Is There a Gorilla in the Amazon Healthcare Jungle? Maybe.

There is endless commentary on Amazon’s entry into health care.  The intensity of the rhetoric was further amplified by announcing that they will join forces with JP Morgan and Berkshire Hathaway to create a health care firm that will focus on cutting costs for their US employees.  Nothing new so far; however, do Amazon and friends have something that Walmart or Caterpillar don’t have to tackle the high cost and complexity of health care?  Amazon has a strong history as a market disruptor, how could they affect health care differently?

Whatever the company decides to do in health care will have some impact on patients. Some have speculated that “Amazon could help the industry move from one treatment for all to treatment and medication just for you.” [i]  On the other hand, others would argue that health care is already local and very much personal.  Care is not just about esoteric diseases and expensive treatments.  In fact, the CMS initiated Medicare Shared Savings Program (MSSP) features a variety of Accountable Care Organizations (ACOs) that rely on the personalization of care to achieve the Triple Aim of better care, reduced cost, and higher patient satisfaction.  It is hoped that Amazon has already discovered that change that matters happens at the bedside or at the examination table and not in the board room or the corner office.

It would make sense for Amazon to take the long view on disrupting the health care market.  They have the immediate capacity to impact biopharma, health information technology with their cloud access, and durable medical equipment (DME).  In fact, Amazon already sells DME on their website.  Walmart also offers DME at significantly reduced cost impacting an industry that carries a checkered history of fraud and abuse.

Amazon recently purchased a small mail order prescription distributor called Pillpack.  This may be a “harder nut to crack” in that many patients trust their pharmacist along side of their doctors at a high level.  Mail order pharmacy has been around a long time, yet still only commands a small segment of the market.  Pillpack does have some logistical advantages, but what about the pharmacy benefit managers already in place?  Disrupting pharmacy in cost and delivery systems is a reasonable early Amazon tactic as part of a grand strategy.[ii]

Will Amazon be able to sweep the market with new and innovative data services to identify problem patients and get them to care sooner?  Will they revolutionize voice activation and relieve doctors of checking boxes in a restrictive electronic medical record?  On the other hand, do consumers want giant companies like Amazon to manage their intimate health care data?  Has the recent Facebook fiasco precluded giving tech giants access to personal data?

While some argue that “the health care industry is too firmly established in the way it now does things to be turned on its head overnight, even by Amazon.”[iii]  That argument could be refined and reinforced by the cultural and personal forces that drive the care we receive. Pushing more responsibility toward the providers at the bedside may be the answer, holding them accountable for the care, cost, and the prescribed quality outcomes.  While the ACO may only be the “training wheels” for the future model of care, it nonetheless presently keeps health care personal and local.

So if the cry of the Amazon Gorilla seems far off, it would be good advice to pay attention to this market innovator and disruptor, or the next thing you may hear will be, “the Gorilla will see you now.”

[i]  Christina Farr, As Amazon moves into healthcare, here’s what we know —  and what we suspect — about its plans,

[ii] Rosemarie Day, Viewpoint: Amazon will have a hard time disrupting healthcare,

[iii] ibid

Craigan Gray

About the Author

Craigan Gray, MD, MBA, JD

Dr. Craigan Gray, Salient Healthcare’s Chief Medical Officer, brings rich experience from private practice, hospital leadership, and governmental health-benefit programs. Prior to joining Salient, Dr. Gray was director of North Carolina’s $12 billion Medicaid program. His time as VPMA at Bon Secours Our Lady of Bellefonte Hospital in Kentucky was distinguished by moving the facility into the top-quality performance tier for Health Grades and CMS health quality indicators. Dr. Gray is a Stanford University trained Obstetrician/Gynecologist. In addition to an MD degree, Dr. Gray holds an MBA degree and a JD degree. He is a Certified Physician Executive and is published in various medical journals.

Leave a Reply

Your email address will not be published. Required fields are marked *