Imagine an Amazon clinic opening a short distance from one or more of a health system’s hospitals or other care facilities. If you’re a healthcare industry leader, are you confident your consumers’ experiences would compare favorably with Amazon’s? – Kevin Fleming, CEO, Loyale Healthcare
Lafayette, California (PRWEB)
December 16, 2020
Over the last few weeks, Amazon, the worldwide retail and web services giant, has made two big announcements about its expanding footprint in the healthcare industry. Most recently, Amazon Web Services (AWS) announced Amazon HealthLake, a HIPAA-eligible service for healthcare and life science organizations to “enable healthcare organizations to store, transform, and analyze all of their data in the cloud.” Not long before that, in mid-November, Amazon announced the introduction of Amazon Pharmacy, a “new store on Amazon (that) allows customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App.”
For healthcare providers, these two different healthcare initiatives; one business-to-business, the other business-to-consumer, appear to be benign industry developments, representing little or no competitive risk. The pharmacy business offers no direct competition (other than the provider’s own pharmacy business), and HealthLake could in fact be a boon for providers. HealthLake’s ability to “pull data from different locations, centralize it into one data ‘lake’ and structure it…to reduce the time it takes to transform data in the could from weeks to minutes,” could give health systems and hospitals with access to the insights they’ll need as they reconfigure their operating models for the hyper-competitive marketplace predicted by many industry pundits after the COVID-19 crisis is over.
But what might give providers pause is the fact that Amazon sees opportunity in healthcare and has begun the process of exploiting that opportunity. Amazon has built a $1.1 Trillion company by disrupting other sectors of the economy. Even the company’s traditional investments play into its digital-first approach to winning. Consider its 2017 acquisition of Whole Foods grocery stores for $13+ billion.
On the one-year anniversary of the acquisition, a Forbes article summed up the company’s motives, stating “Amazon bought Whole Foods not because it wanted to know how to operate grocery stores. Amazon bought Whole Foods so it could convert grocery consumers to online.” The article went on to explain that “In order to maintain its high stock price, Amazon has to grow its revenues. For that, it has to keep finding new products to sell. Because it’s so big, it’s not likely to sell so much more of what it already sells, it has to find new products to sell to consumers. When you think about what it might sell that it doesn’t already, a few market segments come to mind: health, banking and finance, cars, grocery and maybe some others.” And of course, every new industry Amazon chooses to pursue only advances the company’s never-ending quest to deepen relationships with consumers. They do this by tracking consumer behavior, then applying some of the planet’s most sophisticated analytics and artificial intelligence to ensure that their consumers’ experiences are second to none.
Amazon’s foray into healthcare isn’t new. In a CB Insights research report titled, Amazon in Healthcare: The E-Commerce Giant’s Strategy for a $3 Trillion Market, the authors point out that “Between 1999 and 2000, the company made an investment into Drugstore.com with plans to expand its e-commerce business into the pharmacy space. It eventually ran into the existing web of middlemen, regulators, and more, which brought its ambitions to a halt.” The report then goes on to describe the company’s nearly $1 billion purchase of online pharmacy PillPack and its joint healthcare venture with JP Morgan Chase and Berkshire Hathaway, Haven Healthcare.
The report observes that “(Amazon) is serious about entering healthcare, bringing with it a non-traditional business model, infrastructure in logistics & computing, and customer love.” Significantly, the report states that the company was exploring “creating clinics and primary care services specifically for Medicare beneficiaries,” and goes on to add that “A quick way for Amazon to distribute clinics would be to establish them in Whole Foods, where it already has a retail footprint.”
Amazon has already begun operating clinics for Amazon employees, announcing in September of 2019 the launch of Amazon Care, a virtual medical clinic for employees. And just last July, the company announced that it was launching neighborhood clinics for warehouse workers and their families, with plans to open 20 clinics in five cities as part of an initial pilot program and could establish more if 2021 if the program is successful.
We could devote hundreds of pages to exploring the breadth and depth of Amazon’s interest and potential in healthcare. But for our purposes today, we’re concentrating on two issues that should be of concern to any hospital or health system that could find itself in direct competition with Amazon or other consumer- centric technology company in the near future. These are 1) Amazon’s proven formula for success, leveraging incomparable capabilities in logistics and technology; and 2) the company’s customer-first mission.
Amazon’s founder, Jeff Bezos’ commitment to the customer experience is well documented. The world’s wealthiest man has been quoted stating that, “If we can arrange things in such a way that our interests are aligned with our customers, then in the long term that will work out really well for customers and it will work out really well for Amazon.” The accelerating success of Amazon provides compelling testimony to the man’s and the company’s sincere dedication to the mission of delivering exceptional consumer experiences.
If you’ve transacted business with Amazon, and it’s hard to imagine who hasn’t (particularly this year), you know that every single element of the customer’s experience is considered. If friction exists at any moment, at any touch point it’s identified, analyzed and steps are taken to remedy it. Now, imagine an Amazon clinic opening a short distance from one or more of a health system’s hospitals or other care facilities. If you’re a healthcare industry leader, are you confident your consumers’ experiences would compare favorably with Amazon’s?
As one might expect, most healthcare providers would feel confident about the quality of their clinical service. That’s because for decades hospitals’ missions were simply to deliver exceptional care and get paid for it by insurers (payers) and the government (Medicare, Medicaid). But as costs have soared and the payer mix has expanded to include patients themselves, most healthcare providers are finding they are ill-prepared for the transformation they must execute in order to remain relevant and competitive.
One area in traditional healthcare delivery stands out for its chronic systemic inefficiency. Patients’ financial experiences have frustrated and alienated customers for years. In fact, as many as half of American consumers have delayed or avoided getting needed medical care because of personal concerns about their ability to afford the expected out-of-pocket. When care is sought, consumers have reported widespread dissatisfaction with their billing and payment experiences.
We’ve written extensively about how the COVID-19 National Health Emergency has broken down the barriers that, before the pandemic, kept virtual care delivery (telehealth) bottled up – representing a tiny portion of a provider’s business and revenue. In COVID-19: Healthcare Consumerism’s Tipping Point, we pointed out that “Historically, patients have lacked the tools and information needed to fulfill their roles in the provider-payer-patient transaction, but big changes caused by the COVID-19 pandemic have finally set the stage for healthcare’s consumer era.”
In the article we cited research and expert opinion asserting consumers’ growing expectations and the expanding field of care delivery channels for them to choose from. We also shared five principles that health systems and hospitals should embrace now in order to deliver their patients the financial experiences they now expect – and will soon demand; 1) Keep it Simple, 2) Make it Familiar; 3) Be Convenient, 4) Keep it Short, and 5) Put Patients First. That’s what the Loyale patient financial engagement platform was conceived and engineered to do. And every day, we’re helping our clients take the critical transformative steps required to compete in the consumer-centered healthcare marketplace.
At Loyale, we’re counseling our clients to expect competition from Amazon, and possibly others. At the same time, we’re working with clients to ensure that the exceptional care they are known for is reflected in the financial dimension of the care experience. By committing to patient-first principles, our clients are finding that the good will they’ve built with their patients and communities gives them an enduring competitive advantage when they leverage the tools to place their patients (consumers) first. We’re proud to be an ally in this critically important endeavor.
Kevin Fleming is the CEO of Loyale Healthcare
Loyale Patient Financial Manager™ is a comprehensive patient financial engagement technology platform leveraging a suite of configurable solution components including predictive analytics, intelligent workflows, multiple patient financing vehicles, communications, payments, digital front doors and other key capabilities.
Loyale Healthcare is committed to a mission of turning patient responsibility into lasting loyalty for its healthcare provider customers. Based in Lafayette, California, Loyale and its leadership team bring 27 years of expertise delivering leading financial engagement solutions for complex business environments. Loyale currently serves approximately 12,000 healthcare providers across 48 states. Loyale is proud to have an enterprise-level strategic partnership with Parallon which includes the deployment of Loyale’s industry leading technology at all HCA hospitals and Physician Groups.