Amazon has been a hot topic in healthcare for at least a year. And for good reason. With the acquisition of PillPak, the Haven initiative with JP Morgan and Berkshire Hathaway, Alexa HIPPA compliance, and the announcement that they’ll accept Health Spending Accounts (HSA), it’s clear that Amazon has big plans for healthcare.
When I was at the Healthcare IT and Marketing Conference (HITMC) in Boston last month, I got to talking about this with Jack Murtha and Tom Castles of Inside Digital Health and the Data Book podcast. To us it seemed like the industry was putting a lot of stock into everything Amazon was doing, or might do, and that many people see them as a potential savior for our dysfunctional healthcare system.
We didn’t question whether Amazon has the chops to shake things up in healthcare. Nor did we question the attention they’re getting. We did wonder if the high expectations of them were reasonable. We wondered if that optimism bordered on silver-bullet thinking. And most importantly, we wondered if that could actually slow healthcare innovation down.
So we decided to dig into that question in this collaborative podcast between Data Book and The #HCBiz Show!
What do people really think about Amazon in Healthcare?
We caught up with Christina Farr from CNBC.com to find out what she’s seeing in the field. As a leading technology and health reporter, we knew Christina would be able to shed some light on our questions.
According to Christina, Haven is driving much of the attention and speculation around Amazon’s healthcare strategy, but the most interesting, and most secretive projects are happening inside of Amazon itself.
They are amazing at making deliveries. They know exactly what they’re doing from a supply chain and logistics standpoint and beyond that, they put the consumer first.Christina Farr, CNBC.com
These are all things that healthcare struggles with and that makes Amazon’s entry very compelling.
What do the incumbents say?
Christina suggests there’s a difference between what you’ll hear from healthcare incumbents in public vs. what you’ll hear behind closed doors. Publicly they say healthcare is too complicated and Amazon won’t be able to disrupt it. Essentially, Amazon is not a threat.
However, in private you’ll hear concerns that Amazon may shake things up on a number of fronts:
- Group purchasing organizations (GPOs) may be concerned that Amazon will go after large hospital contracts.
- Pharmacies may worry that Amazon will expand Pillpak.
- Retail organizations with lots of brick and mortar may be concerned that Amazon will facilitate and speed the move of healthcare into the home.
- Haven says they’re only building services for their employees, but there could be a broader market for those services once they get it right.
What do consumers say?
On the consumer side, you really do start to see hope for Amazon as a kind of savior. When you talk to people who have had terrible experiences with the healthcare system, they can’t understand why it all seems so broken and hope that Amazon can bring some of that Prime convenience they’re used to outside of healthcare. On the flip side, there are very real privacy concerns when it comes to Alexa’s potential for becoming a bigger part of healthcare delivery.
You can expand the conversation to think about Silicon Valley as a whole. And Christina tells us that
“There’s definitely a lot of fed-up type sentiment that we’re hearing and this idea, around Silicon Valley being a savior is very real”.Christina Farr, CNBC.com
However, she cautions the listener that Silicon Valley is not altruistic and we’d be wise to question their intentions and approaches. She sees plenty of potential for good, but also sees companies who are “essentially propping up the existing system”. They find some place to insert themselves and take more out of the system than they’ll ever put in.
At the end of the day, Christina tells us that there plenty of examples already of Silicon Valley doing good, but we should be careful to not accept the idea that anything a tech company does will be better than the incumbent.
Can expectations of Amazon in healthcare lead to stagnation?
To dig into this question we looked to our very own Shahid Shah. He assured us that the hype around Amazon in healthcare is not slowing anything down. The industry incumbents are watching, but they’ll continue to move things along in their own way. And if innovators slow down because they think “Amazon might do it better”, then they probably weren’t going to succeed anyways. Shahid summarized it this way:
The innovators will innovate because they’re innovators. The non-innovators will complain and be worried for no reason and so I’m not actually that worried about them.Shahid Shah
Shahid is not concerned about stagnation. In fact, he thinks Amazon’s entry (and that of other horizontal technology players) will “give us kind of innovation that we cannot even imagine today. ” He acknowledges that the entry of horizontal players like Amazon is an indicator that the incumbents aren’t innovating fast enough, but concludes:
“I’m not that worried that it will take a horizontal player to come change the vertical players in healthcare because it’s the only thing that ever does in any other industry”.Shahid Shah
So at the end of the day, the concerns we opened with about oversized expectations leading to stagnation may not apply. Our expert guests shared an optimistic, but realistic view of what we can expect from Amazon, and the rest of the tech industry. Give it a listen and let us know what you think!
Related episodes form The #HCBiz Show!: Dexter Braff shares advice for Health IT entrepreneurs on how to stay focused while big players keep making big announcements.
About Christina Farr
Christina Farr is a technology and health reporter for CNBC.com in San Francisco. She most recently was a senior writer at Fast Company, covering biotech and health-tech for digital and print, and an Apple reporter at Reuters News. She hails from London, UK and is a graduate of Stanford’s School of Journalism. Reach her on Twitter (@chrissyfarr).
If you’re an #HCBiz listener, then you’ll love Christina’s work. Check it out here. A few recommendations that are relevant to this episode:
- The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market
- Everything we know about Haven, the Amazon joint venture to revamp health care
- ‘Alexa, find me a doctor’: Amazon Alexa adds new medical skills
- Amazon Alexa is luring health developers, but it will be a while before we use it to call a doctor
- Amazon takes another step into the medical space by accepting pre-tax health spending accounts
- Silicon Valley’s health-tech start-ups need to stop getting in so much trouble
About Data Book
Data Book spotlights the best stories and insights in healthcare technology. Big data and artificial intelligence are changing medicine and the world, but innovation also brings grave cybersecurity concerns. Every week, this Inside Digital Health podcast explores the people and plots behind the health-tech evolution—and the solutions to its problems.
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