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AHA Trustee Magazine shines Spotlight on Retail Healthcare
Retail Renaissance
By Susan Meyers
Hospital gift shops are getting a facelift. Traditional auxiliary-run gift shops are reinventing themselves as booming retail operations providing hospitals with a new revenue stream to support their core services as well as a unique opportunity to continue serving patients’ healthcare needs after they leave the hospital.
The consumer is becoming a very powerful force in health care, and hospitals are just beginning to take that seriously, says Tony Paquin, president and CEO of Paquin Healthcare Companies Inc., a retail health care solutions group based in Celebration, Fla.
“There is a consumer-driven health care movement happening today,” he says.
“Health care is hitting all levels of retail. We have health care clinics in Wal-Marts, CVS drug stores and grocery store chains like Publix. We have health stores in health clubs and medical spas. Hospitals are realizing that they have to respond to these additional demands for health care products and services from the consumer, or [consumers] will seek them elsewhere.”
Paquin continues, “Offering health care products and services can extend the patient care continuum beyond the hospital and build an ongoing relationship with patients for the rest of their lives.”
Hospital gift shops are undergoing remodeling, moving into larger spaces and adding new products to appeal to patients, visitors and employees. And they are highly profitable. “These gift shops will outperform an [upscale department store] in a retail mall based on a per square foot basis,” says Paquin, whose company has consulted with more than 250 health care organizations to date.
Columbus Regional Healthcare System in Columbus, Ga., which sees foot traffic of more than 1 million customers each year, conducted a study several years ago that determined the hospital could better serve its patient, visitor and employee needs in a variety of retail areas. “It opened our eyes to the fact … that there were other ways we could provide products and services to assist our customers in the healing process,” says Tom Titus, senior vice president of Columbus Regional Healthcare System.
Columbus Regional responded by investing in a major remodel and expansion of its gift shop, opening a uniform shop for employees, a floral shop with full delivery service, a specialty cancer products store in the hospital’s cancer center and hiring a full-time retail services director to oversee all of these gift shop operations.
“Through our survey, we discovered that employees, who make up to 75 percent of our customers, were looking for gifts they could purchase for birthday parties, retirement parties and other celebrations,” says Sonny Adams, director of retail services at Columbus Regional. “So we added more upscale items like women’s purses, fragrances, lotions and skin care products as well as more packaged gift sets for new mothers and babies.”
The new stores and merchandise mix have been extremely successful. “It’s about providing convenience to our customers and developing relationships,” says Titus. “We need to find new and different ways to meet their needs, and convenience is one of them.”
Before the expansion, the gift shop was actually losing money, notes Titus. Since its expansion, the gift shop, in combination with the other stores, has recorded total sales of more than $1 million. Up to 30 percent of the profit is returned to the hospital to help fund other projects.
The auxiliary-owned gift shop is operated in conjunction with the retail director. Auxiliary volunteers work beside paid staff, which helps reduce staffing expenses while providing the retail savvy needed to improve sales and customer service, notes Titus.
Hiring a retail expert is critical to attaining early success, says Paquin. “Retail is a well-established science and business,” he says. “There is definitely a right way and a wrong way to do it.”
Titus says the hospital just launched an online retail store, which he expects to be equally, if not more, successful. “The online store will offer more health care-related products and will provide an avenue to test new products before introducing them to our campus stores,” says Titus.
While less than 1 percent of hospitals currently have e-commerce systems in place, Paquin says he expects that number to jump to more than 10 percent in the next two years. “Online retail can be extremely active,” he says. “We know that 75 percent of online users have searched for a health retail product in the last six months.”
Combining in-store and online retail with data collection and retail operations can be very strategic, says Paquin. “Then you can begin to have ongoing dialogues with your consumers and drive additional business to the core services of the hospital.”
For Heartland Regional Medical Center in St. Joseph, Mo., expansion of its retail operations is providing a competitive advantage by providing a more positive experience for its staff and customers, says Pat Dillon, director of retail services at Heartland Regional. “We are finding that the patient experience is playing a larger role in how patients choose hospitals. They expect you to be good at what you do, but if they have a good experience, too, that is an added plus.”
Expanded retail stores support the hospital’s mission to improve patient and employee satisfaction, to become the employer of choice in its community, and to promote wellness, notes Dillon. “Our board really feels good about this because it is allowing us to better meet the needs of our staff and customers,” says Dillon.
The hospital’s auxiliary-run gift shop now connects to a newly expanded store that provides a variety of convenience merchandise not offered in the main gift shop. This includes health care and wellness-related products, such as aroma-therapy products, relaxation music, books and vitamins; hard-to-find patient care products that support areas such as bariatrics, diabetes and outpatient physical therapy; hospital scrubs and logo apparel; and grab-and-go grocery items like bread, milk, juice, pizza and snack products.
Paquin says he expects patient care products to become a stronger focus and a valuable benefit to health care consumers, which can pay long-term dividends to hospitals wanting to retain customer loyalty. “If you don’t provide it, a less qualified source will,” he says. “It becomes a market differentiator.”
He continues, “This ensures consumers get the right product, most likely a better product, and improves compliance, which will result in a better outcome, and, at the same time, the hospital retains the revenue.”
Health care-related products are a primary focus of the retail health care business at NorthShore-LIJ Health System in New York. Because of the business’ success, the system has now developed its own health care brand—Vivo Health, which includes a large variety of health-related, fitness, beauty, mother-and-baby and other gift products.
Comprising 15 hospitals and 17 assisted living homes, the health system is converting its current gift shops into Vivo Health Marketplaces and has already launched its Vivo Health Marketplace online.
“We want our customers to view us as the provider of all of their health needs over their entire lifetime,” says Charles Trunz, president of North Shore Health Enterprises, the business development arm of the health system.
“North Shore-LIJ’s investment in retail health care solutions allows us to respond to the broader needs of the community, including offering more wellness programs and services,” says Michael Dowling, president and CEO of the North Shore-LIJ Health System.
“This new entrepreneurial entity will enable us to develop a viable new revenue stream that can help support our core programs, attract innovative partners and develop new concepts that will bring us to the forefront of this emerging business.”
Susan Meyers is a writer based in Omaha, Neb.
This article 1st appeared in the April 2009 issue of Trustee Magazine.
www.trusteemag.com
About Paquin Healthcare
Paquin Healthcare, the nation’s leading specialist in healthcare-based retail, is an alliance of industry leading experts and resources created to assist hospitals in the identification and implementation of healthcare retail and online commerce strategies. The company’s core mission is to increase revenue opportunities and minimize risks for healthcare organizations. As Medicare reimbursement rates continue to be pressured downward and expenses rise, new sources for non-reimbursed revenues are becoming essential to the financial viability of hospitals.
For more information, visit http://www.paquinhealthcare.com
Back to Press Releases >>
By Susan Meyers
Hospital gift shops are getting a facelift. Traditional auxiliary-run gift shops are reinventing themselves as booming retail operations providing hospitals with a new revenue stream to support their core services as well as a unique opportunity to continue serving patients’ healthcare needs after they leave the hospital.
The consumer is becoming a very powerful force in health care, and hospitals are just beginning to take that seriously, says Tony Paquin, president and CEO of Paquin Healthcare Companies Inc., a retail health care solutions group based in Celebration, Fla.
“There is a consumer-driven health care movement happening today,” he says.
“Health care is hitting all levels of retail. We have health care clinics in Wal-Marts, CVS drug stores and grocery store chains like Publix. We have health stores in health clubs and medical spas. Hospitals are realizing that they have to respond to these additional demands for health care products and services from the consumer, or [consumers] will seek them elsewhere.”
Paquin continues, “Offering health care products and services can extend the patient care continuum beyond the hospital and build an ongoing relationship with patients for the rest of their lives.”
Hospital gift shops are undergoing remodeling, moving into larger spaces and adding new products to appeal to patients, visitors and employees. And they are highly profitable. “These gift shops will outperform an [upscale department store] in a retail mall based on a per square foot basis,” says Paquin, whose company has consulted with more than 250 health care organizations to date.
Columbus Regional Healthcare System in Columbus, Ga., which sees foot traffic of more than 1 million customers each year, conducted a study several years ago that determined the hospital could better serve its patient, visitor and employee needs in a variety of retail areas. “It opened our eyes to the fact … that there were other ways we could provide products and services to assist our customers in the healing process,” says Tom Titus, senior vice president of Columbus Regional Healthcare System.
Columbus Regional responded by investing in a major remodel and expansion of its gift shop, opening a uniform shop for employees, a floral shop with full delivery service, a specialty cancer products store in the hospital’s cancer center and hiring a full-time retail services director to oversee all of these gift shop operations.
“Through our survey, we discovered that employees, who make up to 75 percent of our customers, were looking for gifts they could purchase for birthday parties, retirement parties and other celebrations,” says Sonny Adams, director of retail services at Columbus Regional. “So we added more upscale items like women’s purses, fragrances, lotions and skin care products as well as more packaged gift sets for new mothers and babies.”
The new stores and merchandise mix have been extremely successful. “It’s about providing convenience to our customers and developing relationships,” says Titus. “We need to find new and different ways to meet their needs, and convenience is one of them.”
Before the expansion, the gift shop was actually losing money, notes Titus. Since its expansion, the gift shop, in combination with the other stores, has recorded total sales of more than $1 million. Up to 30 percent of the profit is returned to the hospital to help fund other projects.
The auxiliary-owned gift shop is operated in conjunction with the retail director. Auxiliary volunteers work beside paid staff, which helps reduce staffing expenses while providing the retail savvy needed to improve sales and customer service, notes Titus.
Hiring a retail expert is critical to attaining early success, says Paquin. “Retail is a well-established science and business,” he says. “There is definitely a right way and a wrong way to do it.”
Titus says the hospital just launched an online retail store, which he expects to be equally, if not more, successful. “The online store will offer more health care-related products and will provide an avenue to test new products before introducing them to our campus stores,” says Titus.
While less than 1 percent of hospitals currently have e-commerce systems in place, Paquin says he expects that number to jump to more than 10 percent in the next two years. “Online retail can be extremely active,” he says. “We know that 75 percent of online users have searched for a health retail product in the last six months.”
Combining in-store and online retail with data collection and retail operations can be very strategic, says Paquin. “Then you can begin to have ongoing dialogues with your consumers and drive additional business to the core services of the hospital.”
For Heartland Regional Medical Center in St. Joseph, Mo., expansion of its retail operations is providing a competitive advantage by providing a more positive experience for its staff and customers, says Pat Dillon, director of retail services at Heartland Regional. “We are finding that the patient experience is playing a larger role in how patients choose hospitals. They expect you to be good at what you do, but if they have a good experience, too, that is an added plus.”
Expanded retail stores support the hospital’s mission to improve patient and employee satisfaction, to become the employer of choice in its community, and to promote wellness, notes Dillon. “Our board really feels good about this because it is allowing us to better meet the needs of our staff and customers,” says Dillon.
The hospital’s auxiliary-run gift shop now connects to a newly expanded store that provides a variety of convenience merchandise not offered in the main gift shop. This includes health care and wellness-related products, such as aroma-therapy products, relaxation music, books and vitamins; hard-to-find patient care products that support areas such as bariatrics, diabetes and outpatient physical therapy; hospital scrubs and logo apparel; and grab-and-go grocery items like bread, milk, juice, pizza and snack products.
Paquin says he expects patient care products to become a stronger focus and a valuable benefit to health care consumers, which can pay long-term dividends to hospitals wanting to retain customer loyalty. “If you don’t provide it, a less qualified source will,” he says. “It becomes a market differentiator.”
He continues, “This ensures consumers get the right product, most likely a better product, and improves compliance, which will result in a better outcome, and, at the same time, the hospital retains the revenue.”
Health care-related products are a primary focus of the retail health care business at NorthShore-LIJ Health System in New York. Because of the business’ success, the system has now developed its own health care brand—Vivo Health, which includes a large variety of health-related, fitness, beauty, mother-and-baby and other gift products.
Comprising 15 hospitals and 17 assisted living homes, the health system is converting its current gift shops into Vivo Health Marketplaces and has already launched its Vivo Health Marketplace online.
“We want our customers to view us as the provider of all of their health needs over their entire lifetime,” says Charles Trunz, president of North Shore Health Enterprises, the business development arm of the health system.
“North Shore-LIJ’s investment in retail health care solutions allows us to respond to the broader needs of the community, including offering more wellness programs and services,” says Michael Dowling, president and CEO of the North Shore-LIJ Health System.
“This new entrepreneurial entity will enable us to develop a viable new revenue stream that can help support our core programs, attract innovative partners and develop new concepts that will bring us to the forefront of this emerging business.”
Susan Meyers is a writer based in Omaha, Neb.
This article 1st appeared in the April 2009 issue of Trustee Magazine.
www.trusteemag.com
About Paquin Healthcare
Paquin Healthcare, the nation’s leading specialist in healthcare-based retail, is an alliance of industry leading experts and resources created to assist hospitals in the identification and implementation of healthcare retail and online commerce strategies. The company’s core mission is to increase revenue opportunities and minimize risks for healthcare organizations. As Medicare reimbursement rates continue to be pressured downward and expenses rise, new sources for non-reimbursed revenues are becoming essential to the financial viability of hospitals.
For more information, visit http://www.paquinhealthcare.com
Back to Press Releases >>
ARCHIVES
The Retail Healthcare Revolution
The Definitive Book on Consumer Issues in Healthcare by Tony Paquin.
Now available on Amazon.com
The Definitive Book on Consumer Issues in Healthcare by Tony Paquin.
Now available on Amazon.com
Ranked #291
Paquin Healthcare Companies earned the position of #291 on the 2009 Inc. 500, the
fastest-growing private Companies in America.
Paquin Healthcare Companies earned the position of #291 on the 2009 Inc. 500, the
fastest-growing private Companies in America.
2009 Winner
Paquin Healthcare
was named winner of the 2009 eHealthcare Leadership Awards.
Paquin Healthcare
was named winner of the 2009 eHealthcare Leadership Awards.