Electronics retail giant Best Buy (NYSE: BBY) is planning to rapidly scale its health care segment, which is broadly aimed at helping seniors age in place through remote patient monitoring.
The Rochester, Minnesota-based company reemphasized its focus on increasing the amount of seniors they serve on a third-quarter earnings call with investors and analysts last week. The plan is to serve 5 million seniors through in-home health monitoring by 2025, a significant leap from the 1 million they currently serve.
Best Buy CEO Corie Barry briefly discussed specifics of his company’s health care plans during the call.
“Today, most of the seniors we serve are utilizing easy-to-use mobile phone products and connected devices that are tailored for seniors and come with a range of relevant services,” Barry said. “With our five-star service, customers can talk to U.S.-based specially trained agents who can connect them to family caregivers, provide concierge services and dispatch emergency personnel.”
Best Buy’s technological capabilities in the health care space are in large part due to its acquisition of GreatCall, a health technology company, in August of 2018. The acquisition cost Best Buy $800 million, but is expected to augment its overall earnings in the near future.
In addition to scaling its health care arm, Best Buy is also looking to forge closer ties with insurance providers, according to Barry. Strategically, that window of opportunity is open wider than ever before, as Medicare Advantage (MA) plans now have flexibility to cover a variety of in-home telehealth services, especially when serving members with complex and chronic conditions.
Analysts have likewise been bullish on Best Buy’s health care strategy, and Morgan Stanley analysts recently explored the topic in a September report.
“We don’t think the market fully grasps Best Buy’s commitment to health,” Morgan Stanley analysts wrote. “In our view, Best Buy is assembling what could prove to be a formidable ecosystem focused on senior health, which it can use its nationwide footprint to scale over time.”
Best Buy is coming off a very strong third quarter, reporting enterprise revenue of about $9.76 billion, an increase of about 1.7% compared to Q3 2018. For the fourth quarter, Best Buy is anticipating enterprise revenues of $14.75 billion to $15.15 billion.
Health care will continue to drive those financial results moving forward.
“We have reiterated our focus on helping seniors live longer in their homes through our unique combination of tap and touch, thereby reducing their health care costs and bringing greater peace of mind for them and their families and caregivers,” Barry said.