As Best Buy extends its reach into health technologies and services, a unique opportunity may open up for providers.
Best Buy’s move into dedicated health technologies and services represents an opportunity for health providers to partner with retail and technology/services companies, according to industry watchers.
The multinational consumer electronics retailer is stepping up its entrance into the senior-focused healthcare space. Back in August 2018, it bought GreatCall, which provides connected health and personal emergency response services to help older adults live independently. Its suite of products includes Jitterbug smartphones, wearables, and passive home-monitoring. The partnership reportedly will allow access to health plans, long-term care insurers, and senior housing operators.
Best Buy plans to open a third GreatCall “caring center” in October in San Antonio that will house urgent response agents that provide round-the-clock technical phone support and general concierge services to customers and subscribers. The retailer also recently purchased Critical Signal Technologies (CST), a health services company with an innovative approach to remote patient monitoring.
Rather than be “on watch,” healthcare execs should learn from Best Buy’s example of what out-of-the-box strategic thinking looks like, according to Michael Abrams, managing partner of Numerof & Associates, a healthcare consulting firm.
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“This is a moment in healthcare that presents huge opportunities,” Abrams says. “Non-traditional players like Amazon, Google, Apple, and Best Buy are all looking for their piece of a trillion-dollar healthcare market with a 30-year history that increasingly leaves consumers and employers dissatisfied with what they pay and what they get. Health execs should see the opportunity here-to profit from out-of-the-box-thinking, to provide a service that will create value, to leverage and humanize technology to improve and differentiate their product.”
Best Buy’s move is representative of how companies will change and adapt to better serve a growing opportunity in the home, according to Matt Fairhurst, CEO and co-founder of Skedulo, a mobile workforce management platform for in-home healthcare companies with offices in Brisbane, Sydney, San Francisco, and HoChiMinh City.
“Positioning themselves as a go-to supplier of these technologies make sense as more and more care and health services are delivered in the home, and the aging population gradually becomes more comfortable with how technology can support their home lives. It will become increasingly more important for healthcare companies to drive seamless engagement between the individual patient at home, the technology they use, and the healthcare services they need. As the population ages, the intersection between tech and human services will only become more a part of the home care conversation.”
A growing category
Senior care is a growing category that has a low risk of shrinking, according to Fairhurst.
“As providers adopt technology to provide seamless, connected, and automated operational models, they can certainly deliver personalized care at scale and profitably,” he says. “Companies that are slow to adopt better operating models and technology to support growth will struggle to meet the demands of care continuity, personalization, and customer service, and likely risk poor retention levels in staff and care workers as they deepen their preference to work with highly engaged, technology-forward organizations.”
Abrams shares a similar viewpoint. “The 65+ segment includes over 50 million consumers, and is expected to grow 50% over the next 20 years,” he says. “The range of services that this segment could use, and the possibilities afforded by technology to improve the customer experience, the quality of care, and to lower costs is extraordinary. The senior health space is an exceptional place to be and the time is now.”
There’s only one caveat, however, Abrams explains. “Health execs looking for a safe template-a plan of action that has been tried over and over by others-will likely miss the opportunity. Every organization comes with its own unique capabilities, and every geography its own needs. The path to success requires careful planning, testing, and execution, and a willingness to take calculated strategic bets.”
Tech to support seniors
Best Buy’s acquisitions of both the technology to support aging populations represent another leading trend in the space, according to experts.
Subscription-based technology is a huge area of investment right now in M&A because of the recurring revenue component, and Best Buy is tapping into that wave, according to Brad Haller, director in West Monroe Partners’ M&A practice, a business and tech consulting firm with offices in Chicago, Seattle, San Francisco, Minneapolis, and New York, among others.
“As a retailer, Best Buy's relationship with the customer has been traditionally limited to the research and transaction phase of buying in-home technology, focusing less on ‘after the purchase’ engagement,” Haller says. “Since home tech transactions have largely moved online, Best Buy is looking to replace that channel and expand into long-term customer engagement through subscription services. What better place to do that than healthcare technology?”
In fact, digital health and healthcare IT companies are the No. 1 sub-sector that hold the most interest in healthcare M&A, according to a study West Monroe did last year.
“Homecare services came in at No. 3. When you combine the two, you could say that Best Buy is headed in the right direction,” Haller says. “The demographic needs of healthcare are shifting toward the home-based setting-this is where the M&A money is headed, so this is where we see corporate investment is headed. The growth trajectory is high. Essentially, what Best Buy is doing is combining what it knows best-in-home technology-with a growing audience and sector, and leveraging a subscription model to move from transactional purchases to recurring revenue.”
That technology alone is not the answer to serving and caring for individuals in the home, Fairhurst says. “The human-oriented nature of Geek Squad can extend to its concierge and assisted living services, something we're seeing already with Best Buy’s development of GreatCall call centers,” he says.
Tracey Walker is content manager for Managed Healthcare Executive.