While they don’t yet represent a direct threat to traditional skilled nursing providers, several marquee retail brands have made significant bets on the senior care space as the population ages — with a specific focus on keeping seniors healthy and out of institutional settings.
Electronics retailer Best Buy’s (NYSE: BBY) recent moves into the senior health care space could eventually pay dividends in the form of $46 billion in long-term revenues, Morgan Stanley asserted in a new research report released this week — a staggering sum for a company that currently logs about $43 billion in annual revenues.
“We don’t think the market fully grasps Best Buy’s commitment to health,” the firm asserted.
Morgan Stanley pointed to the company’s recent acquisition spree, which saw Best Buy drop a total of $1 billion to pick up firms such as GreatCall — which markets senior-focused smartphones and wearable health devices — and Critical Signal Technologies, which develops remote products designed to allow seniors to age in place more safely.
That buying binge represents Best Buy’s attempt to capitalize on the overall trend toward preventative care for older Americans, Morgan Stanley’s research team wrote.
“In our view, Best Buy is assembling what could prove to be a formidable ecosystem focused on senior health, which it can use its nationwide footprint to scale over time,” Morgan Stanley observed. “Looking ahead, we believe Best Buy’s deeper push into health monitoring, related efforts to reduce medical expenses for insurers, and right to share in the cost savings represent a significant revenue and profit opportunity in the long term.”
Elsewhere on the retail health front, behemoths Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT) separately made a pair of moves that could portend a future of name-brand home care services.
Amazon this week launched a pilot version of a health platform called Amazon Care, which will provide both on-site and in-home health services to the online retail giant’s employees and their dependents. Though the program is currently only available in Amazon’s home city of Seattle and its surroundings, the company has indicated that it’s open to expanding its reach based on the results of the pilot — and Amazon has been rumored to be considering a hospital-to-home transition partnership with a startup since last year.
Walmart, meanwhile, joined forces with home health heavyweight Amedisys Inc. (NYSE: AMED) as part of its overall Walmart Health initiative, SNN’s sister site Home Health Care News initially reported last week. Like Amazon’s foray into home care, it’s limited — Walmart currently only has a single health clinic near one of its stores in Dallas, Ga. — but the growth potential is significant given the retailer’s base of more than 4,700 stores nationwide.
“We are testing a variety of services with partners in our Walmart Health prototype in Dallas, Georgia,” a Walmart spokesperson told Home Health Care News. “Among them is home health, hospice, and personal care, so if a customer has questions or needs information, they can discuss with the on-site partner, Amedisys.”
The prototype location reportedly features an Amedisys-branded kiosk that shoppers can use to learn more information about the company’s home health services, and the provider has already earned a spot as one of Walmart’s care coordination partners — along with preferred-provider status.
Of course, these moves to inject a retail sensibility into health care represent first steps, and don’t necessarily register as critical competition for institutional care operators.
But the news shows that big business is paying attention to the federal government’s efforts to shift more care into the home setting — whether it’s through new payment models or expanded Medicare Advantage coverage of non-health services, such as meal delivery and transportation. And with billions of dollars at stake as the baby-boom generation ages, these firms are unlikely to be alone in their desire to capture larger and larger swaths of the health care continuum.
