered with the Massachusetts Medical Device Industry Council (MassMEDIC) to survey 123 of their members for their perspectives on the past, present, and future expectations for innovation and growth in the medical device industry. Below, are a few highlights from The 2013 MedTech Industry and Innovation Study:   

• One of the most profound shifts, reflected in the results of our study, is the emerging influence of economic buyers on medical device innovation. The traditional med device market model places physicians at the center of innovation efforts, and to be sure they’re still very much at the forefront of med device companies’ minds. But as the ACA’s cost containment policies come into effect, hospital administrators and insurers will see their influence grow, as they become increasingly involved in purchasing decisions. Indeed, while just under one third of respondents said they have focused their innovation efforts on economic buyers in the past, 53% said economic buyers would receive their attention in the future.

• Not surprisingly, the MDET has elicited a great deal of conversation, with med device companies’ still strenuously objecting to the tax that came into effect last year. However, while the industry as a whole has actively advocated for MDET’s repeal, a surprising 40% have yet to plan to address the tax. For those who have made or acted upon plans to address the tax, workforce reductions and reductions in R&D spend top the list of mitigating actions.  Despite considerable concerns over the changing care model, many respondents were optimistic for the future, with the bulk of respondents expecting increased revenue, both inside and outside the US in the coming 5 years.

• Asked to evaluate their performance on key success factors, the vast majority indicated that their company currently meets or exceeds expectations when it comes to identifying customer wants and needs and determining the most compelling features set—table stakes in new product development in any industry. Respondents also identified areas for differentiation (i.e., capabilities that are important for future success, but that most don’t perform well on).  Organizations that with the following core skills will win in the future - prioritizing resources, determining how to price product(s)/service(s) given the dramatic changes, and developing compelling clinical data to support their product(s)/service(s). 

Click here to read the full report.

The results of this study were presented at MassMEDIC's 17th Annual Conference on May 8th 2013.

 

 

Andrew runs CMB’s MedTech practice and has spent the better part of the past decade helping some of the most successful MedTech companies make difficult strategic decisions.  In his free time, Andrew enjoys scrubbing into tracheotomies with clients, and running with his dog Moby.

I don’t want to brag, but my smartphone is in really good shape.

Like millions of other people, I have multiple fitness and health-related mobile apps, and they’re constantly alerting, pushing—begging me to login, add my stats, and track my diet and exercise. And while I’ll confess there are times these apps get more of my attention, they are awesome tools for getting and staying in shape.

Of course, they’re not a brand new phenomenon, and in a 2011 Consumer Pulse study: Consumer Perspectives on Health and Wellness, we found 7 in 10 smartphone users interacted at least weekly with mobile fitness and diet apps. With smartphone ownership growing, the number of people using these tools has only increased, and companies are responding by bringing new and exciting additions to the mobile health (“mHealth”) app marketplace. In fact, over the next 5 years, the mHealth market is expected to grow annually by 23 percent.

There’s much more to mobile health than tracking calories and reps, and what’s truly exciting is mobile’s capacity to revolutionize how we understand and manage our health.  As Mark Curtis notes in “Your phone will know you are sick before you do,” new mobile technology—like “body hacking” will put more of our own health data literally at our fingertips. Body hacks include tools like GlucoDock, a plug in for the iPhone, allowing diabetics to track their blood sugar easily on the go; or the simple but elegant pill bottle cap that connects to a patient’s phone and alerts them when it’s time to take their meds.  Besides being extremely clever, these mobile technologies also change how we interact with those involved with our care—hospitals/providers, insurers, and pharmacies. These tools have the potential to give patients an unprecedented level of control and involvement in their own care. What was once hidden in a doctor’s files is now available to be examined by patients themselves.

Way back in 2011, we asked consumers how much they expected to communicate with their healthcare provider, insurance company, and pharmacy in the next few years. Of those who used mobile apps to perform health and wellness activities, over one-third expected their digital communication with each to increase. Well, these “next few years,” are here. Health apps are no longer restricted to physical betterment through diet and fitness; they’re helping us take control of our own health maintenance—from identifying ailments to tracking provider-patient interactions. What’s next? Look into your crystal ball, what do you wish your phone could do to make and keep you healthier?

Hilary O’Haire is an Associate Researcher at CMB. Although she enjoys working out and her RunKeeper app, a love for good food keeps her determined to eat at every Boston restaurant ever featured on a Food Network show.

 

Read our latest Consumer Pulse: Leveraging the Mobile Moment: Barriers and Opportunites for Mobile Wallet.

While the rest of us breathe a sigh of relief that the fiscal cliff threat is behind us, the MedTech industry is feeling the pain of the new medical device excise tax, a part of the Affordable Care Act (ACA).  While it remains to be seen whether the promised influx of patients resulting from the ACA will ultimately generate enough revenue to offset the tax, looking at the current state of US healthcare (Click on Figure 1 for Larger Version) it is painfully clear that additional tax revenue alone is not the solution; rising costs must be addressed in a meaningful way. 

Innovation to develop products, services, and systems that are more effective and efficient is critical to solving the healthcare cost problem. While the majority of MedTech organizations historically focused their sales and service efforts on their relationship with physicians, there is an increasingly vocal group, including doctors, patient advocates, and policy makers, who believe the key to healthcare innovation lies in empowering patients. Because patients ultimately make decisions about things like diet, exercise, when to seek treatment, and disease management, they have an enormous influence on the cost and the effectiveness of their own care.  In fact, some believe that 80% or more of healthcare decisions are made by patients, not medical professionals. The idea is that if we can empower people to be more informed and engaged in their care decisions, they will be the driving force behind improving the efficiency and effectiveness of the healthcare system. 

Assuming the care system does evolve in a way that empowers patients, many MedTech organizations will be under increased pressure to incorporate features in their products that impact patient’s behaviors and help them make better lifestyle decisions.  For example, imagine a pacemaker that can provide a patient with information in real time through a smart phone app that will help him become more conscious of decisions about sleep, diet, and exercise.  These types of patient empowering innovations have the potential to dramatically change healthcare in the US (and worldwide).  And MedTech companies have the opportunity to drive this change; however it will require a shift in how they have traditionally learned about their markets.

As MedTech companies race to innovate, they will likely hold internal brainstorming sessions, meet with physician advisory boards, and speak to their sales and customer service groups. The problem with these approaches is that it leaves out the most critical component— the patient, the key to successful innovation.  To generate this intimate knowledge of patients, organizations need a plan—a change from how MedTech organizations traditionally approach innovation.  One that does the following:

1. Identifies what customers ultimately want and need from their healthcare.  Talk to patients living with the disease state; understand their daily struggles, and what would improve their healthfulness.

2. Prioritize what matters most to patients based on the most pressing needs of the patients; organizations should not invest time and money in trying to address each item identified by patients.  Fortunately, all wants and needs were not created equal. Instead, companies should focus on developing solutions that address those needs that are most important to healthcare consumers.  Additionally, there are likely groups of patients that have different priorities, and organizations should consider whether and how they address these different groups.

3. Translates these prioritized wants and needs into solutions.  Armed with a detailed understanding of what matters to healthcare consumers, organizations can apply their expertise to develop elegant solutions that satisfy the most critical unmet needs.

4. Establishes metrics that indicate whether the solutions they have developed are truly empowering healthcare consumers and adding value to the system.

MedTech companies face a future of great uncertainty and opportunity; however it seems clear that in the context of the Affordable Care Act and the evolving nature of today’s care model, patients are going to become increasingly important.  MedTech companies will need healthcare consumer insight programs to uncover the wants and needs of their patients and discover the addressable white space. Their intimate understanding of their patients is enabling them to pull ahead and gain a decided competitive advantage.The winners aren’t going to be those who bring solutions to market first but instead those who can translate deep insight of patients into game changing products and services. 

Andrew runs CMB’s MedTech practice and has spent the better part of the past decade helping some of the most successful MedTech companies make difficult strategic decisions.  In his free time, Andrew enjoys scrubbing into tracheotomies with clients, and running with his dog Moby.

Along with millions of Americans-patients,doctors,lawyers and, politicians-health insurers also waited with bated breath for last week's Supreme Court’s ruling on health reform. Now that the Supreme Court has upheld the basic provisions of the law, health insurers face the challenge of understanding how traditional markets will be impacted by the individual mandate and implementation of health insurance exchanges.  

Even with the ruling, there is still much that remains unknown about the law’s impact, and significant uncertainty about how the law will be enforced in each state.  But there are still critical questions insurers must consider now as they adapt to a new era in health reform, including:

• How will this ruling and the establishment of exchanges impact company revenue and profitability?  Are there ways to take advantage of this ruling and increase company margins and revenues?

• How do we compete effectively in an open exchange?  If price is the key criteria to consumer decision making, is there a way to minimize its influence and yet be successful?

• Is there a need to re-examine the existing client base beyond the traditional demographics? Will an alternate classification help create a competitive advantage?

• How do we move beyond the traditional employer sponsored channel?  How can we take advantage of technological shifts?

• How relevant is the present communication strategy? Is there an opportunity to approach the future in a new, cohesive way that complements the product and distribution strategy?

Addressing these questions and mitigating the coming challenges will not be easy; surviving and flourishing in a changing market requires a truly new and innovative approach. We believe insurers must:

• Reconsider how they approach product development – the insurers who will be successful in this new reality will be those who are able and willing to stretch boundaries of what insurance products look like to meet the needs of the customers, including offering supplemental insurance, wellness programs, incentives and monetary gains for meeting health goals, etc.

• Go beyond traditional ways of looking at the market – motivations, attitudes, goals, and behaviors will become as, if not more, important to understanding and effectively messaging to insurance customers. Alternate classification of consumers could help insurance companies underwrite consumers in a more effective and efficient manner.  This could be especially advantageous for smaller insurance companies that cannot compete solely on price; perhaps it is time to start looking at a niche strategy. For a more detailed look at alternative market segmentation for health insurance, read our white paper: A New Approach to Segmentation for the Changing Insurance Industry.

• Embrace the leaps in technology – insurers must explore the possibility of reaching consumers directly (internet, smartphone, etc.), and simplifying the purchasing process.  A simple product lineup with an easy buying process can go a long way in increasing an insurer’s favorability rating.

• Consider a new messaging strategy – the health industry’s transition is a great time to consider resetting the existing image. Great products and great service need great messaging.  What are the goals people are trying to achieve? What is it that truly motivates them? What is it that truly sets us apart and does it add value to our customers’ lives? Is there a need to have specific messages to specific groups of consumers? Think about the answers to these questions. Insurers in the end must be able to convince consumers that they are partners in this journey and are mutually dependent on each other’s success.

Amidst all the uncertainty insurers are facing, we believe that to mitigate the uncertainties of the reform landscape, insurers will have to go back to the drawing board, rethink how they look at the market, engage in product development and address the fundamental goals of their customers. Insurers must recognize and leverage core capabilities that others cannot replicate. Competitive advantages stem from not one but from a series of strategic decisions. The correct mix of product, distribution, message and market coupled with inherent operational strengths (e.g., knowledge of a local market, ability to underwrite at low costs,  relationships with existing customers) can set insurers apart from competition and pave the way to long term success.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice, when she gets the time she loves going to the beach with her two kids.