Your hospital is already in the retail business whether or not you know it.
With hospitals perpetually in a budget crunch, the opportunity to increase revenues by providing additional convenience to customers through retail medical services is growing more attractive all the time. An executive with the Paquin Group, at www.pacquinhealthcare.com, a health care retail consulting firm based Coeur d’Alene, Idaho, observes, “the average hospital that makes $500,000 annually from retail sales such as gift and coffee shops has the potential of 5 million to 15 million annually” by offering retail medicine.
Some of the services and specialty stores showing up in hospitals as independent firms that pay the hospital rent or as part of the hospital’s own operations include optical shops, pharmacies, health food markets, baby photography services, dental and orthodontic practices, contact lens stores, art and dance studios, prosthetic services, acupuncture, chiropractic, and massage services, cosmetic surgery centers, aromatherapy service shops, specialty cosmetic centers, health book stores, weight loss classes, specialty cancer shops (wigs, scarves, etc), smoking cessation courses, and gourmet food shops, among others.
The key to effective on-site retail sales is a keen focus on the consumer. How your stores are designed and arranged, along with the knowledge of the employees who staff, are the critical elements in a consumer’s inclination to pay for retail goods and services associated with your hospital.
Some hospitals have devised their own branded vitamin supplements and some have created a variety of retail notions to sell in their gift shop. For further exploration as to how your hospital might add retail business revenue, here are some resources:
- www.redlandshospitalstore.com – How a hospital is offering their store’s products online.
- www.hospitalbusinessdevelopment.com – How hospitals are increasing retail revenues.
- Beyond the Gift Shop: Boost Revenue, Your Brand, and Patient Satisfaction with Strategic Hospital Retail by Mindy Thompson-Banko, published by the American Congress of Healthcare Executives, Chicago, IL.
Providing Medical Equipment and Supplies
Another alternative in retail medicine beyond establishing or affiliating with walk-in clinics or populating your facility with retail medical, is the provision of medical equipment and medical supplies.
Thus far in the evolution of U.S. health care, hospitals have played little or no part in providing needed equipment to patients for purposes of follow-up care. Drugstores sell such equipment as do wholesale medical suppliers and specialty retail suppliers. Increasingly, online vendors are capturing a sizable share of the market. In addition, resale of used equipment in good to excellent condition or refurbished equipment has been a growth sector, particularly with the advent of online sales.
Med Marketplace, online at www.medmarketplace.com, bills itself as the world’s “largest online marketplace for selling medical equipment.” Visitors to the site type in a product or keyword, the desired condition, and the desired location. They then receive a comprehensive list of what is available based on the criteria they have selected.
While hospitals have long sold their used equipment to brokers who then resell it at a profit, the ability today for hospitals to sell new equipment directly to patients and to sell their own used equipment facilitated by the Web has never been greater.
Implications for Your Hospital – Consider the annual number of patients that you treat, and the annual total of patient visits.
- What percentage require some type of equipment or medical supplies for follow-up treatment?
- What is the typical expenditure by patients who need to make such outlays?
- What is the total annual estimated outlay of the followup expenditures made by your patient population?
- What percentage of that revenue total could you potentially capture by entering this arena?
Long-term traditions, local restrictions, and other factors must be considered and handled adroitly before sales of new and used medical equipment and supplies can become a profit center. Still, the potential is intriguing and, in this era of hyper-competition, is not one to be overlooked.
To summarize: Your hospital is already in the retail business and other lucrative opportunities abound. What can you do to affiliate with retail operations at arm’s length or to or accommodate them within your own facilities?