Amazon’s foray into healthcare has been a constant story throughout 2018, and the company has been exploring various avenues to become an industry leader. Earlier in 2018, for example, Amazon aligned with Berkshire Hathaway and JPMorgan Chase to form a healthcare company, which will focus on health technology and providing high quality, transparent healthcare to their cumulative 1.1 million employees in the US, as well as their families, in a cost-effective manner. This comes alongside industry knowledge that Amazon has created a secretive, elite team called “Grand Challenge,” also referred to as “1492“ and “Amazon X,“ which is working on a project dubbed “Hera.“ This project is an initiative to gather and synthesize EHR data from various organizations, analysis that is expected to reveal trends in misdiagnoses, coding errors, and more.
Additionally, in a recent innovative effort from Amazon Web Services engineers, the team rolled out Amazon Comprehend Medical, a project that leverages machine learning to extract and compile insights from various types of supporting clinical documentation beyond the EHR, such as transcriptions and imaging reports. This could be particularly of use to healthcare professionals when they consider disease-specific therapy options or need to make quick decisions. Other benefits could be gained for healthcare professionals coordinating clinical trials, overseeing coding workflows, or managing revenue cycle operations. The deep and detailed analysis produced by Comprehend Medical is expected to save time and reduce costs for hospitals, according to industry reports, while promoting patient self-service options, such as scheduling appointments or confirming insurance eligibility. Amazon has already applied machine learning expertise to a partnership with Fred Hutchinson Cancer Research Center, which built cloud-based software to act as a repository for cancer data and research. The Amazon cloud has been leveraged for healthcare in other ways as well, such as by hosting claim tracking for Change Healthcare, described further here.
Amazon also is well-positioned as a marketplace leader in the Internet of Things with its Echo devices and their voice, Alexa. While company leaders are pushing for Alexa to become entwined with consumer healthcare needs, HIPAA compliance remains a concern. The company advertised its desire to hire a HIPAA compliance lead in early 2018, though it is unclear whether the role has been filled. If the company could solve Alexa’s HIPAA concerns and release a compliant service, it could help healthcare providers document patient interactions, transcribe clinical notes, deliver medical information to patients, and more. As per a CNBC report, efforts to integrate Alexa with the digital health landscape are ongoing and appear to be focused on chronic disease management.
While those goals remain unfilled, Amazon is connecting with patients in other ways to build its reputation as a health-focused company. For example, in March, Amazon announced it will provide deeply discounted Prime membership to Medicaid beneficiaries, an offer it had already extended to recipients of other government assistance programs for low-income individuals, such as the Supplement Nutrition Assistance Program and the Women, Infants and Children Nutrition Program. In light of the company’s 2018 acquisition of PillPack, which has licenses to ship drugs to nearly all 50 states, offering discounted Prime membership could be a first step toward creating drug supply relationships with low-income patients. Those patients potentially could benefit from low- or no-cost shipping on prescriptions, and procuring drugs in this way also could reduce supply chain costs for health systems who might treat those same patients.
The partnership with JPMorgan Chase and Berkshire Hathaway could be a proving ground for prescription drug distribution, according to industry reports, and further developments with that initiative could hint at Amazon’s broader plans for the healthcare industry as well. The announcement of that partnership caused the market value of major commercial healthcare providers, insurers, and pharma companies to tumble, suggesting future healthcare services from Amazon could significantly disrupt the industry and claim a large market share.
Amazon’s foothold in the healthcare marketplace is strengthened by its existing database of comprehensive online shopping customer records. Amazon is familiar with the spending habits of a large segment of the population, and therefore has knowledge of many aspects of their lifestyles, and were those consumers to become Amazon patients as well, the company could have insight into many of the social determinants of health that make it difficult for traditional providers to achieve optimal outcomes with patients. The company also has a reputation of price transparency and user friendliness that made it a master of online retail, which might make it a natural choice for some consumers to select Amazon to meet certain healthcare needs.
That transition however, would have hurdles. Amazon’s lack of experience and expertise in healthcare could mean the company would need a while to adjust to the nuances of a vastly fragmented industry, even with the help of experts. Additionally, business-minded Amazon leaders tasked with patient-facing healthcare initiatives would encounter a payment culture vastly different from online shopping. HBI 2018 survey data shows that 93% of respondents collect 65% or less of dollars owed on out-of-pocket balances from insured patients, and 87% collect 8% or less of gross charges from uninsured patients. In 2017, charity care and bad debt write-offs reported by HBI members to the Revenue Cycle Scorecard each averaged roughly 2.1% of gross revenue, and 2018 monthly performance has showed write-offs have generally remained at or above those levels. In the wake of rising out-of-pocket healthcare costs, experimentation in providing services to patients likely needs to be approached with caution if profits are a priority.
With that being said, there are already predictions that Amazon could become the world’s fastest growing healthcare company, and from what we have seen until now, the company could be only scratching the surface of possibilities in its pioneering efforts!
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