Health care is changing. Are you?
The full implementation of the 2010 Patient Protection and Affordable Care Act (AKA ObamaCare or ACA) is set for 2014. Insurance companies, hospital systems, doctors’ groups and related health care stakeholders, including chain-store pharmacies and even conventional supermarkets, are scrambling for position in this new world of expanded coverage for millions more Americans. One of the largest changes is state-based health insurance “exchanges,” which will provide consumers a marketplace to shop for health insurance. Fewer than half the states have decided to participate, with more than half leaving it to the feds to run their state exchanges for them. It is an open question how all this will work.
Nevertheless, ACA is the law of the land, and we are moving forward. What is your role? If you are like many—perhaps most—independent natural products retailers, you may feel your job is to serve as a counterpoint to the dominant medical system; your store is an oasis of sanity in a crazy, over-medicated world. There is some truth to this. At the same time, you are part of the health care system in this country, so giving some thought to the changes now taking place may help you better position your store to capture a greater share of health care dollars as our society adjusts to its new health care reality.
As I think about all these changes, two major factors stand out.
First, as many predicted, when you dramatically raise the number of insureds demanding attention, but do nothing to increase the supply of providers, access to health care will shrink. We see this happening with the arrangements insurers are making with hospital systems and health care organizations. In exchange for discounts from these providers, insurers will funnel new patient flows to only these preferred providers. To keep costs down, insurers will limit choices of care providers that patients can see. “If you like the insurance you have now, you can keep. . .” Oh, never mind.
The second major new factor is, as a result of health care demand far outstripping supply, responsibility for primary medical care will get pushed further down the health care food chain. For example, some states are considering allowing nurses to administer anesthesia; some pharmacies are facilitating 10-minute patient–doctor live video conferences, with the MD writing a prescription remotely after this brief interview. Some pharmacies, and even some conventional supermarkets, will have health clinics that administer care for minor chronic illnesses through nurses overseen by an MD who may not even be physically on-site.
There is a truism at work here. In health care, you can have access, price or quality; pick any two. Think about it: if you want low prices with high quality, you won’t have much access to those quality providers. If you want good access to high quality, you’ll pay a premium for that level of service. If you want good access with low prices, you’ll have to sacrifice the quality of care. And this is exactly what is happening.
In its efforts to control health care spending (price) while increasing the demand for health care services, our new federally mandated system is forcing quality out of the equation, which brings us to the opportunity I see for independent natural products retailers.
For years, I have said that the most successful retailers will be those who make quality a fundamental part of their business models. This includes not only ingredient standards, but service levels as well. Those retailers who afford knowledgeable staff; people with “letters after their name,” such as certified nutritionists, naturopathic practitioners, registered nurses, and, yes, even MDs, set themselves apart from the competition. Most of your competitors won’t afford these highly qualified practitioners because it is not part of their business models and to avoid liability for swerving into the practice of medicine. In fact, careful retailers who engage the customer in a disciplined way can provide actionable information completely within the bounds of DSHEA (Dietary Supplement Health and Education Act) and state laws. In my view, with the advent of the ACA, the opportunity has never been greater. WF
Jay Jacobowitz is president and founder of Retail Insights®, a professional consulting service for natural products retailers established in 1998, and creator of Natural Insights for Well Being®, a comprehensive marketing service designed especially for independent natural products retailers. With 36 years of wholesale and retail industry experience, Jay has assisted in developing over 1,000 successful natural products retail stores in the U.S. and abroad. Jay is a popular author, educator, and speaker, and is the merchandising editor of WholeFoods Magazine, for which he writes Merchandising Insights and Tip of the Month. Jay also serves the Natural Products Association in several capacities. He can be reached at (800)328-0855 or via e-mail at firstname.lastname@example.org.
Published in WholeFoods Magazine, April 2013