What happens when one of the world’s biggest companies takes a shot at care? What are their strengths, and what plays into their advantage? Can they apply the same principles they applied for other businesses, and most importantly, can they tailor the fabric of care itself? Here are some of my thoughts on how Amazon has the power to create a real impact and become the most admired healthcare brand in the world. What it can do and what it needs to do to address a $3.6 trillion question?
Healthcare, as we know it.
As some of us know, healthcare broadly is an elaborate graph of various stakeholders connected and interacting through too complicated, inter-woven cycles of emotions and experiences (yes, emotions, and experiences). From self-diagnosis to getting acute care, the consumer interacts with multiple touch-points of products and services. This endless spectrum requires physical infrastructure, logistics, supply chain mechanics, and, most importantly, to be right most of the time.
Healthcare, as we experience today, is a reaction to a particular condition or an episode. That reactionary nature has created silos of products and services that do not see a patient journey end-to-end, but as fragmented episodes of care.
Why does the healthcare of today feel like that it is stuck in generations ago? Why can’t the tools, technology, and services of today be applied to the basic human need that feels complete and seamless? How can we create experiences that not only fulfill but celebrate human lives?
Since 2001, Amazon has adhered to its playbook of a virtuous cycle to deliver innovative products and services, from Prime, AWS to Alexa. It has focused on economies of scale, network effects with a significant impetus on customer success at all costs. By introducing customer-friendly products and services and creating a virtuous cycle of growth, Amazon has been able to envision and fuel businesses that have become monolithic giants in their right.
For Amazon getting into healthcare is not only a new product challenge but a way to measure its core philosophy of customer first and their success. Their success in this would not be measured by how the world sees it, but how well they can use the infrastructure they have created to solve wicked problems in healthcare.
The Moment of Acceleration
The current and unprecedented situation (Covid-19) has fueled global citizens to eat, work, play, and engage with each other at a distance, mostly online. It has accelerated our dependency on virtual consumerism across sectors, be it retail, media, education, and now ever increasingly in healthcare. Behaviors on how individuals, communities, and nations operate are seeing seismic shifts. These shifts shall define the core of how we live, interact, and operate within the new boundaries of the social fabric.
Though Covid-19 has accelerated the shifts in healthcare (think virtual care), we shall see seismic changes in behaviors across individuals and communities at large. Self-monitoring, changes to public health policies, emphasis on preventive care are some of such scenarios that see wholesome changes. This shift plays amazingly well into Amazon’s philosophy of becoming the monolithic juggernaut of products and service providers of the world. Healthcare is no exception. But can they use this moment in history to build something that we all crave for — a seamless connected experience of how we seek and consume care for ourselves and our loved ones?
Here are some of my thoughts on how Amazon is poised to reshape the archaic healthcare world to create a meaningful brand adored by many for years to come.
1. Behavior Change
The biggest challenge in consumer health today is the adoption of tools and technology and subsequent engagement with healthcare systems continuously. Most individuals see aspects of care as a reaction to a condition vs. investing in behaviors that prevent a condition’s onset. It is challenging to make one long-term lifestyle or behavior change, much less multiple at a time. Changing a behavior, like eating healthy, going to bed earlier, or starting a new exercise program, is a multi-step process that requires deliberation, action, and maintenance.
Amazon can leverage behavior change as a core principle/ philosophy on how it designs its products and services for healthcare. There needs to be a scientific and data-based approach to understand the motivations of individuals, their abilities, and creating prompts towards enabling those changes. Amazon can enable micro-steps scenarios like travel health, virtual care, pediatrics, food and nutrition, and general wellbeing to engage the consumers on behavior changes. Focusing on behavior change enables them to build a level of trust with consumers but also helps them to build the “healthcare flywheel” from a long term perspective.
2. Care Journeys vs. Episodic Approach
Apart from well-documented challenges in access, cost, and quality of healthcare in the United States, one of the most significant lacuna is how we approach healthcare today. Many of us see healthcare as a reaction to a condition/ an episode vs. a continuous care paradigm. Most consumers end up in Urgent Care or Emergencies for conditions that can be prevented in the first place. The challenge here is a mindset change (which alludes to point above), which could create healthy communities and alleviate the skyrocketing cost and unequal distribution of health.
One approach is to create a paradigm of continuous and holistic care. It involves creating a “care continuum” for its consumers where they engage continuously with its products and services at various stages vs. a single episode of care. The best way to model and design for such scenarios is through building robust patient journeys and creating service blueprints that cater to those complex, intertwined journeys. Methodologies like service design need to be integrated into the product thinking process, which not only entails creating more holistically but also investing in better infrastructure for the long term.
The Manzi Scenario: Manzi has a family of four and is also asthmatic. He works as an engineer working at one of Amazon’s sprawling campuses, spending about ten hours every day there. Think of scenarios (and thereby opportunities) for a brand like Amazon to come in, connect with Manzi, and provide continuous care for him and his family.
From the ability to see doctors virtually, create a healthy nutrition plan (and have the infrastructure to deliver those) to create concierge services like virtual counseling, and use artificial intelligence to predict his care journey. Think of this as a service platform that enables positive health outcomes by delivering better care experiences and new models of interface and engagement between various stakeholders.
3. Economics of Care
The U.S. spends more on health care as a share of the economy — nearly twice as much as the average OECD country — yet has the lowest life expectancy and highest suicide rates among the 11 nations. It has the highest chronic disease burden and an obesity rate that is two times higher than the OECD average. Compared to peer nations, the U.S. has among the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths.
In 2018, the U.S. spent 16.9 percent of gross domestic product (GDP) on health care, nearly twice as much as the average OECD country. The second-highest-ranking country, Switzerland, spent 12.2 percent. At the other end of the spectrum, New Zealand and Australia devote only 9.3 percent, approximately half as much as the U.S. does. The share of the economy spent on health care has been steadily increasing since the 1980s for all countries because health spending has outpaced economic growth, in part because of advances in medical technologies, rising prices in the health sector, and increased demand for services.
There is something wrong here. The economics of providing care does not match outcomes. We are not getting healthier! On the contrary, we are struggling to have a system that balances the economics and outcome of care.
For Amazon, the opportunity lies in rebalancing the economics of care, mostly by investing in preventive aspects of care. Rather than becoming another monolith of healthcare with the same old paradigms of the economics of episodic care, Amazon can re-invent the root of the care economics itself.
Let me explain!
The majority of cost in traditional healthcare goes in providing the actual care itself, and documenting and managing the peripherals of care, a.k.a administrative aspects like claim management, billing, benefits management, etc. Over the years, insurance companies and care providers have built models that cater to that thinking. These models celebrate and reward behaviors that focus on individuals and populations that are unhealthy or have conditions vs. trying to prevent that from occurring in the first place. Diabetes is one such condition that is more of a lifestyle disease that could be managed through prevention vs. treatment.
A possible way Amazon is to start pushing its products and services towards behaviors that reward prevention. That includes building models to encourage individuals towards better habits and lifestyle, self-quantification (awareness) and map those to benefits and incentives across multiple touchpoints (home, workplace, online, etc.) There needs to be a consciously designed tilt towards wellness and well-being products and services, reducing the economic burdens on healthcare eco-systems.
4. Alternate Care Settings
Traditional care delivery models like clinics, hospitals, emergency rooms, and urgent care centers have been a significant part of the cost burden. The settings haven’t changed for many years. In the last few years, we have started seeing a shift towards technology-enabled care, but we are still early on that path.
Virtual care has started to see a shift (mostly accelerated by Covid-19) that gives health stakeholders and patients the ability to share data and content and perform personalized interactions remotely. Virtual care can allow for convenient, high-quality access to care that can enhance provider-patient interactions.
At least a quarter of all outpatient care, preventive care, long-term care, and well-being services would move to virtual delivery over the next two decades. Even some inpatient care, which now takes place in physical, brick-and-mortar settings, will likely shift to virtual environments.
Technology is enabling new paradigms of health clinics. Organizations like Forward Health are trying to reimagine future clinics with an emphasis on automation, remote monitoring, and AI in various clinic interactions. The brick and mortar versions of clinics would become highly sophisticated with adaptive use of technology from scheduling to follow-ups and everything in between. Additionally, health-facilitated robotics and automation can help relieve clinicians of mundane, administrative, or routine tasks, giving them more opportunities to practice at the top of their license.
For example, virtual assistants can handle appointment scheduling, prescription orders, and transcribing clinician notes automatically into the electronic medical record so that clinicians can spend more time treating and engaging in face-to-face interactions with their patients.
Embedded technology at home can redefine how we look at care for individuals and their families. Home care is accelerating from remote monitoring to medical counseling as a convenient alternative to in-person clinic visits.
Amazon has the advantage by already creating a wide array of infrastructure, from Prime to Alexa, which can be maximized to cater to in-home care needs. Echo can become a virtual medical assistant helping patients to counsel, monitor, and schedule care visits. Pill Pack is already enabling home-delivered medication similar to its grocery and other commodities. Automation can help smoothen the end to end process from a simple medical question, remote monitoring and delivery of medications and beyond.
Beyond virtual care, in-home care provider visits, and medication delivery, Amazon can accelerate new clinic models by leveraging its bricks and mortar businesses to create clinics of the future, which are seamlessly integrated into day-to-day lives of its consumers. Clinics which are technologically future-looking and can provide care at another touchpoint for its consumers.
5. Prime for Care
There are about 320M+ active Amazon customers. Out of which 100M+ have Prime membership. The average spend of Prime members is about $1500/yr vs. $600/yr by non-members. This is a huge customer base that could be tapped into the products and services required to facilitate care.
Amazon has the potential to become the universal basket of care to millions of its members by pivoting their marketplaces to focus on products and services that facilitate prevention (think wellness and wellbeing) coupled with technologies that enable various touch-points. In another healthcare cohort, there are about 124M+ Medicare and Medicaid beneficiaries. Spending for Medicare and Medicaid has been about $1.4T. A significant percentage of these belong to lifestyle conditions like diabetes, cardiovascular, etc. This population cohort is one where Amazon has the most room to grow and provide various products and services.
Amazon Fresh and Pantry also play a crucial role in bringing some of the innovation in tailored meal services to populations with specific conditions or aspirations for lifestyle changes. By creating a layer of wellness and well-being over its offerings, Amazon can seamlessly connect thousands of service providers to millions of customers.
Prime for care can also be seen as concierge care. In current form, for an annual fee, typically between $1,500 and $2,000, patients get more direct access to their doctor, same-day appointments, and coordination of medical care across different specialties. Using existing infrastructure Amazon can provide a marketplace of care services to its prime members benefiting both patients and providers through a seamless interface they are already using.
6. Built for Clinicians
One of the most neglected areas of medical practice is the productivity tools for clinicians. The burden of regulatory compliance and documentation has created gaps and is causing severe physician burnouts. More than half of U.S. physicians report at least one symptom of burnout, as measured by three inter-related components: exhaustion, inefficacy, and cynicism. Out of that, 50% of women and 39% of men reporting being burned out.
Physicians need tools that are efficient, non-intrusive in their workflows, and create efficiency for them to deliver better outcomes for their patients. The neglect of such devices has a direct impact on the health and care of individuals and populations.
The other aspect which is pushing the innovation boundaries to create new tools is the focus on preventive care and wellbeing of patients. Dr. Atul Gawande emphasized this in his book “ Being Mortal: Illness, Medicine and What Matters in the End”:
“ We’ve been wrong about what our job is in medicine. We think our job is to ensure health and survival. But really it is larger than that. It is to enable well-being.”
Companies like Nuance and Microsoft are pushing the boundaries of AI to create new paradigms like the “Exam of Future.” Such innovations are a direct outcome of trying to reduce physician burnout.
Amazon has the opportunity to use a superior user experience as a backward integration strategy to truly disrupt the healthcare experience for not only its consumers but also for the care providers. Voice interface is being increasingly adopted in hospital and clinical settings, and Amazon, through Alexa, can push the boundaries on how deeply this could be integrated into various clinical scenarios, including EMR, schedule management, etc. On the other hand, machine learning can accelerate areas like Care Programs, Hospital Capacity Management, Provider Scheduling, etc. These real-world scenarios can catapult the efficiency and productivity amongst care providers.
Virtual Care scenarios could happen outside the confines of the hospitals and clinics and provide care providers a more human appearance than how it is perceived today! Finally, cutting edge technology, better user experience, and streamlining some of the complex clinical workflows could provide Amazon an edge compared to the current healthcare incumbents.
7. Quality Marketplace
Best brands reflect quality in their products and services. Apple, for instance, have their primary source of competitive advantage in its brand equity. The company has built very high-level trust in the market and is known best for its quality products.
This is true for healthcare as well. The concept of doctor ratings and reviews is fueling companies like ZocDoc, where the consumers can not only see doctor profiles but see how they are rated and reviewed. This is nothing more than building an online reputation for a provider and their services. Healthcare is an outcome-based practice, the quality of providers on its platform is paramount, especially from a long-term brand-building perspective.
PillPack (an Amazon company) is an excellent example of a brand built on quality and outstanding user experience. The company is loved by its customers with consistently high NPS scores. Similarly, Roman (a digital health clinic for men) is pushing the envelope through superior design and brand message. The lessons from these are organizations is an emphasis on baseline quality and obsession with customer experience.
The focus on customer experience works well with Amazon’s ethos. It needs to continue on that path with its healthcare products, service offerings, and the providers behind those. For Amazon, this cannot be a volume business but a value-based long term bet.
8. Healthcare and Cloud
Cloud adoption across various healthcare services is on the rise, and one area that cloud will have an impact on is the actual delivery of health services — and the doctor-patient relationship. Specifically, the cloud is geared to support remote diagnostics and treatment — helping to empower the patient with knowledge of their own condition. It may also support the extensive data requirements of preventative care, supporting a long-term industry goal of holistic medicine. Cloud computing in healthcare is growing so fast that estimates put its global market value at nearly $45 billion by 2023.
Many new scenarios in healthcare are testing the boundaries of the cloud. Some of them include real-time hospital utilization management, remote patient monitoring, virtual care, billing and claims management, clinical decision making, etc.
Given this rapid growth in cloud adoption, AWS has become the keystone to deliver success for Amazon’s healthcare initiatives. Data safety, privacy, and advanced computing have become the tenets of any cloud offering, and AWS is primed to facilitate that internally for Amazon. AWS essentially becomes a platform on which multiple scenarios in for healthcare could be built, deployed, and serviced. The other area where the cloud could have a more significant impact is in using AI and machine learning for better population and public health management.
A Brand that is Loved
Finally, for Amazon to become a brand that is loved and admired by its customers, it has to invest heavily in making design thinking core of how it approaches this space, thinks about the problems and crafts solutions for meaningful outcomes. It also needs to put vertical integration in place to deliver an end-to-end experience to its customers.
I am excited about the potential Amazon can bring to the table in healthcare and essentially re-write how we perceive and experience healthcare. I also envision that the time for a change in healthcare is upon us, and among all the big tech companies, Amazon is best suited to become the darling of the world.
In a future-ready world of healthcare, I would re-imagine Amazon’s “Flywheel” to accommodate the current healthcare realities. Here is my interpretation of what that could like.