In the weeks since Amazon announced their acquisition of One Medical, there has been a tidal wave of hot takes about the deal. While we aren’t in the position to say whether this move was good or bad for healthcare in general, we do believe it’s a clear indicator of Amazon’s plans. The company is firmly positioning themselves as part of the healthcare industry, and even without doing anything significantly interesting or innovative, they will drain customers away from existing pharmacies and urgent care centers. As Amazon grows their healthcare business – and they surely will – health plans, PBMs, DME companies, and everyone else needs to learn to compete with Amazon’s way of doing business.
Speed and Ease
Why do people turn to Amazon for their healthcare needs? It’s simple: American healthcare fails to address patients’ basic needs. As Laura Mauldin wrote in her article, “Care Tactics: Hacking an Ableist World,” “Amazon has become a de facto medical supply company, providing access to materials quicker and more cheaply to doorsteps than almost anything else.” Patients can’t wait weeks or months for their insurance plan to get them a wheelchair. With Amazon, they can get a passable product in a few days.
Patients’ desire for quick delivery and easy ordering can’t be underestimated. After all, no matter whether someone is waiting for a walker that will help them regain mobility or an antibiotic that will help them kick an ear infection, patients generally want to get better, sooner. If they're financially able to do so, they're willing to pay out of pocket for that. Plus, there’s an added bonus: the patient or their caregiver gets to choose the products they want, not just what insurance will cover.
Amazon also offers hands-free virtual assistant/smart speaker combinations like Alexa and Amazon Echo that have become essential disability aids for many patients. Of course there are other virtual assistant/speaker combinations, like Google Home, but Amazon has streamlined shopping through Alexa. Imagine: a patient with cerebral palsy is faced with the burden of going to a brick-and-mortar store for their prescriptions, which is a physically taxing and time-consuming activity for them. Or they have the option of simply saying, “Alexa, refill my prescriptions from Amazon Pharmacy.” Which do you think they will choose?
How to Compete
Every healthcare entity should consider Amazon a potential threat, even if Amazon isn’t currently operating in their specific area. After all, as a 2015 editorial by Dennis Bolin of Health Plan Alliance states, “customers’ expectations are shaped by Amazon.” That still holds true, even seven years later.
Health Insurance Plans
Plans need to invest more time, strategic planning, and money in improving the patient journey. To put it simply, don’t make it difficult for patients to understand and use their benefits. If dealing with their insurance is too burdensome, they will likely take one of two routes: giving up on their health or taking their care into their own hands.
Patients who give up will skip preventative care appointments and may stop taking their medications. They may have lower healthcare utilization temporarily, but will likely present with more serious or chronic (i.e., costly) problems later on.
Patients who take their care into their own hands may begin using direct-to-consumer platforms. They will buy medication out-of-pocket, making it nearly impossible to track their adherence to therapy. This silos their care, makes it difficult to measure the success of patient support programs, and can drive down CMS Star Ratings.
To avoid these negative consequences, make the patient journey easier. For example, consider implementing prescription delivery, even if patients already have access to a mail-order pharmacy. This gives patients the ability to choose their own pharmacy, start therapy more quickly, and overcome many obstacles to medication access.
Pharmacies, Hospitals, and Providers
First, as Andrea K. Leigh recently wrote for Drug Store News, consider your own strengths first. Trust is an important one: patients know they can trust their pharmacists and doctors. They also know that many Amazon sellers are frauds selling knock-off items or running scams. Leverage that knowledge: remind patients that you will help them get the care, medication, and supplies they need.
Ensure you’re stocking the right products. Take a look at your customer base. Do you have a lot of patients with chronic illnesses? Offer the supplies they need to maintain their health, like needles, blood pressure monitors, or CPAP cleaning tools.
Make life easier for patients by offering home delivery. Team up with ScriptDrop for same-day, on-demand, or shipping, or start small with an in-house driver. (Even if you have your own courier, you can still use ScriptDrop’s software to keep you organized.) This can be a lifesaving solution for homebound or disabled patients, but it will also win new patients to your business. These days, everyone can benefit from the convenience of delivery.
If you’re particularly ambitious and have access to a software developer, use Amazon’s own technology by creating an Alexa skill for your business. This can make it easier for disabled patients to call your pharmacy or office, request a refill of their prescription, or request delivery.
Takeaways
We can’t say for sure what Amazon’s plans are for healthcare, but it’s clear that the industry should not underestimate them. After all, let’s not forget Amazon’s brief foray into the health insurance market with Haven. Granted, Haven failed, but Amazon’s One Medical deal shows that the company intends to keep expanding regardless of the risks. For example, Amazon could acquire a hospital system in order to develop their own closed-loop model, like Kaiser Permanente. While that’s purely hypothetical, it’s not outside the realm of possibility. Amazon has immense resources and global reach that allows them to fail until they learn enough to succeed.
For that reason, every stakeholder in the healthcare industry – pharmacies, primary care and specialty providers, PBMs, payors, DME suppliers, pharmaceutical manufacturers, distributors, and everyone else – needs to keep an eye on Amazon. Play to your strengths, invest strategically, and remember who is at the core of your business: the patient. Improving the patient journey has valuable downstream effects and will keep you competitive.