Rae Woods (00:00):
Hey there. It's Rae. Last week, we talked to Walgreens, a retail pharmacy, trying to shake up the healthcare industry and accelerate the path to value based care. But remember, retail doesn't necessarily mean retail pharmacy. So today, I wanted to revisit a conversation we had in the fall, where we talked about Best Buy, because believe it or not, they are betting on healthcare as their new growth strategy. I highly recommend you listen to this episode again, but when you get to the very end, we've added some new content. I sat back down with our research lead, Miriam, and she and I talk about what's changed about Best Buy strategy over the last nine months, and really what sets them apart from all the other disruptors we're tracking in healthcare. So, make sure you listen to this one all the way through.
From an Advisory Board, we are bringing you a radio advisory. My name is Rachel Woods. You can call me Rae. There has been a lot of talk, and frankly a lot of noise about potential disruption in healthcare, but today, I want to talk about a company that you might not be thinking about as the next great innovator in healthcare. I want to talk about Best Buy to do that. I've brought industry expert, Miriam Sznycer-Taub. Hey, Miriam.

Miriam Sznycer-Taub (01:30):
Hi, Rae.

Rae Woods (01:31):
Welcome back to Radio Advisory.

Miriam Sznycer-Taub (01:33):
Thanks. It's nice to be back here.

Rae Woods (01:36):
Okay. Semi-serious question to start with, do you actually shop at Best Buy?

Miriam Sznycer-Taub (01:41):
I do. We just bought a microwave from Best Buy like two weeks ago.

Rae Woods (01:44):
Really? Yeah. I'm full online order, I don't want to go into a store, arrive at my doorstep, I'm done.

Miriam Sznycer-Taub (01:53):
To be clear, we ordered the microwave and had it shipped to our house, but we ordered it from Best Buy.

Rae Woods (01:56):
Oh, interesting. Best Buy is actually making moves in the healthcare arena. I sort of can't believe that I just said that sentence, but I think it actually makes sense when we dig into some of their plays over the last couple of years. When did you start noticing though, that Best Buy was starting to pretty seriously get into the healthcare arena?

Miriam Sznycer-Taub (02:33):
Yeah, so Best Buy made their first, I would say real move, in 2018 actually. They bought a company called GreatCall. They've renamed it to Lively now. And GreatCall was a connected health company, so it basically sort of brought together this idea of tech and health kind of all in one place. And that was sort of Best Buy's first move in their healthcare ambition, and then they've slowly but surely made a couple of other smaller moves over the years, kind of placing themselves in the health conversation.

Rae Woods (03:02):
And Best Buy obviously sells technology directly to consumers, right? They sold you your microwave, but what's different about what Best Buy is doing compared to maybe other healthcare tech firms or other kind of retail companies.

Miriam Sznycer-Taub (03:17):
Yeah, I think a couple of things. So, I mean, for one, they sell to consumers, right? They sold me my microwave. I've bought a bunch of other things from them too. And what they've been selling is health technology to consumers, right? So when they bought GreatCall, now Lively, they are selling technology that people can use to keep them healthy in their homes, right? And a lot of it is aimed at seniors. So, it might be something that can help connect them to a doctor, get them a visit if they need one, connect to their loved ones, let someone know if they're experiencing a medical emergency, kind of all wrapped together in one phone or one device.

Rae Woods (03:55):
And I think what you just said is really, really important. It's all wrapped together in one device, because they're clearly targeting seniors. And my understanding is instead of selling this elderly person the classic life alert bracelet, a tablet to connect with their physician, pick your other suite of technologies, they're trying to sell one thing that serves all of the needs of that senior person. Is that correct?

Miriam Sznycer-Taub (04:22):
Yeah, exactly. So, they have a bunch of products, but I mean, there are two of their kind of big ones. One is actually a flip phone. So if you think back to maybe one of your first cell phones, it might have been a flip phone. They now sell a new flip phone that one of the buttons on it kind of immediately connects you to someone if you're experiencing a medical emergency, right? So, it's a flip phone, but upgraded to be a little bit friendlier for health purposes. They also have a smartphone. Their smartphone has buttons that are a little bit bigger, a little bit easier to use, again, sort of aimed at seniors, who at this point, many of them are very tech savvy, but also find it hard to navigate all the tiny buttons on maybe a more normal smartphone.

Rae Woods (05:03):
And that's again, because their core consumer are those baby boomers who maybe aren't as tech savvy. They are the folks who need something simple, whether it's a flip phone or a smartphone with fewer stuff and bigger buttons. And I'm guessing they're basically targeting the same type of person that would maybe need Best Buy's geek squad.

Miriam Sznycer-Taub (05:23):
Yeah, absolutely. And I think that's what makes them, again, a little bit different is they've had these years of experience in providing customer service and helping people use their technology, right? You could come in and you could make an appointment with the geek squad if you didn't know how to use your laptop, if you didn't know how to use the thing that you just bought. And they've sort of extended that idea to health, right? And so this idea that you can call someone, if you have a question and the geek squad for health, in this case, will help you out. That's how they've sort wrapped around their kind of traditional Best Buy consumer retailer into this health world. So, their consumer is a senior most likely, or someone who's elderly, but the customer, the person who's actually purchasing the tech might actually be that person's adult child, right? It's not necessarily the same person who's using it.

Rae Woods (06:08):
What do you mean by that?

Miriam Sznycer-Taub (06:09):
Yeah, so right now there's this whole idea of the sandwich generation. There are people who are caring for children. At the same time, they're caring for elderly parents or other elderly relatives. And those people might not live in the same place as them. And so there's this immense pressure that a lot of people feel to make sure that their parents or relatives can age in place safely and without loneliness, without isolation. And so this technology kind of gives them a little bit of peace of mind, because not only is it a phone, but it's got the ability for their parent to call and find someone who can help them get groceries. It allows them to be notified if their parent pushes that emergency alert button, "I need immediate medical help." So, it kind of gives them a little bit of peace of mind and helps them feel more comfortable with their aging parent living alone.

Rae Woods (07:00):
Because it sounds like the goal is a little bit more holistic than we would think about traditional healthcare. It's holistic in the sense of, we're going to try to link all of these different pieces of tech, and instead make it this simple kind of singular piece of technology. But it's also holistic because you can connect to a doctor or you can connect to somebody who can, I don't know, help you find groceries.

Miriam Sznycer-Taub (07:26):
Yeah, find groceries, get directions places. I think really, again, trying to make it simple. And it's all aimed again at people in their home, right? This isn't for people who are going someplace else. This is for people who are living in their home and need a little bit more help and may not want to go pull up their computer to figure out directions or find out what time the supermarket closes.

Rae Woods (07:47):
As a member of the sandwich generation, I find this extremely, extremely appealing, but as somebody who studies business research, I'm curious is the business model to just keep going directly to customers, to keep not just selling TVs and microwaves to individual people, but selling this healthcare technology directly to the adult children of some of these elderly folks?

Miriam Sznycer-Taub (08:14):
I'm not sure. And I think that's been interesting to watch Best Buy's moves. Again, this is where they started was buying these companies that were kind of about consumer technology, but I think what they've done more recently is probably a good indication of where they're going, which is starting to create this home based care ecosystem and connecting both patients with providers. And this was most recent where they announced an acquisition of a company called Current Health, which is a care management platform that actually sells to healthcare organizations, not to consumers.

Rae Woods (08:49):
So, this is a B2B move. This is a, "We want to partner with the classic parts of the healthcare ecosystem by providing this connective tissue that they know works well for, let's be honest, the most expensive group of patients that providers tend to serve."

Miriam Sznycer-Taub (09:06):
Yeah, absolutely. Current Health is an interesting one. They are kind of a smallish company that has seen a lot of growth. And they have some big name customers. They have Mayo and Mount Sinai, Geisinger, the National Health System in the UK. And all of them are part of this care management platform that pulls together remote patient monitoring, pulls together technology, and helps health systems sort of see all of that data. And that's a really interesting move if you think about the data that Best Buy is collecting with Lively, right? Now, they're able to sync up what patients are collecting and get it to their healthcare providers, which is one of the big challenges with remote patient monitoring and home based care.

Rae Woods (09:46):
I wonder if you think that that is the end game, because we are at the same time talking about a retailer. So, part of me is thinking back to the times when advisory board was first starting to look at some of the other big retailers that were making moves in healthcare, and their goal, kind of similar to what you're saying with Best Buy, was never just purely based on selling products directly to patients or members. But at the time, we talked about this idea of the cross sell. Get people into CVS, get them to get their prescriptions, do their wellness visit, and also buy shampoo and toilet paper. For Best Buy. Do you think that's part of the strategy, come get your kind of life alert like flip phone, but also walk away with the TV?

Miriam Sznycer-Taub (10:33):
Maybe. I mean, I'm sure they'd love to get more traffic in their retail stores, as well as more traffic on their websites. And of course, they sell a whole range of consumer health products, everything from these phones to thermometers to exercise equipment. I mean, they have a whole world of things that they sell, but I think what they're starting to do is a lot more partnerships that are going to get their products, get their services connected to maybe more traditional healthcare organizations.

Rae Woods (11:04):
And I should say that even where we started, if I think back to 2013, 2014, on what we thought that the classic retailers, the CVSs and the Walgreens were going to do, that wasn't where they ended up going when we think about now. And obviously, CVS acquired Aetna and wasn't just interested in selling shampoo. So, maybe my guess, like yours, is that the long term ambition for Best Buy is to be much more business to business focused than just trying to sell to people like you and me.

Miriam Sznycer-Taub (11:36):
Yeah. I would say that, and you already saw signs of it. They have a partnership with Kaiser. They provide their monitoring for Kaiser's Medicare population. I mean, I imagine they'll look for more of those types of partnerships in the future, because that's, I would imagine, where more of the opportunities are, more than just, again, selling to anyone who goes to their website or comes into the store.

Rae Woods (12:43):
So far, we've been talking about Best Buy in a really positive light. We've been talking about the gaps that exist in the traditional healthcare system and how this organization is attempting to fill those gaps. But be honest with me, do we really think that that's possible? I mean, when I think of innovation, when I think of disruption, Best Buy is not exactly the organization that I think of.

Miriam Sznycer-Taub (13:19):
Well, they're a survivor. If you think back, it used to be Best Buy and Circuit City and RadioShack, and only one of those is still around, and that's Best Buy. So, they've already proved their ability to kind of pivot into a world where I think a lot of other retailers were trying to do the same thing that they did. They figured out a way to survive. And I think that they are entering healthcare in a little bit of a different way than a lot of the other retailers. They're not trying to be a physical provider of healthcare. They have yet to announce that they want you to come to Best Buy for healthcare services, making them a little bit different than some of the other retailers out there. So, they have a history of being different that could serve them well.

Rae Woods (14:05):
And this is actually really important. We've been talking about what Best Buy is doing, but you're right, I think we should focus on what they are not doing. And if I think about a hallmark of innovators in general, it's organizations that can focus in on a niche set of services, or a niche product or a niche customer and say, "We're going to do that thing really well." And that's where I think Best Buy is actually doing that and saying, "It's just going to be these seniors who need help with technology. And we're just focusing on home based care, nothing actually in our storefront."

Miriam Sznycer-Taub (14:37):
Yeah, absolutely. I mean, they have said, I think, in kind of public statements, and in certainly the moves that they're making, that they're focused on home based care, care at home. That is their ambition in healthcare.

Rae Woods (14:50):
And by the way, that is very different than virtually every other retailer that we talk about.

Miriam Sznycer-Taub (14:53):
Yeah, absolutely. I mean, even folks like Amazon who you might think of as being much more of a virtual care provider, is interested in providing care in person. I mean, I think that Best Buy has made themselves different. And while they're certainly focused in the senior world, I wouldn't be surprised if they're going to think about where does home-based care... What's the place for non-seniors? What is the tech that they might need? What's the remote patient monitoring that they could provide to maybe a chronically ill patient that isn't a senior? So, I think they've made spaces for themselves to exist outside of just the senior population.

Rae Woods (15:33):
You mentioned one big retailer that I think gets a lot of noise in the market, which is, of course, Amazon. There's this collective shutter in the healthcare industry whenever the word Amazon is mentioned, but they're not the only one. Again, I kind of want to compare what you think Best Buy is doing to some of these other big names. What's your take on maybe what Best Buy is doing versus the Walmarts and the CVSs of the world?

Miriam Sznycer-Taub (16:00):
One is certainly what we already talked about, is they're not trying to provide healthcare in stores. I think the other thing that's sort of interesting is, a lot of what Walmart and even Amazon has done, they've started for their own employees, right? A lot of this has started as a game of, "How do I, as an employer, reduce healthcare costs for my employees?" And Best Buy doesn't seem to have done that. Certainly they're a large employer, and so I'm sure they have those types of programs in place, but they're ambitions and their sort of moves in home-based care are less focused on their own employee population.

Rae Woods (16:34):
And less focused on kind of hallmarks of being a retailer in general. In fact, maybe one of the takeaways I'm getting from talking to you is, maybe we shouldn't be comparing Best Buy to other retailers because their goals are different, and instead, we should just be comparing Best Buy to other companies, incumbents or otherwise, who are trying to do home-based care.

Miriam Sznycer-Taub (17:00):
Yeah, I think that's right. I mean, I think that's trying to be, is home-based care. I think they, like a lot of people, see the home as the next site of care that care is going to move to, and they want to be a part of that.

Rae Woods (17:15):
So when it comes to home based care, what type of company do you actually think is best positioned to succeed? I mean, again, think about innovation. Is Best Buy, going to be the savior here?

Miriam Sznycer-Taub (17:27):
I don't know that I call them this the savior, but I think that they're making a lot of right moves and interesting moves, right? I mean, I think one of the... Home based care has a lot of promise. It has a lot of challenges too. And strictly from the technology side, you can put all the tech you want into a patient's home, but if the patient doesn't know how to use it, and then if they don't use it properly, and then if no one actually looks at the data, then what's the point of doing that?

Rae Woods (17:53):
And that's really important because in the pandemic I've seen... I mean, I've heard from countless organizations saying we're giving out iPads, because we want to make sure that we're letting seniors shelter in place, but an iPad might be still kind of hard for somebody to use. And an iPad also isn't going to help you get groceries.

Miriam Sznycer-Taub (18:10):
Yeah, absolutely. Right. You can give someone a blood pressure monitor, but if you don't teach them how to use it, if they don't know when they need to change the batteries, if they don't know what to do when it breaks, then it doesn't matter. And then you can't truly know how they're doing in the home. And so I think the idea of providing that tech support is really important. And then the idea of how you connect these devices is also critically important, right? Again, you can have that blood pressure monitor on a patient. They can be faithfully monitoring their blood pressure at home, but if it's not making it into the EHR so that their doctor can see it, then I mean, great for them, but not really great for their overall care.

Rae Woods (18:50):
Or to your point, if it's not connecting to the caregiver, which in this case might be the adult child to say, "Oh my gosh, my parents' blood pressure went up," or "They fell today" that's only going to be so helpful.

Miriam Sznycer-Taub (19:03):
We should note that Best Buy is doing all of this work within one sliver of home based care. To my knowledge, they haven't as much moved into things like doing infusions in the home and other types of care at home, which is of course a whole other conversation that we could have, but they are really focused on this idea of monitoring, of making sure that patients who are in the home are connected, whether just being able to contact a provider or having their vitals or other things monitored.

Rae Woods (19:32):
We started off this conversation talking about the kind of origination story of Best Buy and what they were doing circa 2018. Now, I want to talk about the future. What are you going to be watching for? And maybe what should our listeners be watching for that would be a signal on whether Best Buy is a true sleeping giant or maybe just a blip on the radar on this path towards so-called disruption?

Miriam Sznycer-Taub (19:58):
Yeah. I'm going to be watching for what partnerships they continue to form. Are they able to connect with other health systems? Are they able to connect with payers? Are they able to make inroads into Medicare advantage or other Medicare populations? Because I think that's where we could see large scale change. If they continue in really selling this technology on kind of a one off basis to either patients or their children who want to buy them, great for those people, but then that probably is much less of kind of large scale change for healthcare than if they can get themselves ingrained within the Medicare population.

Rae Woods (20:42):
Well, Miriam, before I let you go, I do want to ask, when it comes to Best Buy, and maybe when it comes to the movement towards home based care and retailers trying to disrupt the incumbent healthcare industry, what's the one takeaway that you have for our listeners.

Miriam Sznycer-Taub (21:01):
I'm going to cheat a little bit. I'm going to give you two. I'm going to start with... We've talked a lot about Best Buy today, and I think there's a lot of interesting things they're doing, but we should remember that the history of healthcare and tech is paved with a lot of big companies who came in with big ambitions, and then had some missteps.

Rae Woods (21:17):
That's right.

Miriam Sznycer-Taub (21:17):
So, I think we just need to continue to watch them, to see what they do, to see how they respond to the challenges that are almost certainly going to come up as they continue to move, to really figure out if they're going to have staying power in healthcare. So, that's one. My second is, I think that everyone needs to recognize that care is moving to the home. People are interested in receiving healthcare in their homes. Things the pandemic has taught us is we can do a lot more in our homes than we ever thought, and that includes getting healthcare. And I would say any healthcare organization that is trying to ignore care shifting to the home is really missing out both on opportunities, but also is likely going to get blindsided by that care moving, whether or not wanted to.

Rae Woods (22:07):
Miriam, it has been a while since we last spoke. What's been the biggest thing that's changed about Best Buy strategy from November 2021 to today?

Miriam Sznycer-Taub (22:18):
Well, one thing that I found really interesting was a few weeks ago, Best Buy announced that they had had a not great Q2, particularly around their electronic sales. And so in response, they're going to eliminate some of their in-store positions and invest more in other areas of the business. And they specifically called out healthcare as an area that they were going to invest more in. And that was interesting because it changed a little bit about what we speculated when we spoke last time. Remember last time, we talked about the fact that maybe their healthcare strategy was about the cross sell, bringing people into their stores through the healthcare business. And I think now, it seems a little shakier. I'm not totally sure that's their goal. They seem to really be prioritizing the healthcare business separately from their retail stores.

Rae Woods (23:06):
And to be fair, I think that's what all of the retailers would tell us at this point. They're not going to say no to more cash for a TV, or I don't know, shampoo, but that's not where they're really focused from a business perspective.

Miriam Sznycer-Taub (23:19):
Yeah, that's right. I think they're interested in selling things online. They're interested in their healthcare business, both their consumer and the business that they're selling to providers and payers, but they are sort of thinking about them separately.

Rae Woods (23:32):
Do you think that this puts a damper on their consumer business?

Miriam Sznycer-Taub (23:38):
No, I think they're just going to approach it separately. So, let me give an example. One thing to really watch is around hearing aids. So recently, there was this announcement that hearing aids will be available without a prescription. Within days of that news, Best Buy announced that they'd be selling, hearing aids over the counter in their stores with a special experience where you could go and buy hearing aids, but then they also would be offering an online hearing assessment on their website. So, they're truly trying to play both sides, be able to both offer consumers the in-store experience for healthcare, but also online purchases.
And I think it's interesting. Hearing aids went from something that you had to go to the doctor, get a prescription, and then go buy, to now something that you'll be able to go to Best Buy and buy at the same time you buy a new TV. And I think we'll see more of that coming. And Best Buy really wants to be that place where you can buy both your healthcare devices and all of your kitchen devices, all of your entertainment things to make your home smart, all of those technology.

Rae Woods (24:42):
One of the things that struck me about our last conversation is that you told me what sets Best Buy apart from a lot of the other disruptors that we're tracking is that Best Buy is really, really focused on home based care. In the context of what you're telling me about moving things more online, kind of being the place to get the next technology, is home-based care still a core goal of Best Buy?

Miriam Sznycer-Taub (25:05):
Yeah, absolutely, it is. At the beginning of the pandemic, and even last time we spoke, everyone was focused on home-based care, but there was questions about whether that was a permanent focus. Best Buy's commitment to the home shows that there's really staying power in that strategy. If you go to Best Buy Health's website, they talk about making the home the center of health.

Rae Woods (25:27):
Oh wow.

Miriam Sznycer-Taub (25:27):
And so you can see how that's really what has gone through all of their strategy. Again, whether it's the selling to consumers or whether it's selling to payers or providers, it's really all about the home.

Rae Woods (25:39):
And that strikes me as something that might be slightly different about what Best Buy is doing compared to any of the other retailers, retail pharmacies, other disruptors that we're tracking. Is that your take as well?

Miriam Sznycer-Taub (25:51):
Yeah, I'd agree with that. I think everyone is talking about moving care into the home, even some of the other disruptors, the people you just mentioned. But I think what's different about Best Buy is that they're not interested in building a brick and mortar clinic where people can come and receive care or interested in employing doctors. They've really made getting care into the home the really sole part of their healthcare strategy.

Rae Woods (26:18):
If I think about the differences between Best Buy and some of the other folks is Best Buy is really not trying to get into care delivery, which also means they're not reliant on things like reimbursement in order to actually make money. And I wonder, if we're thinking about the whole landscape of disruptors and who's actually going to be able to have that staying power you talked about, I wonder if not getting into care delivery actually gives Best Buy some protection.

Miriam Sznycer-Taub (26:48):
Yeah, I think it's a good thing to think about. They certainly have chosen a different path than a lot of the other disruptors that we've talked about on this podcast and that have been covered in the news. Their sort of disruption is really about this seamless set of interactions between people and healthcare through technology. And they're doing that in a lot of different ways, whether it's facilitating virtual visits, whether it's getting people emergency response, whether it's connecting people with tools that they need to be healthy, but it's not necessarily providing that direct care. They're probably not going to be the place that you go for your primary care appointment. In fact, they're almost certainly not going to be, but they might be the place that you go and buy the home blood pressure monitor or a glucose monitor, or something that you need coming out of a primary care visit. And they might be the platform that's running in the background, connecting you and your provider to help deliver some of that care virtually.

Rae Woods (27:49):
When we spoke nine months ago, I asked you if Best Buy was a sleeping giant, or maybe they're just a blip on the radar, and we're going to forget about them another nine months from now. Has your answer changed since the last time we spoke?

Miriam Sznycer-Taub (28:04):
I don't think Best Buy is a disruptor in the way that we think about Uber or Netflix. I think the path that they've chosen to not focus on care delivery does, in some ways, limit their ability to disrupt what we think of as kind of the traditional healthcare process. But I think that Best Buy is going to be a catalyst towards moving care into the home for everyone, and I think that's going to push other companies, including other disruptors, to act in similar ways. And I still think it is interesting and remain surprising to everyone that one of the catalysts for this move to the home has been Best Buy, the company that a lot of people always thought of as just the place where you went to buy a TV.

Rae Woods (28:47):
I could not agree with that more. Well, Miriam, thanks for coming back on Radio Advisory.

Miriam Sznycer-Taub (28:54):
Thanks, Rae.

Rae Woods (28:59):
What I hope this story makes clear is that innovation continues forward in healthcare. Look, I know that so many of you are tired and that the pandemic continues to drag on, but also remember that many of you promised us change in healthcare. And I think the Best Buy story is a good example of if you don't change, somebody else will. But remember, as always, we are here to help.