Best Buy Health Updates

On Tuesday October 12th, 2021, Best Buy announced the acquisition of Current Health, a U.K. based technology company that offers a digital platform for remote patient monitoring and telehealth services.1 Best Buy Health focuses on bringing healthcare into the home, specifically for aging seniors, by utilizing health technology devices and people-driven services. Best Buy’s healthcare division offers virtual care, such as remote patient care, in-home patient monitoring, and technology solutions for Medicaid members, Medicare patients, and seniors (age 65+ years).

Financial details about the acquisition of Current Health were not disclosed, but Best Buy predicts that they will close this deal by the end of their fiscal year, which is the end of January. Best Buy will combine its large retail reach, extensive experience in supply chain management, and nationwide trusted support services with Current Health’s health technology to create a holistic care ecosystem for seniors.2

Best Buy has been expanding its healthcare initiatives over the past few years. In 2012, the company faced financial ruin due to fierce competition from online retailers, such as Amazon. Best Buy executives avoided closure by recreating their business model into one that focused on excellent customer service and creating strong relationships. They implemented the Geek Squad and agnostic technology solutions to rejuvenate the business. Seeing the success of this model and the value behind personalized customer support, Best Buy created Best Buy Health, an at-home health service aimed towards aging seniors.3

In 2017, Best Buy Health launched Assured Living, a remote monitoring service for seniors at home, and they partnered with a home medical exam producer called TytoCare.4 In 2018, they acquired GreatCall, a tech company that makes smart devices for emergency response services, for $800 million.1,2 Best Buy then acquired BioSensics, a company that produces wearable health sensors, for $21 million, and Critical Signal Technologies, a remote monitoring company.4 Best Buy is also partnered with Workpath for in-home blood draws and with ScriptDrop for medication delivery.2 Additionally, Best Buy now sells a variety of smart medical devices and launched their own senior-focused smartphone called Lively.5,6 Best Buy spent approximately $1 billion in the healthcare space in the last four years.3

Best Buy is not the only retail giant disrupting the healthcare market. Companies such as Amazon, Walmart, AT&T, Comcast, and Apple have also made strides towards advancing their own health divisions. Amazon has established Amazon Care, a health division that offers at-home healthcare and medication management through a mobile app that directly connects with providers, medication delivery, and a 24/7 virtual care team. Walmart opened primary care clinics called Walmart Health for its customers at retail locations. AT&T has been working on strategies for using their wireless network to create remote healthcare tools. Comcast has been developing a health care platform for the television that seniors can use for remote healthcare services. Apple owns the Apple watch and Apple health.7

Will Best Buy be able to compete with these companies? Best Buy’s stock price has increased over the last month by 20%, with a value of $132.11 per share*. They have established trust due to years of providing hands-on help directly in the home via the Geek Squad. Best Buy has a large reach, with almost 1000 in the U.S. and 20,000 Geek Squad Agents. As a comparison, Apple has 272 stores in the U.S. This reach equates to 75% of the U.S. population being located within 15 minutes of a Best Buy store.4,9 Best Buy Health focuses on senior living, an area that other companies are not solely focusing on. This chosen population makes patients covered by Medicare Advantage Plans a key target. There are around 30 million patients enrolled in a Medicare Advantage Program.4 Best Buy also has many technology partnerships to advance their healthcare solutions, and they offer a variety of benefits to their customers, such as social services, care centers, urgent response teams, GreatCall rides, and Geek Squad Agents available 24/7. Finally, Best Buy’s acquired partner, Current Health, has grown their revenue by 3000% year-over-year and grew their new customer network by 40%, leading to the prediction that this merger will only help Best Buy continue to grow.2,8

As with any company trying to break into a new space, Best Buy may face obstacles. Their biggest concern is their ability to scale the business to continue to provide amazing care and customer service. There is always the concern that competitors will enter the senior living market and directly compete against Best Buy.5 Despite potential challenges, Best Buy has many advantages over other competitors, such as having established strong trust from their customers, offering agnostic solutions, utilizing the Geek Squad, and having a massive reach in the U.S. It is likely that Best Buy will continue to disrupt the healthcare and telehealth industry, as trends have reported that baby boomers want to age at home, thereby making healthcare at-home the future.1

Best Buy is focused on senior living, remote monitoring, real-time data, in-home care, and emergency response. Since their primary target is seniors, Best Buy could consider entry into pharmacy, as seniors tend to use the greatest number of medications.  This large number of medications creates a need for medication management services, which pharmacists can provide. Other competitors, such as Amazon Care, already offer some pharmacy services. PHSL will closely watch how Best Buy progresses over time and continue to assess its disruption in the market.

Market price acquired 11/09/2021 at 11:21 AM*

 

References:

  1. Repko M. Best Buy pushes ahead with its health-care strategy by acquiring Current Health. CNBC. https://www.cnbc.com. 2021 Oct. 12 (accessed 2021 Oct. 26).
  2. Landi H. Best Buy ramps up focus on home health care by acquiring Current Health. Fierce Healthcare. https://fiercehealthcare.com. 2021 Oct. 12 (accessed 2021 Oct. 26).
  3. Burdakin A. Best Buy’s healthcare strategy: 5 millions seniors in 5 years. The Motley Fool. https://www.fool.com. 2019 Oct. 1 (accessed 2021 Oct. 26).
  4. Mozart M. Why Best Buy could disrupt senior care more than rivals like Amazon. Senior Housing News. https://seniorhousingnews.com. 2019 Sept. 26 (accessed 2021 Oct. 26).
  5. Perna G. Current Health CEO on what’s exciting, and scary, about being acquired by Best Buy. Health Evolution. https://www.healthevolution.com. 2021 Oct. 20 (accessed 2021 Oct. 26).
  6. Best Buy. Shop smart health products. https://www.bestbuy.com. (accessed 2021 Oct. 26).
  7. Advisory Board. Is ‘big retail’ the next big health care disrupter? https://www.advisory.com. 2020 Feb. 7 (accessed 2021 Oct. 26).
  8. Best Buy Health. https://healthcare.bestbuy.com. (accessed 2021 Oct. 26).

 

 

Posted: November 2021

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