Pharmacies, hospitals build revenue, goodwill by being COVID-19 vaccinators – Crain’s Detroit Business

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Retail pharmacies and private hospitals have been two primary COVID-19 vaccine providers, along with health departments, since the Pfizer-BioNTech and Moderna vaccines were approved in late December to fight the pandemic.

Encouraged by state and federal health officials to create convenient access points and provide education about the relative safety of the newly developed vaccines, many pharmacies and hospitals developed sophisticated and comprehensive marketing and education programs to get the word out to the public — and to potential customers.

But have pharmacies and hospitals crossed a line from engaging in what most people believe would be as a purely altruistic and educational purveyor of crucial information to what they have always done as private businesses: sell products and services to enhance revenue and profitability?

In a Feb. 16 earnings call, CVS Health President and CEO Karen Lynch and COO Jon Roberts may have spoken for many private vaccinators when they acknowledged that offering the COVID-19 vaccine in their thousands of stores and clinics could also generate new customers and sales opportunities.

Analyst AJ Rice of Credit Suisse asked: "Should we think of the vaccine for COVID like the vaccine for flu, where there is some added benefit in the front end of the store?"

Roberts: "Yes. So we do see an opportunity with the vaccines and building relationships with new customers to convert them to long-term CVS Health customers."

He provided an example. "Our customers, after they get the vaccine, have to wait 15 minutes as we observe them to make sure they don't have an adverse reaction. So we're going to give them a series of value-adds to encourage them to engage further."

Roberts said a person who registers for a COVID-19 vaccination "is coming through our digital front end. So we have their email, we have their text message, and we have the ability to communicate with them regularly. ... I would think about it as adding new customers to the CVS channel and getting their pharmacy business plus their front store business."

Pharmacies like CVS contend the data they are collecting from millions of customers is important for efficiently getting people in for vaccinations and that they follow health privacy rules as they tailor marketing to keep in touch with customers.

Moreover, health care providers say more education is necessary because vaccine hesitancy threatens to halt the effort to get above "herd immunity" of more than 70 percent against COVID-19.

As of May 1, 56 percent of U.S. adults had received at least one dose, but 14 percent say they won't get a vaccine, 21 percent will wait and 10 percent will get vaccinated when they get around to it, according to the Harris Poll.

Privacy attorney Debra Geroux with Butzel Long in Bloomfield Hills said the Centers for Disease Control and Prevention has created a vaccine checklist and guidelines for providers that want to market vaccines. It primarily focuses on education and doesn't restrict how they advertise vaccine availability from an ethical standpoint.

"The CDC has recognized that the numbers (30 percent of the public vaccinated) are not up where they thought they would be," Geroux said. "So marketing, the vaccine is now an important goal of the federal government."

On the other hand, consumer advocates believe there should be stronger limitations beyond existing privacy laws on how pharmacies use COVID-19 vaccination data as people have little choices in where they get a vaccine because of limited choices and supplies.

Privacy rights groups also are pressing retailers to promise customers they will keep that information separate from marketing or business databases and only collect the minimum amount of information necessary for vaccine appointments.

When a person registers for a vaccination, many times they go on email mailing lists and receive marketing information from retailers about products unrelated to health care or their vaccine appointments.

For example, Walmart recently sent out an email with a marketing solicitation for "feel-good foods, for less" after a Crain's reporter signed up and received a Johnson & Johnson vaccine in March. The email advertisement offered enchilada cheese '20-minute meals for under $10.' "

Privacy attorney Debra Geroux with Butzel Long in Bloomfield Hills said she isn't surprised CVS is using its status as a COVID-19 vaccine provider in its general advertising and marketing campaigns.

"If you think about it, that is how most pharmacies are set up and why when you go to your CVS, or Rite Aid, or wherever, to get your prescription, you have to go through the rest of store to get to the the pharmacy," Geroux said. "If you're dropping off a prescription or mulling around for 10 minutes, that's going to cause you to shop and kind of impulse buy."

Federal law, under the Health Insurance Portability and Accountability Act of 1996, regulates the use of patients' health information. HIPAA prevents pharmacies from sharing customers' health data for marketing purposes.

But Geroux said pharmacies have wide latitude to collect and use customer data, so long as they're not mining sensitive health information.

Pharmacies can use the information to send coupons to customers and promote health services they may already offer, like checkups or flu shots, Geroux said. They are freer to use the collected data once they scrub it of identifying details, like names and contact information.

"The marketing regulation is pretty straightforward," Geroux said. "They can't give the information to a third party or market a third party's services. But that's not the case here. They're marketing their own services."

Matt Friedman, a marketing and communications expert with Tanner Friedman Strategic Communications in Farmington Hills, said pharmacies and hospitals are serving urgent public health needs and fulfilling an emotional and public relations aspect with their vaccination programs.

"It's different with the hospitals because especially the nonprofits, they have a mission, a community mission that involves health care. It's pretty easy to connect vaccinations to their community mission," Friedman said.

"But if you look at the drugstores, vaccinating patients is just a great emotional connection with customers in a really competitive business," he said. "They compete for street corners and the grocery stores, and Walmart and Target, have entered the pharmacy market and are very competitive."

People getting vaccinations for influenza, shingles and now the coronavirus can become a life event that brings a more meaningful and memorable shopping experience than other retail products, Friedman said.

"(Pharmacies) brings people into the back of a retail store, which is just the place that retailers want you to go, because if you have to go to the back of the store, chances are you're going to spend money in the front or the middle of the store while you're there," Friedman said.

In a statement to Crain's about how it uses data collected, CVS Health spokesman Charlie Rice-Minoso said the pharmacy believes it is critically important for the public to receive both doses of the Pfizer or Moderna vaccine.

"That is why we are using the contact information patients provide us when they register for appointments to send them frequent reminders about their appointments, especially for the second dose," Rice-Minoso said.

Besides CVS, Crain's reached out to pharmacies Walgreens Co., Rite Aid, Kroger and Walmart for interviews about their marketing campaigns and how the companies use the information of people they gather from registration forms, which can include federal law privacy protected medical information.

Kroger Co. of Michigan declined comment. Rite Aid didn't respond to several requests. Walgreens emailed a statement.

"Walgreens plays an important role in COVID-19 vaccine administration in communities across the country, and our goal is to guide people on a safe, personalized path to health and wellness," said spokesperson Alex Brown in the statement.

"Our multi-faceted marketing approach will help build trust in the vaccine and provide equitable access to vaccines through strategic partnerships and off-site vaccination clinics," Brown said.

So far, Walgreens has administered more than 12 million vaccines it its 'This Is Our Shot' campaign that the Deerfield, Ill.-based company hopes will help bring an end to the pandemic. The campaigns include social media information, including videos and other promotional messages on its website.

"While a significant number of individuals remain vaccine hesitant, together with credible voices — including celebrities, influencers, faith-based organizations, community leaders and Walgreens pharmacists — Walgreens can play an important role in helping build trust in the vaccine," Brown said.

Brian Swartz, an independent pharmacist who owns Pharmacy Care and Gifts in Middleville, a suburb of Grand Rapids, said independent pharmacies are much different in how they market and sell products than large retail corporate chains.

"I can tell you that 99.9 percent of the independent pharmacies are following that (HIPAA) rule that they realize that we can't generate email lists with the information we're getting from the patients" through COVID-19 vaccination registrations, Swartz said.

For example, patients are asked a number of personal medical questions when they register for a vaccination, including age, sex, chronic diseases, medications used.

"We talk with patients about any concerns they have before we give them the vaccination," Swartz said. "We collect that information but it's not shared, other than for billing for reimbursement. That's protected health information we have to keep for 10 years."

Another danger created by registering and sending your protected health information to multiple pharmacies or hospitals to get a COVID-19 vaccine has to do with the increasing number of cyberattacks.

Geroux said the large number of people registering for vaccines has increased the risks of having medical information exposed by a hacker in a cybersecurity breach.

Each year, dozens of health systems and health care organizations are hacked through ransomware and phishing scams. In 2020, 642 health care organizations were hacked, a 25 percent increase from the previous record year, according to the HIPAA Journal based on federal statistics.

"These threat actors are incredibly sophisticated. Last month, the FBI issued an alert about known threats to emergency responders and government agencies that their secure their networks are subject to attack," Geroux said. "We know that health care is the number one industry that is subject to cyber security breaches."

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