Going Retail – Women’s Centers Are Embracing It!
Louise Niekerk, RN & Richard Ireland

There is a paradigm shift taking place in health care, from a focus on cost_cutting to a revenue emphasis, seeking to satisfy needs with differentiated, value_added products and services. According to Gothberg (1999) writing in the Strategic Health Care Marketing, the out_of_pocket market for health and wellness reached 18 percent of total spending in 1995, exceeding spending on Medicare (17%) and, factoring for just inflation, should hit $228 billion in 1999. Fueling this huge market are consumerism, today's better educated and wealthier households, technology like the Internet, and changing employer and health insurance payment systems.

To be successful at retail, some attitudes will have to change. Doctors and healthcare institutions often have the view that they must be the cheapest. Instead, they must ask themselves, "How do I add value and charge for it?" When thinking about new value_added ideas, consider the following: What should be expanded (longer or special doctor visits, for example), what can be eliminated (filling out forms just once, billing consolidation), what can be substituted (exchange time with doctor vs. nurse), and what can be combined (special packages of services). Even small additions in tangible value can produce significant margin gains.

The retail movement in health care is gaining momentum. Hospitals are looking for ways to tap into the more than $200 billion that consumers spend each year on health_related products and services. Health Forum Journal reports that healthcare organizations are acknowledging that individuals are absorbing a greater share of their own healthcare costs, particularly for prevention_ and wellness_related products and services.

Spending by individuals is significant; rising incomes, chronic care needs, and the boomers' concerns indicate that more money will be spent in the future. What hospitals are finding is that they can often generate additional revenues through new retail services which complement their organization's other products, programs and services.

What do we really mean by retail? A place, an idea, an extension of clinical services, a way to add value to a patients experience, an opportunity for additional revenue?

Going retail means buying health and health related products at wholesale and selling them in a store or store-like setting for a profit. "Yet the healthcare retail revolution is much more than opening a store at a shopping center. Healthcare’s version of retail done not equate to a place; it equates to conducting transactions direct to the consumer for some exchange of money. The retail revolution is about understanding one very important concept that has almost forgotten in healthcare -- customers will pay more for products and services that meet their specific needs and add value to their live (Swan, 1998)."

Actually, retailing is really nothing new for hospitals. After all, there is the gift shop, the pharmacy, the coffee shop, and often, a home health/durable equipment operation, all retail sites. And all have the potential of contributing to the organization’s knowledge-base. However, hospitals have been slow at realizing the potential of retailing.

So, given that women are the primary decision makers, it makes good sense that a retail operation begin with your women’s health program. Many retail operations have grown out of obstetrics with the need for lactation supplies and cancer programs with the need for wigs, special clothing, and prosthesis products.

For Beth Allen, Manager of A Woman’s Place: A Specialty Boutique for Wmen’s Healthcare Products and Services at Northside Hospital in Atlanta (Laughlin 2000), retail is indeed a core strategy for their women’s center. Its mission is "to provide a full range of high quality, affordable healthcare products and services designed to enhance a woman’s medical, physical, and psychosocial quality of life." Located in the lobby of Northside’s new women’s center expansion, this 2100 square foot store offers a comprehensive array of products and services for women. It is viewed an effective way to add real value to a woman’s experience at Northside. Allen offers the following points for developing a retail boutique:

     Why a Woman’s Health Boutique?

• Markets comprehensive services
• Targets your key customer
• Exemplifies customer service
• Generates and facilitates loyalty
• Exhibits product leadership
• Promotes customer intimacy
• Communicates prevention and intervention

A retail operation not only creates a revenue opportunity but, more importantly, it also adds real value to the patients experience and is therefore a natural extension of your service line. It can also act as an extension of the physicians office.

A few good examples of retailing in women’s health are:

Greater Baltimore Medical Center-- The Boutique at GBMC & The Parent Connection store (www.gbmc.org/services)

The MommyMarket at Hendrick Health System (www.abilene.com/hmc/services/mommy.html)

The Woman’s Touch Boutique at Woman’s Hospital of Baton Rouge (www.womans.com/birthplace/boutique.htm)

Sentara Health System Women’s Services -- Marketplace (www.

A good example of the successful retailing of health care on a broader scale is Samaritan North Health Center in affluent Englewood, Ohio, (Menninger 1999) which ranks among the largest and most successful ambulatory care centers in the country. Instead of a major facility renovation of its central_city hospital, this hospital opted to build a freestanding medical mall deep in the suburbs and bundle virtually all of its ambulatory services at the new site. The facility includes such services as diagnostic testing, sports medicine and rehabilitation, cancer care, urgent care and outpatient surgery. Thanks to the medical mall, Samaritan's share of revenue generated from outpatient services has nearly doubled from 18 percent in 1990 to 35 percent today. The mall itself is producing annual revenues of $33 million, with operating profits of 10 percent. Patient satisfaction numbers are off the charts. The success of Samaritan North represents one of the most successful examples of the way in which health systems _ beset by competition and under relentless pressure to reduce costs _ are turning to lessons learned in the retail and service sectors in order to reinvent and recapture the delivery of health care. Indeed, some experts believe the arrival of medical malls marks the vanguard of a revolution in healthcare delivery that's driven by the harried American consumer's unyielding demand for convenience. Healthcare Business quotes Regina Herzlinger, a professor of business administration at Harvard School of Business who specializes in health care as saying, "When people complain about the inconvenience of health care, they note three problems: the location, the hours and the fragmented way in which it is delivered." "In most cases, consumers' need for convenience is not acknowledged in health care, but these medical malls represent one early response."

Available evidence suggests that the prevalence of medical malls is increasing nationwide. This new consumer focus is reflected in convenient suburban locations featuring central glass atriums replete with waterfalls. Patients progress through the healthcare system designed around the experience of the patient, as opposed to around healthcare functions. Healthcare Business notes ways that health centers can bundle their services in response to consumer demand for convenience by offering a wide variety of services in a medical mall:

    * Ambulatory surgery center
    * Diagnostic center
    * Rehabilitation clinic
    * Primary care and specialist physician offices
    * Pharmacy
    * Fitness center
    * Cancer care center
    * Sports therapy center
    * Durable medical equipment provider
    * Vision center
    * A health resource library (often targeted to women and their families)
    * Meditation and yoga classes
    * Healthy cooking classes

In The Healthcare Strategist, Goldman and Corrigan (1997) discuss new approaches for business growth _ noting that successful healthcare leaders will "think retail." They point out that the historic orientation of facility_based healthcare providers and their understanding of distribution systems for healthcare dollars has been focused on large_scale (wholesale) buyers: the federal government (Medicare), state and local governments (Medicaid), insurance companies, and more recently, managed care organizations. This focus has increased, often narrowing onto a handful of payers. Providers have negotiated with payers using price as the predominant tool to secure business. However, aspects of value, other than price, must be addressed and used to differentiate one provider from another. Executives must "think retail" about their business. Ultimately, success will be dependent on the satisfaction of the consumer. The inability to get appointments, long waits for service, arrogant professionals, surly staff, and other aspects of bad customer service will cause the loss of business among even the cheapest of health plan offerings.

Goldman and Corrigan outline three retail strategies for developing revenue opportunities. While classic growth strategies _ market penetration, product development, market development, and diversification _ provide a useful framework for developing and evaluating opportunities for corporate, the need to grow revenues from alternative sources will become paramount. Retailers employ three basic strategies to maximize satisfaction and create loyalty:

* Enhancing the customer's experience.

Understand the service interaction from the customer's point of view. Create an environment in which other basic comfort, convenience, safety, entertainment, and information needs are anticipated and addressed. Atmospherics (d1cor, displays, signage, customer amenities, selling techniques and customer service) are attended to with excruciating detail by benchmark organizations.

* Meeting the customer's related needs.

Offer and display related products or services to stimulate additional spending, thus boosting revenue and increasing customer satisfaction. An example would be locating a storefront on the obstetrics unit stocked with everything from diapers to disposable cameras to self_help books for new parents.

* Product and market diversification.

Market segmentation strategies are increasingly used by retailers to identify unmet needs and create new markets. For example, what kind of healthcare service is available for adolescents who feel they're too old to go to a pediatrician and too cool to go to their parents' general practitioners?

Says Steven Hillestad of the MedTrend Group, "The Old World is hospitals, doctors, urgent care, home care. The New World is e_tailing, catalog sales, franchises, direct sales, medical malls, retail boutiques, focused factories, turnkey distributors, integrated clinics."

Of course we know that establishing a boutique in a women’s health center is not a new concept. And those boutiques are invaluable to their female patients undergoing radiation therapy, chemotherapy, plastic surgery, as well as any other patients, their families, friends and never underestimate the interest employees have. Boutiques have found their hospital employees to be great customers and they also get the word out! Some boutiques evolved in order to fill the needs of the female cancer patient. Others grew out of the needs of breastfeeding moms. Now many incorporate the products and services needed by the majority of female patients.

Get creative – think out of the box. How about a skin specialist, a full_time make_up artist, and an esthetician for facials? The boutique could have several complete skin care lines including corrective cosmetics and a full range of hair care products and brushes. For customers with special hair care needs, they could be offered treatment shampoos and conditioners, wigs, turbans, hats and scarves. A certified fitter for breast prosthesis should be available on_site for the convenience of customers. Offer a wide range of products – aroma_therapy candles, creams, bath oils, men's products, relaxation tapes, night_wear and undergarments. Remember trained sales staff and attractive displays are crucial. Offer helpful services. Would a manicure during a chemotherapy infusion be appreciated? How about a haircut while waiting for an appointment? Survey your target markets and ask them what they would like and use. Get your support groups and focus groups responding.

Women’s health centers are dedicated to the special needs of women with promotion of an overall healthy lifestyle as their mission. Are you tied into a fitness center in town or in rehab or are you fortunate enough to have your own equipment? Can women get personal attention from certified fitness instructors? Although exercise is a magic bullet, still too many of us shy away from it. Exercise is such an important key to feeling and looking better. Is on-site childcare available? Is massage therapy offered? And don’t neglect the formation of support groups because they are so helpful in providing emotional support and information women need.

And finally, be sure that your women’s health center complements and promotes your boutique and vice versa.

References

Bufe, Mary. "Going Retail." Health Forum Journal, September/October 1999.

Goldman, Ellen F. & Karen V. Corrigan. "Thinking Retail in Healthcare: New Approaches for Business Growth." The Healthcare Strategist, November, 1997.

Gothberg, Mark S. Retail Health Care: "Capturing the Growing Out-of-Pocket Consumer Market." Strategic Health Care Marketing, 1999.

Laughlin, Michael. "The Collective Image: A Retail Extension of the Women’s Health Service Line." The Ireland Report on Succeeding in Women’s Health, May/June 1998.

Laughlin, Michael. "Retail Vital to Northside’s Care Matrix." The Ireland Report on Succeeding in Women’s Health, March/April 2000.

Menninger, Bonar. "The Retailing of Healthcare." Healthcare Business, July/August 1999.

"The Highland Center for Women: One-Stop Shopping Takes on a New Dimension with Retail Operation as the Centerpiece." The Ireland Report on Succeeding in Women’s Health, January/February 1999.

Retailing: Image Centers/Boutiques for Cancer Patients and Much More. Q & A Interview. The The Ireland Report on Succeeding in Women’s Health, May/June 2000.

Swan, Maureen M. The Retail Revolution. The Alliance Report: Strategies for the Healthcare Marketplace, September 1998.

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Louise Niekerk is a staff writer for The Ireland Report and Richard Ireland is President, The Ireland Corporation/The Snowmass Institute, Centennial Colorado.

© The Ireland Report on Succeeding in Women’s Health, 2001. All Rights Reserved

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