DENVER — The health and wellness landscape is changing, and retailers able to navigate it will be better positioned for success. That ability and the capacity to build networks were key points made at the 2015 NACDS Total Store Expo in Denver by the National Association of Chain Drug Stores’ top two leaders.
“You think about health care as we see it today, health and wellness — it’s not just about pharmacy anymore,” said NACDS chairman Randy Edeker. “It’s about clinics. It’s about all the support items that go with that. And then it’s about the lifestyle changes and evolutions that we see.”
Edeker, who became NACDS chairman in April and is also the chairman, chief executive officer and president of Hy-Vee Inc., said the association’s role in helping to build networks is more important now than ever. “It’s about connections and relationships. NACDS is the catalyst for that collaboration. It brings health care, retail and suppliers together.” Edeker added that TSE offered an “ideal forum” for strategy, innovations, unrecognized opportunities and discovery of new possibilities.
NACDS president and CEO Steve Anderson stressed the need to be flexible to “interruptions” in the industry. “At prior NACDS meetings, I’ve talked about ‘disruptive innovation’ — when a product or service displaces established competitors by making that product or service more accessible to the general public,” he said.
Anderson cited the evolutionary effect of personal computers on mainframes and of cell phones on land lines as positive examples of disruptive forces and observed that NACDS member stores have similar effects on health care. “But I’ve decided it’s not just disruptions that change the game,” Anderson continued. “It’s also the interruptions. Interruptions have the power to change our future.”
Anderson cited several examples to illustrate NACDS’ flexibility in addressing issues: the advocacy by NACDS to block an effort to reduce Medicaid pharmacy reimbursement to help pay for the 21st Century Cures legislation passed by the House of Representatives; the association’s preparation for all contingencies in anticipation of the Supreme Court’s ruling earlier this year on the Affordable Care Act; its successful advocacy on Medicaid funding issues in New York, California and other states; as well as engagement on complex prescription drug abuse and access issues.
Changes in the industry Edeker spoke to included efforts to advance pharmacist provider-status legislation, specialty pharmacy, health care quality measures, and the role of technology and cybersecurity.
Edeker also touched on Obamacare and how it has affected the Medicaid and Medicare environment. “You know, the Affordable Care Act, ACA, really changed everything. It’s really boosted Medicaid and Medicare enrollment,” he said, adding that 40% of all retail pharmacy prescriptions are through Medicaid and Medicare.
“When you consider the narrow and restricted networks that exist and reduced reimbursement, there are a lot of challenges that we face in this area. So retailers today have to be more focused on the total trip than ever in their history.”
Anderson also addressed Obamacare and said NACDS was ready to react to whatever way the Supreme Court ruled when it ultimately upheld the ACA in June.
“However you feel about the law, if it had been struck down there would have been a mad scramble to figure out how to keep coverage for the newly insured,” Anderson said. “And Congress may have had to reconsider some of the pharmacy issues that NACDS made progress on through the health care reform law, such as Medicaid reimbursement. So, whichever way the Court ruled, we were prepared. We had a very elaborate plan before the Supreme Court decision. NACDS doesn’t wait for interruptions to happen and then figure it out. We have plans before interruptions happen.”
Both leaders mentioned the importance of Millennials to retailers, with Anderson saying: “There is no doubt Millennials have already begun to dramatically impact your business, the public policy that affects your business, and the politics that decide the people who affect the policy that impacts your business.”
Millennials, Anderson added, are replacing baby boomers as the largest living generation — “so they are worth getting to know.” Anderson also cautioned that Millennials “expect companies to stand for more than the bottom line.”
In rounding out his remarks, Anderson issued a challenge — “an invitation” — to attendees.
“As this meeting continues, get out there and look for the interruption that’s worth stopping you in your tracks: an exhibitor with a new product or a business partner with a new idea. Get out there and meet the people who can help you. Get out there and learn something new about this amazingly dynamic and changing operating environment. Or, take the risk and create the interruption that needs to be created. Pitch your idea. Make that difference. Shape your future.”