What Senior Living Operators Can Learn From Kroger, Amazon’s Shift Into Health Care

As it gears up to serve a new generation of residents, the senior living industry would do well to study the ways that large retail organizations such as Amazon and Kroger have deepened health care offerings in recent years.

What is helping set the stage for senior living providers to get more involved in the healthcare space is the increasing amount of Medicare dollars going to private health insurance companies.

Private insurers make up around half of the $1 trillion expenditure threshold that was broken last year, according to Anne Tumlinson, founder and CEO of ATI Advisory.


“A lot of these services, innovations and disruptions are actually not traditional healthcare, they don’t look like medical care at all,” Tumlinson said this week during a panel discussion at the 2024 NIC Spring Conference in Dallas. “The lines between sectors are blurring and the types of things that we see being offered in the most kind of innovative ways, whether it’s food, housing, or social support services are increasingly becoming part of what we think of as medical care.”

She added that the “disruptive growth in the retail sector entering into healthcare is going to create opportunities for senior living.”

“And also I think it has many lessons to teach us as a sector that has, in many cases, a real estate footprint that depends on revenue from its occupants,” she said.

Photo via NIC / LinkedIn

Following retail’s journey into health care

Just five years ago, the phrases “medical care” and “health care” may have elicited images of a physician working in a hospital. Fast-forward to today and it means a very different thing, according to Tumlinson.

Today such health care might be offered by an advanced practice nurse, nurse practitioner, community health worker, or a social worker. Care settings also now include more places than just where clinical care happens, and health care workers are now also “touching base with the people that they’re seeing, in-between visits, through a much more digital free flowing kind of knowledge,” Tumlinson added.

“Who’s paying, what they’re paying for, how they’re paying for it and where it’s delivered are all changing and shifting,” she said.

How the retail industry got to where it is today holds lessons for operators experiencing many of the same trials and tribulations.

Marc Watkins, Kroger Health chief medical officer, said the grocery chain’s dip into offering pharmacy services came from asking consumers what they wanted around 50 years ago.

The company repeated the process in 2005, and consumers expressed a desire for “convenience, transparency, and also affordability in health care,” leading to Kroger Health acquiring its first clinics in 2010. Now, the chain has 225 clinics in 35 states, and late last year, it partnered with Better Health Group to offer in-store primary health services to older adults in value-based care frameworks

“Right now, less than 10% of primary care offices will not have extended hours or some ability to meet a patient demand after hours.” Watkins said. “And that was really the evolution of what’s happening generally throughout the ecosystem, not only in retail health, but in other sectors and other verticals and health care.”

Kroger’s business line has grown to represent about 10% of the company’s total sales revenue in 2023, Watkins said.

“Healthy communities are good for business,” he added.

One Medical has a goal of “better health, but better care and better value,” said Market Medical Director Dr. Lindsay Botsford. But the country’s health care system is “not delivering very well on the value proposition and health care right now,” she said.

“We want to make it dramatically easier for customers to find, afford and engage with these services, products and professionals that are going to help improve health,” she said.

In 2022, retail giant Amazon acquired One Medical in a transaction valued at about $3.9 billion. Today, the company has 250 offices in about 24 markets, Botsford noted.

One Medical is a “human centered technology powered company” – and it takes both to succeed in value-based care, Botsford said.

“You really can’t do one without the other and think you’re going to succeed, especially in a value-based care space where you’re trying to manage risk and deliver a better experience and better value,” she said.

The importance of relationships

One way that senior living operators are better at delivering care is by joining forces with other companies.

Botsford said that early on in its journey, One Medical realized it needed stronger relationships with other stakeholders in the health care continuum, as well as build relationship-oriented teams in its clinics.

“When you have those relationships, whether it’s with a healthcare worker, or someone that just knows the patient, you pick up on things, and I think that’s where we really saw the secret sauce and the difference,” she said.

Joining forces with others is also the modus operandi of the Senior Living Transformation Company from a group of stakeholders that includes industry veterans Arnie Whitman and Chip Gabriel along with Omega Healthcare Investors (NYSE: OHI) and Kalven Senior Living.

Gabriel senior living is already part of the healthcare system, but at the moment is not “getting credit” for its involvement. He noted that while Senior Living Transformation Company’s goal is not to “be the everything” for healthcare services, it is trying to actively listen to consumer demands at this time, which has asked for an increase in services.

“What would happen if you moved into one of our communities and your health care was included, your primary care was there, your lab work was done there, your medications were managed there, your adult daughter didn’t have to drive you anywhere, we can treat chronic diseases?” he said. “That’s what the customer wants.”

Looking ahead, he said the collective is trying to measure quality from a Medicare and payer perspective.

“We’re not cutting-edge yet, we’re still bleeding-edge, but we’re … going the right direction,” Gabriel said.

In addition, Gabriel noted the senior living industry needs to find ways to partner with other companies like Kroger, Amazon and One Medical.

“We know how to care for people, we have eyes on [insurance plan] members, but we need to be entrepreneurial. We need to be collaborative,” he said. “I think the next five years are going to be some of the most entrepreneurial opportunities we’re ever going to have. And so I think if we don’t see it, we’re going to miss it.”

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