Best Buy's digital health ambition could be a prescription for a disruptive growth opportunity
Best Buy’s digital health ambition could be a prescription for a disruptive growth opportunity
Tue, 10/01/2019 – 03:50
- Best Buy wants to help disrupt the US healthcare service provision market with a digital play that’s hugely ambitious.
Best Buyâ€™s new CEO Corie Barry has only been in the top slot at the US retailer for just over three months, but she’s about to oversee one of the most ambitious strategic pushes the firm has ever undertaken in the form of a digital healthcare play.Â
Barry, who was previously Chief Strategic Transformation Officer with responsibility for digital at the firm, wants a slice of the USÂ Â digital healthcare tech sector, currently a $50 billion a year market opportunity in the US, according to Best Buyâ€™s estimates. So alongside selling laptops and cell phones and all the consumer tech thatâ€™s traditional for Best Buy, the firm will also offer digital health monitoring equipment and services.
Barry argues that Best Buy is well-positioned through its consumer tech origins to commercialise disruptive health tech in a way that rivals, such as specialist providers or the likes of Walmart, cannot:
As digital health devices reach a point where they offer distinct, but somewhat narrow benefits, we are starting to see groundbreaking ways in which technology can readily and broadly benefit peopleâ€™s health even more so in their homes. Everyday, new innovations are creating new ways to work out with 1,000 other people in your basements, ways to monitor your babyâ€™s heart rate and oxygen levels through a sock on their foot and the ability to take care of your loved one in their home.
But this sort of innovation can be overwhelming, she suggests, which is where Best Buyâ€™s consumer electronicsÂ track record Â comes into play:
According to Kantarâ€™s US Monitor survey from 2018, 50% of customers indicate being overwhelmed by the amount of technology in the world today. While technology products are often seen as simple, when you take them out of the box, making them work together on entirely different operating systems can actually be relatively difficult. Adding new products or features is tricky, particularly given that no home works on a single operating system. Our customers purchase across brands and ecosystems. Think of it this way, the number one operating system for TVs is often the manufacturer, the number one in voice is Amazon, the number one operating system in tablets is iOS, the number one for mobile phones, Android and the number one computing system is Windows. We stand alone as the only place for customers to go to navigate this landscape and the only brand that can support this level of complexity.
Think of us as the Chief Technology Officer for your home.
The theory is that this will be mirrored in the health sector as digital tools expand their footprint and people assume more responsibility for managing large parts of their own healthcare programs. Asheesh Saksena, President of Best Buy Health, pitches the strategy as one that provides digital solutions for â€œan eternal, ever-lasting human needâ€�. He argues:
Today if Iâ€™m sick, I have to go to a doctor or to a hospital or to an ER, and thatâ€™s the last thing I actually want to do. Iâ€™m sick, I want to be in the bed at home, except healthcare does not transact in the home. We thought we could do something about that. We could bring technology-based solutions in the home and help connect the home to the world of the healthcare system.
We could install, we could support, we could train, we could calibrate all these technologies in the home simply because we have Geek Squad, one of the largest distributed tech workforces in the country. We could also leverage our other in-home resources. In-Home Advisors could go in, and drop in and check on, and so on and so forth. In other words, we could do our part in making home a node in the care architecture, and that is something every major health entity is looking for.
Saksena adds that the US has an ageing population that needs a different approach to healthcare that digital tech can support:
People are getting increasingly more involved in managing their own health and the health of their loved ones, specifically when it comes to seniors, moms, dads, grand moms, there are caregivers like me..More than half of them are not only taking care of the seniors and finding it difficult or stressful, have full-time jobs and spending more than 15 hours a week taking care of their loved one. Thereâ€™s clearly a need for solutions that can help people take care of their loved onesâ€™ health needs in a more holistic fashion.
The final factor to be taken into account is the disruption in the US healthcare system itself:
While home and seniors are important, what is also equally important to understand is that the healthcare itself is going through a business model transformation from a volume-based healthcare business model, where every x-ray was being paid for, every night in the hospital was being paid for, to a value-based model, where there is a set of dollars for a particular condition or a set of dollars for technology innovations that can take out cost and take out wastage from sectors that are consuming incredible healthcare dollars, like seniors.
He provides an example of this in practice by noting that doctors tend only to see seniors when there has been an incident:
The problem is that between those events or between those episodes is where there is daily life. This is where a lotâ€™s happening that impacts the healthcare of the senior. Did Mom take medicines in time? Did Dad go for that walk that is so important for his healing? Is Grandma lonely? These are all things that happen between those episodic events, and thatâ€™s why the healthcare industry is extremely keen to get visibility on this everyday life between these episodic events. And it is no surprise, therefore, technology is like remote monitoring are absolutely central capability to enable senior living.
So, a probable scenario would involve Best Buyâ€™s tech teams installing sensors in the home to gather data against which â€œtriage protocolsâ€� can be run. If that works and scales, the opportunity is there to become what Saksena calls â€œthe nationâ€™s leading remote monitoring platformâ€�.
Best Buy has been preparing for this digital health play for some time, executing a couple of acquisitions to bolster their market credentials in this space. First up was a remote monitoring firm called GreatCall, followed by a care co-ordination outfit called Critical Signals Technologies and predictive tech firm BioSensics.
Itâ€™s early days, Saksena concedes, but adds that there some encouraging signs of interest from healthcare providers, citing Anthem, Centene and Molina as companies that are bundling Best Buy Health as part of their insurance plans. Itâ€™s still small potatoes, but the opportunity is there to scale, he concludes:
What we are very aware of that if all goes well, there will be five million seniors, five million seniors like my Dad, perhaps like somebody you care for, who would be living longer in their homes, living more independently, supported by Best Buy Health.
As a child of the â€˜free at the point of contactâ€™ NHS in the UK, Iâ€™ve struggled with the US healthcare market whenever Iâ€™ve had cause to have contact with it. However the ageing population and the demands it places on healthcare provision is not unique to the US and solutions need to be found to address what is likely to be an increasingly heavy burden.
The Best Buy gambit here is fascinating – taking a strong reputation for in-home consumer technical support and translating that to a digitally-disrupted sector in which it has no track record. If youâ€™d pitched Best Buyâ€™s digital health ambitions as an idea, Iâ€™d have assumed weâ€™d be talking more about Fitbits and Apple Watches.
From â€˜home CTOâ€™ to â€˜home Dr Digitalâ€™ is a clever idea and if it scales, itâ€™s a huge commercial opportunity. The trick is going to be in getting buy-in from insurance providers, which ought to be drawn to the â€˜prevention, not cureâ€™ angle to the kind of predictive, AI-enabled tech that Best Buy is pitching.
That said, there will be stiff competition from other retailers with strong digital credentials. Walmart has ambitions here, while Amazon is running a pilot for its Amazon Care health platform and services. Overall, this has the makings of major new battleground for digital retail and will be a space to monitor, so to speak, over the next few years.
Image credit – Best Buy