Becker's Hospital Review

120 Strategy Reports have long persisted that Amazon would launch a bricks-and-mor- tar presence. According to analysts, having physical stores would help Ama- zon create a stronger connection with customers, reduce shipping costs, compete with big-box stores and compete with retailers that are successfully integrating the in-store and online experience. With only 6.7 percent of re- tail purchases being made through e-commerce, bricks and mortar would seem an important channel for a company whose goal has been character- ized as having all retail purchases flow "through one pipe called Amazon." Amazon's store strategy would no doubt be very different from RadioShack's. Reports have suggested that an Amazon store would sell products such as Kindle e-readers; be a facility for product pickup, exchanges and returns; and act as a small warehouse to allow same-day delivery within the area of the store. Yet, Amazon would share many of the same risks as any retailer, with some additional ones thrown in. Like any retailer, Amazon needs to ensure that its in-store products keep pace with consumers' changing buying patterns. Amazon would need to determine the most effective way to integrate the online and in-store shopping and find the right mix of its physical and virtual assets. In this regard, Amazon would be facing competitors such as Macy's, Wal-Mart and Home Depot that have made huge strides balancing in-store and online offerings. In addition, Amazon does not have experience managing the costs, operations or customer experience of physical stores. Amazon's online success does not guarantee store-based success. When Amazon has ventured beyond online selling, its track record has been mixed. The Kindle reader platform revolutionized books, but the Amazon Fire Phone is now selling for 99 cents. Amazon has been willing to spend large amounts on experiments and walk away when the results were not good. That culture of experimentation could well extend into its physical store strategy. New decisions for healthcare providers As more healthcare purchases are driven by consumer choice, providers are becoming vulnerable to the same forces affecting retailers like Ra- dioShack and Amazon, and are facing the same complex strategic ques- tions. Like RadioShack and Amazon, providers need to determine what types of facilities to have and what to offer within them. Community-based healthcare sites could be limited in size and offer a single service, such as urgent care or physical therapy. Or they could be larger, offering multiple services such as specialty care, surgery and diagnostics at various degrees of comprehensiveness. In medical centers, too, executives need to deter- mine the right mix of services, number of inpatient beds, and role as a community, regional or even national entity. Equally challenging, execu- tives need to determine how many of each type of facility to have, and where they should be located. Healthcare providers also need to develop and configure their virtual of- ferings. At its most basic, online and mobile interaction can be used to schedule an appointment, send/receive reminders, communicate test re- sults and exchange messages with providers. However, the potential for virtual care to complement or replace traditional in-person healthcare services is large. Companies like Doctor on Demand and HealthTap use video apps to provide smartphone-based physician visits. Other smart- phone apps allow consumers to diagnose conditions from ear infections to skin cancer. Smartphones can also be used to take blood-pressure read- ings and do an electrocardiogram. Wearable wristwatch sensors are being developed that are the equivalent of "intensive care unit monitoring on your wrist," according to cardiologist and geneticist Eric Topol, allowing hospital rooms to be "replaced by our bedrooms." Kaiser Permanente Northern California forecasts that its number of virtual visits will surpass its number of in-person visits in 2018, fueled both by Kai- ser's well-developed virtual care platform and its capitated payment system. A report from information and analytics firm HIS suggests that telehealth revenue will grow from $240 million in 2014 to $1.9 billion in 2018. A Sales- force.com survey found that, among consumers ages 18-34, 73 percent are Y O U R B R I D G E T O For over 27 years, Fund Evaluation Group (FEG), LLC, has helped institutions develop sophisticated, globally diverse portfolios designed to enhance investment returns. 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