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While many other retail giants have pulled back on their recent forays into health care, Best Buy (NYSE: BBY) is continuing to push forward though its Best Buy Health business – with home-based care being a cornerstone of the strategy.
Last week, health care leaders from Baptist Health South Florida and Mass General Brigham appeared on a webinar hosted by Best Buy Health and moderated by Tom Kiesau, chief innovation officer and managing partner at Chartis, where they discussed the financial benefits and value of care-at-home programs.
Best Buy Health — a subsidiary of the electronics giant Best Buy — hosting this discussion illustrates the company’s position as an emerging power player in the care-at-home space. Baptist Health South Florida and Mass General Brigham are among the company’s health system partners.
“We’re putting the home at the center of health and bringing all of these [experts] and backgrounds to up-level the work that our health care ecosystem partners are doing across the board and unlocking greater reach, agility, efficiency and transforming how we’re delivering those services through technology,” Dr. Sindhu Pandit, senior medical director at Best Buy Health, said during the webinar.
In this week’s exclusive, members-only HHCN+ Update, I’ll highlight the leaders’ insights on how home-based care, and hospital-at-home specifically, can be both cost-effective and profitable, and examine Best Buy Health’s position in the health care landscape. I’ll also offer key takeaways, including:
— Health systems are looking for ways to extend their capacity
— Health systems are building strong financial cases for at-home care programs
— Best Buy Health has remained consistent in its home-based care efforts
Brick and mortar isn’t the answer
Mass General Brigham operates one of the largest hospital-at-home programs in the country. The health system is on the verge of reaching 6,000 admission into the program, and has saved over 25,000 acute care facility bed days since 2022.
One of the main reasons Mass General Brigham has heavily invested in its hospital-at-home program is that it allows the organization to address capacity issues head-on.
“The answer is not more brick and mortar hospital beds,” Danny Metzger-Traber, vice president of strategic business operations at Mass General Brigham Healthcare at Home, said during the discussion. “The answer is something different, and for us that is home hospital.”
If Mass General Brigham is the alpha of care-at-home, then Baptist Health South Florida is the omega, according to Jonathan Fialkow, the organization’s chief medical executive. The health system has 12 hospitals in four counties and 30,000 employees.
The organization is still at the beginning stages of launching its care-at-home arm. This has meant determining what capabilities it already has in place to aid these efforts, and needs to be built or outsourced.
Baptist Health South Florida is roughly six months into its assessment phase, Fialkow noted.
Making the financial case for an at-home program
Mass General Brigham has to be thoughtful in managing its program, and its approach holds lessons in terms of how to track financial outcomes and quantify the program’s successes on that front.
“We do it in a couple different ways,” Metzger-Traber said. “One of them is with the virtual P&L, and there we work with the CFOs across our participating hospitals, just to say we’re tagging every one of these cases that ends up in a home-hospital that’s either admitted to home-hospital or transferred from [an] inpatient floor over to us. We’ve created some methodology to figure out how we allocate that revenue.”
It was also important to Mass General Brigham to be holistic about cost.
In other words, making sure the organization is doing the correct apples-to-apples comparison with what a brick and mortar has to put together to deliver that same kind of care in the hospital, Metzger-Traber noted.
As Baptist Health South Florida was launching its program, Fialkow needed to establish that this model made sense.
“Our biggest pushback was our finance folks, we had to change that perception – everything’s not a line item. How do we attribute saving money or avoiding costs somewhere else?” he said. “But the big seller was getting our CEOs of the facilities as champions, understanding [their] capacity and bed management, understanding the value of bringing in an elective surgical patient who might be delayed or going somewhere else, because we’re opening up beds. When we put that P&L together it was quite eye opening, and that’s where we got the traction.”
Kiesau, who led the discussion, pointed out other benefits of a health system having hospital-at-home under its belt.
“You’re not having that low-acuity COPD case that you lose $12,000 in fully loaded costs sitting in your beds,” he said. “You’re also able to bring someone in who isn’t that low-acuity case, that is higher margin. These all stack. These are all incremental and discretely quantifiable.”
Ultimately, health systems need to be willing to throw their weight behind these programs.
“It requires some investment, but that investment actually drives a significant return,” Kiesau said.
Best Buy Health cements its spot in home-based care
Over the years, Best Buy has been part of a trend of big name retailers — including Walgreens Boots Alliance (Nasdaq: WBA), CVS Health (NYSE: CVS), Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT) — that made a concerted effort to enter the home-based care arena.
Each of these companies used different avenues to make their mark. Best Buy Health focused hospital-at-home, partnering with health systems like Mass General Brigham, Geisinger, Atrium Health and more.
In 2021, Best Buy acquired home-focused technology platform Current Health. The company has leveraged Current Health, and its Geek Squad services, to push more care into the home.
“Current Health had our best commercial year ever after the acquisition,” Chris McGhee, co-founder of the company, told Home Health Care News in 2023. “Best Buy, through Geek Squad, has an entirely unique capability in the market to cross that final mile and go across the threshold into the patient’s home and support that individual with the technology, ensuring that the nurse or the doctor isn’t becoming IT support.”
Last year, Best Buy Health also revealed that it has implemented over 40 acute care home monitoring programs across the U.S. and U.K. The company also positioned itself as an expert voice in the space by sharing insights gained from years of experience implementing remote patient monitoring (RPM) through hospital-at-home.
This most recent webinar falls in line with the company stepping into the role of an expert voice.
While many of Best Buy Health’s retail peers have pulled away from the health care sector, the company has only doubled down.
At the start of the year, Best Buy Health, the company outlined its 2024 milestones which included the introduction of a medical alert device offering, the expansion of its at-home care focused partnership with UC Davis Health and its role in accelerating hospital-level care at home through clinical research.
And to further drive home the focus that Best Buy Health’s strategy centers the home, the company for three years has hosted a summit called “This Way Home.”
“Leaders from health systems, health plans, and biopharma came together to share lessons learned and visions for the future of enabling care at home for everyone,” the company stated in its 2024 recap.
There are many reasons why Amazon, Walgreens, CVS and Walmart have stumbled in their health care initiatives, but it strikes me that none of those organizations has placed such clear and consistent emphasis on the home as the preferred site of care for patients, providers and payers. I think it’s a testament to that strategy that while Best Buy as a whole is restructuring, Best Buy Health is only gaining more prominence. The headline on an August 2024 Forbes column from Matthew Stern put it succinctly: “Will Best Buy Health Birth A New Kind Of Best Buy?”
Stern raised some concerns about Best Buy’s focus on an older demographic in terms of the strategy not encompassing younger consumers, but he also pointed out the significant opportunities in the aging-in-place market. Indeed, the company’s partnerships with health systems might already be setting it up to tap into all sorts of different places that older adults call home, including assisted living communities. As Stern put it:
“Meanwhile for the older demographic, partnerships with the new generation of ultra-modern assisted-living communities alongside the individual aging-in-place households could give Best Buy a thriving additional channel for seniors-focused technology (and maybe even have a Geek Squad office on-site for individual seniors communities).”
Consider that Baptist Health South Florida has forged a joint venture with senior living provider Belmont Village to create exactly this type of “ultra-modern” community.
This is just one example of the future directions that Best Buy Health could take, to extend its focus on at-home care. The company is still early in its health care journey and no doubt there are many twists ahead, but I think that the focus on the home as a unifying principle for this business could prove to be a key driver of its success; it’s a simple principle to grasp, a promising one to market, and an approach that aligns with the mega-trends shaping U.S. health care, as more services migrate from the hospital and other settings toward the home.
In any case, it will be interesting to see whether Best Buy Health can continue its momentum in 2025 – and certainly, the company’s leadership expects such momentum.
“While still very small in relation to our core business, our FY25 Best Buy Health sales are expected to grow faster than the core business, which combined with cost synergies from fully integrating acquired companies are expected to drive another 10 basis points of enterprise operating income rate expansion,” Best Buy CEO Corie Barry said on a 2024 earnings call.
The post Focus On The Home Propels Best Buy Health While Other Retailers Pull Back On Health Care appeared first on Home Health Care News.
