The Case for Amazon Prime Health

Every time Amazon enters in a new industry, it changes the game. It resets consumer expectations for good. It crushes the competition. The big players lose 10% of their market value. Amazon dominates the news for months to come. We have seen this movie before in groceries, transportation, and media. The reality is that Amazon business is the consumer business. So, the BIG QUESTION is not if, but when? 

One industry is that is up for disruption in the US is healthcare Industry, which is complex and has been resistant to reinvention through technology compared to other industries.  

We have one of the most expensive healthcare systems in the world. It is one of the most inefficient in terms of aligning outcomes with costs. Patients have to pay significantly more, do more, and get substantially less. A big part of the problem is that our healthcare system is not value based, compensation is not tied to outcomes. We have a fee-for-service approach, in which providers are paid based on the number of healthcare services they deliver. 

Amazon has the power to disrupt the healthcare industry through technology. It can leverage its core competencies - personalization, convenience and hybrid marketplace with a long tail of products and services that match or beat the best price in the web - for good.  

Here is how Amazon can change healthcare - Welcome to Prime Health. 

Prime Health is Personalized Healthcare

Amazon could use A.I. to match us with the right doctor. Today, we use ZocDoc or just Google to help us find the right doctors. ZocDoc uses a combination of factors that range from expertise, location, years of experience, insurance coverage, and reviews to pick the best doctor. That's all good, but Amazon can take it to the next level. It can use doctor philosophy, prices, "people like me" network, and cases to create the perfect match. If we can do it for dating apps, why not do it for healthcare, which is arguably more critical for most of us. 

To get the right treatment, Amazon can apply a value-based approach to healthcare. This means paying for outcomes, not for the cost of the procedures. Amazon can change this dynamic by paying doctors and hospitals for results to get the right treatment, not the one that cost the most. Part of the reason Amazon might excel in health is data. The company already has a mountain of data on people and their shopping and buying habits, and that could be used to help serve their health needs.

Prime Health is Accessible Healthcare

Amazon already has one foot on the door in the $560 billion prescription drug industry, with the acquisition of the Online Pharmacy PillPack this year. The start-up is licensed to ship drugs in 50 states. PhillPack is relative a small player in the industry, but Amazon could use its purchase power to make drugs more accessible nationwide through PillPack. 

Today, we have PBMs "Pharmacy Benefit Management" that play in this space. They function as insurance companies for drugs. They buy drugs in bulk from the big Pharma to get the best price and pass the saving to patients.

With almost 100 million members and counting, Amazon can have the scale and purchasing power of most of the PBMs combined. This means significant savings for customers with nationwide coverage in 50 states. 

A growing number of doctors around the U.S. can direct patients to Amazon.com to buy blood-pressure cuffs, slings, and other supplies via an app embedded in the patient’s private medical record–a change that has also raised privacy concerns.

Prime Health is Easier Healthcare

Prime Health can not only get you cheaper drugs, but it can also make them more convenient. No need to go to the drugstore and wait in line to pick up your prescription. You can get them in your home with prime delivery within 2 days or same day with express delivery. Plus, if we need to take multiple drugs, they can pack them up and send you reminders to increase compliance. 

Amazon could also use digitalization to provide virtual access to doctors. They can leverage Alexa to make it easy to order drugs and give reminders and recommend a healthy diet.

 This list can go on.

The case for Prime Health is a no-brainer from a patient point of view. The challenging part is the politics and some of the legislation in place. That said, we are in the Age of The Customer, but it has yet to arrive in healthcare.