Speaker 

Welcome to the stage Brian Cooley editor at large of CNET.

 
Brian Cooley 

Thank you everybody. Thank you and welcome to another chapter in this very interesting unfolding of this year's cmo insights track here at see space at CES. How many of you are new to see CF to the this conference in general. Okay, my condolences, the rough week. We're going to try and clarify for you one of the biggest things going on here. Or it's the area of health technology, health and wellness, and the services that come around it. I actually hope at this point, you're slightly scratching your head looking at this conference and this panel and looking for the people that are involved in saying this looks odd. Why are these brands here to talk about health? That's the whole point, we're going to expose to you in the next 40 minutes how so many brands can and really, in many cases, must get an attachment to this whole trend of digital health technology, which is one of the few biggest trends we're tracking this year at CNET here at CES. This is a big one, I'm going to explore some tentacles and connective tissue that maybe you didn't realize, and maybe it'll inspire your brand to find its role in the health revolution. So that's why we really have gone to some interesting directions to find brands that you may say, That's interesting. I didn't think they would be involved in this so that it helped me do all this. Let's bring on the real experts.

 
Brian Cooley 

What's interesting about having Ph. m here is that they aren't just as, as Andrea's sort of foreshadowing, they aren't just about the media piece. They are an investor. They've got a venture arm and they're about evangelizing amongst their various clients how they may or should get involved in this. We're going to hear about that. That's a really interesting aspect. And finally, Matt, tell us about Walmart, health and wellness. We all know Walmart, yeah.

 
Matt Parry 

Walmart, right, and the Yeah, health and wellness, Walmart has actually had a fairly rich heritage in health and wellness. We actually launched our first pharmacy back in 1971. And right now, we serve about 420 million prescriptions every year. We also have vision centers, care clinics, we do wellness events. But as you know, Walmart's mission is to help people save money so they can live better. And as we look at our talk to our customers, healthcare has just come up as a real need. So we're looking to innovate in this space and see how we can use the Walmart brand, our footprint, our capabilities to help people get greater access to affordable health care.

 
Brian Cooley 

How many of you know that Walmart has recently launched its own first bonafide medical clinics. few of you, yeah. still quite fresh news. And I want to be hearing about that as pepper your experience in that as we go through some of these questions. Let me ask each of you, what brought you into health? Did the consumer ask for it? Or are you anticipating their need? It sounds like Matt, you heard from customers? That's right. Yeah.

 
Matt Parry 

I mean, we've heard you know, we've talked to our customers along and we listened to them. And, you know, as well as struggling every day, we are busy families who are struggling to, you know, manage everything, not just their money, their time. We it kept coming up as one of the number one issues and we believe we can play a really important role in that. And so, over the last two years, we've had a new CEO of insky, who's come in and really wants to disrupt the healthcare space. And so for the last few years, we've been looking at talking to our customer understanding, well, what does that mean? And what we're absolutely focused on doing is putting the customer at the center of that because a lot of Medical provision today has to continually jockey between providers, insurers, the customer. And we think we can do things differently. We think we can swim upstream and build a better healthcare solution for our customers, for our associates and for the US in general.

 
Brian Cooley 

Lainie How did you guys get into what was the trigger the spark that made you guys say we belong here? Does anyone can say we want to be here, there's $3.2 trillion at stake. I got that. But what made you guys say we belong here.

 
Lainie Muller 

But I think ultimately, we always recognize that if we had earned the right to keep your home safe, that that should extend to the people within your home. And then how do you ultimately use technology in a way that can not just look at intrusion modeling or automation or different features within our platform? But how do we tie that together and extend it to the people in your home. And in early on, what we recognized is that many of our customers were doing it themselves. They were using our platform, and our Way to start to make sense of the patterns of life that exist within a home. And then that naturally translated to business. And what we found is the same platform that you could use in a home setting to keep someone safe and aware of their activities of daily living, that it also then applied to children. And it could also then be two employees. And then it also then kind of moved into senior living. And what we realized is that almost everybody needs a connected living experience. And when you think about life safety as a service, it could include intrusion modeling and security. But there's a lot of other pieces that are really relevant for the customer experience. And so we started as a direct to consumer brand called be close that alarm.com funded and it was pulled into the platform in 2014 and branded alarm.com wellness.

 
Brian Cooley 

Now, give us a specific of what you use. help someone with health and wellness, you were telling me the other day about all the signals that you see from in the house that you can read as health and wellness that are traditionally seen as security. But if you look at them from a different way, it's like, oh, wait a minute, I can see how this person's progressing.

 
Lainie Muller 

Right? So it's been fascinating. And it was it was kind of a labor of love. My mother in law had Alzheimer's for 14 years. And I always thought being in a background of technology that you could leverage this to make sense of someone's daily activities. So when you think of a security system and you think about the perimeter of a home, you're looking at exits and entries and typically, like you said, its intrusion. What I'm looking at from my perspective, looking at it from a health and wellness view or lens is exits and entries as far as wandering, visiting home care, things like that, that are using the same technology but starting to make sense of what is the pattern that exists here that may never be self reported? That ultimately would allow us to move the model that we use in security traditionally with a panic pendant 30% of our dealers roughly self panic pendants alone. But if we thought if we could tell you not just emergency events that exists in the house

 
Brian Cooley 

 Which is actually pretty rare compared to other situations,

 
Lainie Muller 

well, we started to say, Okay, what are the key things that lead to the loss of independence that our platforms looking at every day and making sense of this data is, you know, are people up in the morning? are they safe inside at night? Do they eat regularly? What does their hygiene look like bathroom frequency? How does that ultimately translate into more than just a personal emergency response system? And ultimately, could we move the entire experience from a reactive solution to a proactive and preventative and passive solution?

 
Brian Cooley 

Now, Andrea, you have the unique position of sitting in the middle of a lot of brands that are trying to crack the code like these two things. Companies have, what do you hear here that you think is repeatable gold for a number of brands? Or things that maybe are one offs that only certain brands can do? Where do you hear some real good themes here?

 

Andrea Palmer 

Yeah, I think for our brands, and we work with everything from pharmaceutical companies, to the cannabis industry, to hospital systems, and all of those brands have different goals, certainly, but what a lot of what all all we're ever trying to do is, is figure out how to help support and drive behavior change. So health care if you think about it, you you're you can be hungry for tacos at any time. So if you if you advertise tacos to someone, and they and the price is right, and you can get there, you might get it, you might sell a taco that day, but at the end of the day, that the purchase cycle for a lot of our brands, whether it means where what hospital go to what product to take, from a pharmaceutical perspective, there's a lot more that goes into the decision making and it's going to take significant behavior change both to get the product as well as To use it correctly. So once you get the product, it's we were talking about this just the other day, that's only half the battle. So the product is prescribed the consumer gets the product that's adjudicated at the at the pharmacy, then they have to take it and they have to take it correctly. And you have to understand if they're actually changing, making the lifestyle changes that that's needed with the product. So we're constantly, I said before, we're reinventing media, we're constantly looking for solutions that go well beyond advertising to consumers or to providers. And we're looking for solutions that can use technology to help facilitate support the patient journey from a from a utility perspective and how some of the new technology and data can play into that brand journey and how to connect the consumer the provider by actually facilitating the behavior change and supporting an overarching kind of lifestyle change because at the end of the day, if you don't change the behavior doesn't really matter if you're successfully adjudicating a prescription.

 
Brian Cooley 

Now with the universe brands and publicist in general, that you obviously have purview of a lot of them, certainly aren't going to be any roots at all in medicine or pharma. Have you had any success stories you can share with us about non health brands that have said, Yeah, I,

 
Andrea Palmer 

I can get a finger on that. Yeah, it's really interesting. So as the as the wellness and health and wellness expert within the group, we're constantly being engaged and brought in on the side to conversations with, you know, tech providers, telecom providers, different different brands that have nothing to do from a like a mainstream perspective with health and wellness, but have a division and some sort of focus on whether it's developing new technology or whether it's installing technology that exists on some kind of a device or something from a mobile perspective. So so we're, we're actually it's really interesting. It's an evolution of our business where his where we've been historically The traditional pharmaceutical and health and wellness brands and now we're the, you know, kind of the the co op, if you will for for some of these more mainstream brands, yeah, we Center of Excellence, right? We're like a center of excellence or a consultant, if you will, for some of the brands that are, you know, do something different, but also have a health and wellness interest or some sort of a passion point of view. So it's been kind of interesting. Brian,

 
Matt Parry 

if I may just build on this. I think it's fascinating. You know, we had a chance to meet last night we had a chance to talk. It's just fascinating just hearing this sort of discussion because this is exactly what we've learned from the customer. The reality is the customer today is hacking, healthcare, health and wellness does not just going to the doctor or just buying a pharmaceutical product. It's now so broad. And what they're desperate for is people to bring those solutions and brands that didn't consider themselves like alarm.com as a health care brand. Or it's amazing how if we can bring the right solution for them. It actually makes total sense in their health and wellness journey because their health and wellness journey So broad and so all encompassing.

 
Lainie Muller 

But I think ultimately we sort of sat back one day and said, wouldn't as an intelligent home or property, be smart enough to support you over time? It should, it would be expected that a supportive home would be able to play into your health and wellness long term, or you live, it's where you spend all your time. And it deepens the connection between you and the people that matter most. And that's really sort of what it is, is how do you protect your family and that has to include their well being and their health and wellness.

 
Brian Cooley 

I hope you heard particularly when you're taking notes, take note of something that Andrea said, which is you hit on behavioral change over and over and over. A lot of this has to do with new devices, of course, interesting new sensors, getting people to comply with their medication, and all of that, but it all drives pretty much behavioral change. We're not trying to replace doctors and clinics and trained medical professionals that which Sometimes the medical industry can bristle at. That's not we're trying to do by pushing healthcare out to other companies. We're trying to innocence avoid engaging with those parties unless we need to, which is a total population wellness goal. And it's all about behavior change. It's not necessarily about putting medical devices in the home, or, or pushing up prescriptions to be particularly more prevalent. But it's about getting in front of these things before they are a major problem. So if you're trying to boil it down all the time, always look for where that path leads to behavior change. I want to ask each of you about how you are going to be genuine in your offer to consumers, you obviously have that as your goal. What have you done to try and make sure consumers see you that way? because consumers will see anybody in today's jaded era as Okay, you just want a piece of this pie. Like anyone else, I have a certain number of health dollars, everybody wants it. What are you doing to come across genuinely because this is not like any other aspect of tech. You've got to really care and be of true assistance. It's not about just shiny object. Where's what's the genuine angle?

 
Lainie Muller 

I mean, ultimately, for us, it's interesting. We don't sell direct to consumer. So we sell to our dealer partners. And what's been interesting kind of to the last point is, when a healthcare provider comes to us and says, I want to become a strategic partner of yours, I want to be a dealer partner of yours. I want to leverage your platform to support my customer. So an example would be certain states that now have IO waivers where they do technology first. These are not people who are in the security business. They provide care to developmentally disabled populations that are living in their home that need additional support and connection. They will use our platform to be able to keep someone safe and extend their independence at home. That does not seem that seems very generic. They're leveraging our platform and artificial intelligence to be able to To deliver care to the population they support.

 
Brian Cooley 

That's an interesting aspect that you've got as alarm come in that you are carried along as part of someone else's message. Right? So they are their partner with you in a genuine approach, and presentation. Are you always white labeled? Or does the customer know that this service I'm getting is powered by alarm.com.

 
Lainie Muller 

We do have white labeled experiences. And I think to your point, we have a broad profile of what our partners look like today. It's changed over time. Traditional security has, we have an NSP division, which is network service providers. They work with telcos and different providers that ultimately are looking to leverage security and smart home and extend their reach, which then leads into health and wellness. So an example you know, would be kind of the changing landscape and recognizing that accessibility and population health and those don't always have to be able to be managed by care providers that are professional in the care of space. But all of us are parents, all of us are children to a degree. And we are responsible for the safety and security of our loved ones. And so it's a natural extension for a lot of our providers.

 
Brian Cooley 

And you're a sandwich generation member, right? That's right. Yeah. We got those dependents, the ones that are older than us, our parents and the ones that are younger than us, our kids. How many of you are sandwich generation? You're taking care of your young? And your folks? Yeah, it's a really, it's a trend that is still growing as we're seeing those bands of age. Right now. They're all peaking to create sandwich of people of an age to have both those family loves. Matt, tell me about genuine approach. Walmart is seen so strongly. We know Walmart is I mean, that's a real clear brand, everyday low prices. Yep. Got it. How do you expand a brand like that? Not deeper into everyday low prices. But over here?

 
Matt Parry 

Well, first of all, you know, you want to draft off where you've got your accelerants which is low price. And so if you go into talk to customers accelerate. I like that. If you go and talk to customers today, probably the first thing they'll say is healthcare is too expensive. And it's not just the price. It's a transparency. I suspect virtually everybody in this room with insurance without insurance or whatever has gone and not known exactly how much they will pay or had a surprise bill later. And so firstly, cost is a critical component. But back to your question about, you know, how do you be genuine in this space, we learned very quickly, there's two other key pillars. One is convenience. And that means things like ours access digital components, you know, the ability to schedule you can schedule your life today from your smartphone. It's never easy. I don't know if other people have it, but it's never easy to schedule your medical providers from your smartphone. So that's convenience, but probably the most important aspect is care. It has to be trustworthy, credible care from people who genuinely care and offer high quality care and so we always said in this model, people will come once for price, but they'll come back for the care and the audience. And that's something we built in from the start in this model is that we need to show that this is the heritage that Walmart has in low price but we offer you know, a full scale convenient caring solution for them.

 
Brian Cooley 

Because the origin of everyday low prices and the low price legacy, whatever the tagline is, is truly to help customers live better. That's original Sam Walton DNA, right? That's right. So there's a line there. If any of you have not, most of you are not familiar with the clinics that they've just started launches two of them so far. There's one so far the second one's I think, Dallas, Georgia, the other the other big D, the other D But would you go in there I've not been but I've seen a lot of the photos of it. There is a pricing menu on the wall and it's not negotiable. It's not estimates. These are the prices. And that's it. Only one that has an asterisk I forget what it is. One can slightly float but all the rest are like it's 40 bucks for this 200 for this

 
Matt Parry 

and customers have told us they've Gone in. And they've just been, you know, blown away that first of all, we've had many customers who've come in as not seek have been able to have care for 1015 years. And it's not just primary care, it's dental. We also have behavioral health at $1 a minute, which is about a third of the price of anywhere in the market. But it is that for transparency, you know, people have literally said, I can't believe it, it was $40. And it's $40. And, you know, they, they, they imagine they're going to get a bill. And so that transparency is really connecting with them. And the ability to go choose, you know, you know, these busy families have busy lives and the ability to say I want to go and see a doctor tomorrow at 7pm because most doctors close at like five or six and be able to do the schedule the appointment with only three screens and 10 clicks. It's something that is really connecting with them.

 
Lainie Muller 

And I think to your point, I think that that's so important is to make it convenient, and if it is low cost and there is transparency, you will affect change because they will come back, you know, and they'll start To understand that it's not a hidden bill where there's item costs, and it will change their health over time.

 
Brian Cooley 

Andrea, from the agency point of view, there is nothing new about genuine brand promise, right? There's one the oldest pages in the book, you guys would know a lot about how to make sure that when you're doing a health message is genuine. Is there anything else that we're not covering in these two attributes?

 

Andrea Palmer 

Yeah, actually, so so I think what's interesting about now is is the amount of information out there and and how many different places you can get it? You said, consumers are hacking the healthcare system to some extent and and i think that's super relevant here because consumers are walking into the provider, whether it's a retail provider or a primary care provider or a teller provider, and they're already informed. So they're putting together their own healthcare story based on what they're reading out there based on what some influencer said. Somebody said on a Social Network what some article said that they read. At the end of the day, quite frankly, you could probably make almost anything true, you could probably you could find enough facts to substantiate whatever story you want to tell yourself. what's what's interesting about authenticity, especially in media, on our side of the fence, I don't build the ads. But what we do do is figure out how to use that media footprint, the media landscape, all of the different editorial teams, content providers to figure out how to create a narrative through storytelling, that is accurate, that is, that is properly researched, that is true to the brand that is full of facts and not opinions. We've we take it so seriously that we've actually created a solution called validated by which is our, you know, approach to making sure that the providers and the and the suppliers that we're working with from a media perspective are going through the appropriate rigor to make sure that the stories that we're aligning our brands to are true, and they're factual and they're researched. And there

 
Brian Cooley 

that's interesting is that unique to the health side?

 
Andrea Palmer 

it is at the at this moment in time it is because health is so different. So if you go in, and what you know, the I think it's like an average of 80% of consumers who walk in and ask for a product will get it from a doctor, that's great. If it's if the information is accurate, that's not so great if they're coming in having created a narrative full of non facts, or that you know, the false false truths out there. So we have a responsibility from a marketing perspective and a media perspective to lean into that. So it's not just about, you know, being maintaining the right brand identity from an asset or a creative perspective, but it's about how we're aligning with the right brands and the right stories in the media, because that's where people are doing research. They're not it's not like they're just seeing an ad and taking it. Yeah, you know. Absolutely. I saw on TV that I should go talk to my dad

 
Brian Cooley 

A profession can bristle at a lot of the the informational trend of the empowered consumer today has some people in the medical community saying, Okay, I've got people coming to me as customers, not just as patients Now, coming in, I saw this and I'm told I should ask you for it. And I'm almost telling you, I want this pill, or I want this device. And that's going to be a touchy relationship with the medical community who we do not want to create any gulf between these frontline. I consider these to be frontline efforts of the future. And next line efforts, which is the medical and clinical community, we can't have any friction there or they won't trust what you guys were throwing off or providing and they start to lose ground.

 
Lainie Muller 

And I think traditional healthcare me now the more you hear about the medical home, I mean, so much of it is moving to the home. People have so much more information that's available to them. Being able to tie all of this together is going to be critical. Not only at the personal level of the professional, I mean your doctor, care as a service is going to be real where virtual care So they may already have someone they may never walk into a doctor's office. Yeah, you know, so all of this is going to matter, and it's gonna change the landscape and probably the trust.

 
Brian Cooley 

Lee, speaking of trust, you just brought up the amount of data and the various sources of data that makes all this magic work. Did you give us a stat, can you can you quote that stat, the number of customers you talk to, as you guys were, I think ramping up clear.

 
Matt Parry 

I mean, we sold to 27,000 customers,

 
Brian Cooley 

right. 7000 in a short amount of time, in six months. Yeah. I mean, that's the kind of scale wasn't

 
Matt Parry 

all qualitative. It was some quantitative, but it was I mean,

 
Brian Cooley 

some people had some say, That's exactly right. That's big data. When we look at that kind of amount of data either in survey in ongoing sensing in the huge troves of data that any global agency group has, we get to the issue of the year and that last year in this coming year, which is privacy and security. We have a historic level of consumer sensitivity right now about Internet security and privacy and I could not say that Much anytime in the last 25 years in the history of the internet, this is the peak so far in terms of sensitivity around this, we all know it, we all feel it. We're all consumers, not just pros. And yet these initiatives are rolling out at the exact same time, yet kind of couldn't fly into a bigger storm. So what do you do as you're progressing? What conversations have you had internally to say, here's how we make sure we never step in it and terms of data and by the way in healthcare,

 
Matt Parry 

you know, you layer in or the government for HIPAA, all of that. You know, there's, it is a myriad, I mean, so sorry to jump in. But you know, the reality is, first of all, we have very strict standards in Walmart in terms of data and privacy Anyway, you then layer on our standards in health and wellness and it goes up a notch. I think it's a really interesting tension though, and this is to say, this is something we're evolving into, because you absolutely have to have not just the gold standard, the Platinum standard of privacy and data management, but at the same time, the customer is desperate For us to connect the dots for them, they want us to be able to connect what they're buying, what their customers have told us this, what their prescriptions are, you know, a diabetic would love to know how to buy better. You know what products they're buying, should they swap out this peanut butter for that peanut butter? Can they do it, they are desperate for a big data solution to help them live their lives and live better in terms of their wellness intentions. But you've then got the you know, you've got the restrictions of the world. So it is a huge problem which everything everyone is trying to figure out how do we use data in the right way for in the way that the customer is happy with to help them find healthcare solutions?

 
Brian Cooley 

planning what do you guys do and make sure you don't screw up on data because one mistake it's remembered for a long time by consumers

 
Lainie Muller 

know it's a really big deal. We take it very serious. And we did become HIPAA compliant. You know, that took us that was several years ago went through that that standardization. It was a requirement to to even really be In the space, to be honest, it is sort of where it has to be today. We don't sell our data. I mean, I think there's so many different things around healthcare data that even elevates it. It like safety is very serious. Yeah. So it's it's something that is akin to our business. True. It's not totally new to you guys, this is you've always been in a pretty sensitive area of information, right, knowing what's going on in someone's house, what's happening around the perimeter. And then I'm a little more scary, I think, over time with smart home and you hear about these breaches and selling data. And so I think in healthcare, it's critical to have you know, HIPAA behind you have to be so careful. And you have to go through all the procedures. It's a big undertaking,

 
Brian Cooley 

and I like the fact that there is HIPAA and federal regulation, although I know that creates all kinds of headaches and red tape and doesn't move as quickly as you guys can. But it does give consumers that feeling that there was some adult supervision, which you can't say for every sector of tech, right. Not every sector of tech has regulators overseeing it as much as they can get in the way it is a seal program that people feel at least if it's not The most progressive tech, it's at least safely backstopped against burning them, they get a certain appetite, there are certain technologies out there that I won't necessarily name specifically right now that are begging for adult supervision, yes, they will autonomous cars, consumers will look at autonomous cars and say I don't think I can't proceed that anybody's minding the store here. I'm not gonna trust a car maker because they don't agree with each other. That's a red flag. But as I see this regulatory layer, just from my point of view, I know it's a headache for you and your brands. But boy, it's good can be an asset to as you roll forward. Now, the the seal program, you talked about Android, which is all about credibility and genuineness. Does that also have a component or a separate a separate program that deals with privacy and security differently than you already do as a big agency?

 

Andrea Palmer 

Absolutely. I mean, it certainly if you think about when you get car inspected, there's like what 200 right. So so

 
Brian Cooley 

that's what I feel like when I get it.

 
Andrea Palmer 

Okay, so certainly a section to look at how data is used and whether or not they have the right data use rights and whether we have the right and the proper lighting. is between the companies to use the data properly. I think that's really important and something that everyone does. We have a we have a pretty significant team. That is HIPAA compliance experts that deals and has dealt with health care patient level data for 35 years. I mean, some of my folks have spent years at companies like an STI wilter, score, IMS, IQ via stuff like that before coming to the agency. So their background is in health care, patient level data, and how to handle it. So we've got the compliance, the level of compliance to help us understand and just just make sense of the regulations, whether they're implied regulations or their actual regulations, because right now, there's still a lot of guessing in terms of what the meeting and our interpretation is, and some of these things that are coming out. But it's really important, I think, to stay on top of you know, what, what those decisions become as well as to how to how to find Ways at the end of the day, what we're trying to do is connect point A and point B, right? And how we do that might change with as some of these regulations change. So, you know, the the segmentation that we've been able to do might change the sources that we that we are able to use might change, the way you can knit them together might change. So all of that has to be kind of that evergreen, ongoing learning. Because everything, you know, what we did six months ago, or 12 months ago, has totally changed. So I can only imagine what's going to continue to change over the next 12 months.

 
Brian Cooley 

Now, without going too deep into the plumbing of ad technology and data. permissions like you're talking about, we have of course, GDPR is still fresh recent history. ccpa has been in effect for a few days now in California, then you've got health regulations as well. A lot of layers in the stack here. Is there anything that we should be aware of as a roomful of marketers in terms of how we view first party third party, and there's this concept of zero party data in terms of what those terms mean around health?

 
Andrea Palmer 

Yeah, I mean, so I just learned the term zero party data a couple of months ago. Well, for it's my understanding, and hopefully I'm not too, too wrong, but it's my understanding that it's the proactive. It's a subset of first party data. And it's the, it's the, the proactive kind where consumers actually sort of proactively say, give a brand, an idea of what data they'd like them to use. Yes. To some extent, I probably poorly explained that. But I had just learned that but I think for us what changed, like the industry has largely been reliant upon third party data for a long time because you walk into a meeting and everybody's got some sort of data set to sell you or to say that they have and that's great. But I think as some of these regulations change, brands are going to be more and more reliant upon first party data. And they've always a lot of especially pharmaceutical brands, but health care, health care brands, big institutional brands have a ton of first party data, but they don't necessarily do a ton with it. third party data for whatever reason has been a little bit more in the driver's seat. And I think what's interesting, and I would say opportunistic, although a little bit of uncharted territory, ironically, is how we're going to shift from relying more on third party data to actually going back to where first party data kind of rings King. Yeah, so I think it's kind of interesting that that's not the case. But at least from where I sit, we've got a lot of brands who rely much more on the third party than first party, even though that's something that they own and should have more theoretical insight into.

 
Brian Cooley 

Interesting. Okay, so that matrix is shifting a bit. Part of being in health and part of being in the changing winds right now, in general. Think about this as our second to last question a few minutes left here. I'm going to be asking you as we close up what's on your to do list for 2020. So get that percolating. Before we get to that though, I want to ask, let's not be coy about this. How are we getting paid here in this world where payers are different in many cases than non health because we have big payers unified payers. And of course, some direct pay from consumers, how would each of your businesses is paying and getting paid for your service different in this health area than it is in everything else you do? So let's start with with warm I mean, that's that's consumers coming in and spending money on the clinic, how is it different?

 
Matt Parry 

So I mean, you articulated it, which is this whole healthcare industry has been built around the insurance industry in the paying in this industry. You know, when we build this model, and and you know, what Shawn envisions is we are going to disrupt this and go straight to the customer. Because there is a lot of, there's just a lot of opportunity in that space. So we were actually retracting back from that model back to putting power back to the customer to choose because 80% 80 to 90% of their healthcare costs of stuff that usually isn't covered by their insurance anyways, the day to day deductible costs, the CO pays, and they're paying huge amounts of that. So actually, we can offer a better option by doing that. So we're retracting a little bit to swimming upstream, if you like and disrupting the conventional

 
Brian Cooley 

Do you accept insurance at the

 
Matt Parry 

And we will take it. And if you if you have insurance and you come in, you can pay zero if you've hit your deductible and annual co pays. But you know a lot of our customers are coming in and they're paying cash prize because it is much more affordable for them to do so.

 

Brian Cooley 

And as you set your prices, are they necessarily in sync with payers because players have that they rule the roost on their own codes and pain and payment levels, but your prices seem to be ruled by what Walmart customers will value?

 
Matt Parry 

I mean, we spend a lot of time talking to customers and working with pairs and all this stuff. But you know, we've actually come back to what Mr. Sam Bell, which was when he opened those first senior centers, he was like, how do we bring great products at a great price to our customers? And that's what we focused on? How do we bring affordable health care, great quality, affordable health care to people who don't have access to it? And that's what's driven our pricing strategy.

 
Brian Cooley 

Let me push a little further. Tell me if you can answer this. Are there loss leaders on that price list?

 
Matt Parry 

Yeah, I mean, like, you know, this is still a prototype. We're working on different things. You know, we we've worked on Hard to make sure that you know we're a business at the end of the day, we're not in the, we're not in the business of giving away money. And so, you know, we are working to get a situation that rewards our customers and helps customers have affordable health care, but at the same time is accredited to the business. As most business knows there's a growth period, there's prototypes, you're testing different things. So, yeah, we're working through those phases now. But you know, fundamentally, we're business, we're shareholders that want to have a return on that investment.

 
Brian Cooley 

Alright, so the clinic is your clinic effort will be a sustaining business, not like one of your competitors that has those hot dogs at a loss because it makes the store look like a better experience. But this is a bonafide business, not just a way to put a better shine on the store,

 
Matt Parry 

right? I mean, it's a standalone business but at the same time, you've made a great point, which is, this is part of the ecosystem like people today, we have 150 million shoppers who are coming in. This is a convenient opportunity for them to combine a trip to pick up groceries, get their health care, get some glasses, whatever So, you know, there is obviously a big ecosystem play in terms of making customers life easy and saving the money

 
Brian Cooley 

aligning with your provider level relationship with the people that I actually get the service from. Do you see much of a difference in the revenue model with this being a health thing? Are the big payers even involved in the services that you offer at this point in history? Is that down the road?

 
Lainie Muller 

Well, it's a wide range, actually, we have specific health care focused partners, that would be looking at reimbursable models. And I think when you start to look at what are you competing with in this space, and I think this sort of speaks to what you're talking about is it's not necessarily the same as security. What you're comparing it to is putting off the need to move to an assisted living community, extending one's life at home, what are the costs associated with that? or paying 19 to $30 an hour for direct care in your home? You With a minimum of what three hours for someone to drive to your house, you're at $90 a day. That's expensive. You know, most people are not paying that for security. So healthcare does have a little bit of different pricing structure, when you start to look at it, because you're comparing it with much more supportive environment or direct care. And to your point around trust, I think it's also interesting. What we found is where does the trust lie? Because when you're dealing with a health care provider, in a smart home, professionally monitored installed system, there's someone who operationalizes this and makes this work and provide support. There's a monitoring center that's going to ultimately provide response emergency response. And then there's also typically people who are now looking at virtual care. How do we make sense of this data? They typically do own the trust with that customer in the sense that they are responsible for their well being in care. Yeah. So there is different ways that you're starting to see people Relationships play out. That's new.

 
Brian Cooley 

Andrea, from your point of view, again, with so many brands that you're watching into this thing, what's the discussion around? How brands get paid for being a good health partner? Got it. They're good health partner. We've talked about genuine. We've talked about services that make sense for the brand and all that, but the payments can be different.

 
Andrea Palmer 

Absolutely. So one of the most interesting things about our industry is, is how the transaction is completed. So the transaction obviously, that the payment, but we were talking about this just last night, but in order for a health care in pharma, at least the in order for the transaction to be completed, that everybody has to buy it and there's, you know, four or five stakeholders that have to buy into that, to make that transaction real. So the, the, the consumer has to believe in the product, they have to be willing to take the product, they have to be adherent to the product, the prescriber has to actually decide that they're going to write the product, the payer has to cover the product, the pharmacy has to stock the product

 
Brian Cooley 

like buying a new smartphone,

 
Andrea Palmer 

it's really not There's and you know, those four or five different stakeholders, if one of them falls apart, the transaction doesn't happen. So so the complexity of how the marketer and how brands have to think about that that ecosystem and that sphere of influence is really critical. Because if even one of those things, let alone more than one of those things isn't working, if it's sending someone down the wrong path, or or it's, you know, if there's a barrier there that that can't be overcome through pricing or advocacy or, or what have you, that transactions are going to happen, no matter how good the marketing is.

 
Brian Cooley 

It's like a five legged stool, but even with one leg, it can fall down,

 
Andrea Palmer 

it can fall down. Yeah, exactly. So it's just a different, you know, I can't think of another industry and maybe somebody can prove me wrong, but I can't think of another industry that there are that many stakeholders where if one doesn't happen, you run the risk of that transaction being nullified right off the bat. So it's just really fascinating. So I think in order to get paid there's a lot of things that have to come together and but and when it when it does obviously the magic happens in the end that's when outcomes are right the patients help the provider has a better practice outcomes, everything works well. But But at the end of the day, it's very easy for something to go off course. And or you can do every almost everything right, but that one thing that you skipped, could really could really change the six is

 
Lainie Muller 

That early on, recognizing that there's oftentimes two buyers, you've got the older adult themself oftentimes or the patient, and then you have their children who wants something different.

 
Brian Cooley 

Oh, right there. So there's this there's

 
Lainie Muller 

other layers that exist even in who buys this.

 
Brian Cooley 

And even in selecting the product before the payment even comes up, the child may say I'd like to get a camera in here so I can keep an eye on you. The other one pushes back great, powerful technology like we were talking about. You can learn so much nuanced information. From just seeing someone, but all you need is one or the other to say no, that's weird. And there it goes that in our last minute and a half lightning round. I'll start with you, Matt, work toward me. What's on your to do list? For 2020? Yeah, roll with health and wellness,

 
Matt Parry 

real quick lightning round two things, one, continue to improve our base business for 425 million prescriptions and make that less wait time easier to get and then keep innovating and healthcare. The clinics are just the first step and

 
Brian Cooley 

you have one clinic now one more opening. Do you have a number on how many you'll have by the end of the year?

 
Matt Parry 

still developing?

 
Brian Cooley 

Okay, good to know. Andrea, what's what's keeping you awake at night for the year ahead?

 
Andrea Palmer 

Yep. So with all the different changes in data, technology, etc, I think we're really focused on what are the right new products, partnerships, technologies to bring into our business that are going to help our clients in ways that have never, we've never needed before. So really solidifying the new wave of partnerships.

 
Brian Cooley 

Okay, Andrea, Lainie, you get the last word.

 
Lainie Muller 

So for us, I would say Steve Jobs Our VP of product is somewhere in the audience. I have to get this right. But I would say I think we spend a lot of time thinking through not just at home or at work, but on body and on person and deeper into families, and how does your health sort of how is this a part of your life where it's always present, it's not limited to just your house, or just your business. And, and really, we want to make sure that we have thought about products that are really deepening the connection between families in their health and their well being well before things are broken.

 
Brian Cooley 

Very good, guys. Thank my panel, what a great bunch of insights on how your brand can must should get attached to the health revolution. Thanks a lot, everybody. Enjoy the rest of the conference.

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