Amazon has become a household name in the areas of online shopping, technology solutions (AWS), entertainment (Amazon Studios), and grocery (with its acquisition of Whole Foods). However, in the future, Amazon may soon be a lead player in the healthcare market, as not only a supplier, but also potentially as a provider.
In January of 2018, Amazon joined forces with Berkshire Hathaway and J.P Morgan Chase by establishing a partnership to create a new company with the goal of creating technology solutions that will provide high-quality healthcare at a lower cost for their almost 1 million U.S. employees.
Regarding the new partnership, Amazon’s founder and CEO, Jeff Bezos stated “the healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty. Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”
As Amazon enters the world of healthcare, it begs the question how could this industry giant transform and revolutionize the healthcare industry in the future beyond their partnership with J.P. Morgan Chase and Berkshire Hathaway?
Amazon’s Business Components That Could Change the Healthcare Market
Durable Medical Equipment
Amazon has licenses to distribute medical supplies to providers in 43 three states. With Amazon’s warehousing, processing and shipping capabilities they may be able to become a significant player in this market. Not to mention Amazon’s ability to acquire large lots of items due to its existing business relationships, which could substantially lower costs to consumers.
Prescriptions: Mail Order and Retail
Amazon has secured approval as a wholesale pharmaceutical distributor from 12 state pharma boards. Again, this is an area where Amazon already has the capabilities (warehousing, processing, and shipping) to act as a mail order prescription service.
In the retail space, Amazon has physical storefronts in its holding of Whole Foods. In many Whole Foods locations, Amazon already has Amazon lockers and delivery kiosks within the stores that allow customers to pick up ordered items. Amazon could use their locker service to deliver prescriptions, or they could build pharmacy centers within their 431 Whole Food stores in the United States.
AI-Powered Diagnostics & Telemedicine
At its heart, Amazon is a tech company that employs some of the brightest minds in the industry. They are an industry leader in AI and are already using these capabilities elsewhere in their business. Amazon could easily leverage their existing capabilities to the healthcare space. Coupled with their secure AWS cloud service offerings, they could efficiently process patient information and spot trends and patterns that could improve healthcare delivery in the form of AI-powered diagnostics.
In the telemedicine space, Amazon already has an army of potential telemedicine devices in the form of its voice-activated products Alexa and Echo. These two products along with their associated services, could enhance the patient experience. Currently, many healthcare organizations are doing a proof of concept with Amazon devices. For example, Alexa already delivers first aid information to users. This capability could be grown to include scheduling doctors’ appointments and virtual house calls (with Echo Show’s video offerings).
Planning for the Future
While still in the early stages, it is easy to see how Amazon could leverage their business model in the healthcare industry. With the vision of their CEO and tech capabilities, they could change the face of healthcare as we know it. Time will tell how truly disruptive they will be to the market.
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