Amazon, Population Aging, and the Future of Digital Health Services
Why Amazon (and other Big Tech) is well-positioned to dominate in the tech-enabled healthcare market of the future: An outside analysis
I wrote this article a few months ago and have not had time to finish it. But, in light of the recent pandemic, it makes sense to publish an article about “Big Tech” and the future of tech-enabled healthcare services. Telehealth and virtual care are playing a big part in the response to COVID-19. The introduction of digital health technology to first-time users and coverage of these services by major health insurers is likely to accelerate the existing momentum towards a more digital-capable health system.
In a 2013 paper titled, “What matters to older people with assisted living needs? A phenomenological analysis of the use and non-use of telehealth and telecare,” Professor Trisha Greenhalgh, now Professor of Primary Care Health Sciences at Oxford, argues that the approaches used by tech companies to develop assistive and health technologies fail to meet the needs of users — particularly, older adults that could most benefit from mobile health and assistive technologies.
Professor Greenhalgh, in this study, argues that tech products are too often built through the lens of the data that is collected from users rather than in a manner that provides day-to-day value to the users — an important distinction.
The Aging U.S. Population
10,000 people become eligible for Medicare each day — meaning that 10,000 people turn 65 each day (Figure 1). With age 65+ comes new and unique challenges. As the U.S. population ages and the population pyramid inverts, the chronic diseases of aging will continue to fuel the demand for health and social services. Chronic diseases such as heart disease, diabetes, chronic obstructive pulmonary disease, and cancer will continue to drive healthcare spending and service utilization. When individuals are impacted by chronic disease, mobility issues and the ability to maintain the activities of daily living (necessary to remain living independently) become key challenges.
In the U.S., the disproportionate volume of individuals in the baby boomer generation combined with the subsequent effects of aging on health and mobility is creating a “longevity” market driven by stress on existing health and social support systems.
This trend is driving a massive amount of interest in technologies and products that can support older adults. One of the key goals for innovators is to enable “aging in place” to assist people with living in their own homes as independently as possible — for as long as possible. A second goal is to overall improve the provision of health services so as to reduce the disease-related burden on existing systems.
From the health system’s perspective, the cost savings associated with home-based services in comparison to the costly transition to assisted living facilities — and, the eventual institutionalization in skilled nursing facilities — merits a significant investment. In housing, technology, and health services, companies are working to develop solutions to meet the growing demand.
Attributes of Chronic Illness + Aging
Chronic illness occurs at higher rates in older adults with ~66% of individuals on Medicare living with at least one chronic condition [1]. Chronic diseases are treated using a mix of lifestyle changes (e.g. diet and exercise) and medications. These life-long conditions are usually manageable when physician treatment and lifestyle recommendations are followed and long-term monitoring is adequate.
Chronic illness, natural age-related processes, and mobility challenges create an opportunity for innovators looking to enter both the consumer and enterprise markets with solutions— and, it is a combined trillion-dollar market.
The Promise of Tech Innovation
The tech giants (and plenty of ventures) have expressed an interest, or have already launched products for use, in health and social support services.
The scalability and customizability of cloud-based and mobile solutions, the recent advancement of robotic technologies, passive data collection from wearables, and the application of machine learning capabilities to existing data sets are likely to be incorporated into aggressive strategies to enter the healthcare market.
The growing “aging-pressure” on failing health and social service systems is the perfect storm for user-obsessed tech companies to succeed.
Apple
Apple appears to have quietly prioritized the use of its health records app and Apple Watch features like activity tracking, heart rate, and its electrocardiogram (ECG) capability. In a recent study at Stanford, the Apple Watch ECG feature was found to be capable of identifying atrial fibrillation in a large study sample and with low rates of false positives.
Apple’s ubiquitous iPhone devices, loyal userbase, and leading hardware capabilities will likely be the inputs into future healthcare strategy. The use of Apple’s App Store marketplace will also be a big driver of Apple’s indirect healthcare play as the company takes 30% of external developer app revenues as health-related apps continue to be developed at an astonishing rate.
In short, Apple’s activity in healthcare will be largely driven by its perfectly integrated wearables and mobile devices — with the result being real-time clinical and lifestyle data collection.
The effective and efficient use of data in healthcare has been a debilitating pain point for the industry. Google has announced an interest in aligning its world-leading capabilities in large data “search” with its healthcare strategy.
Google has been interested in healthcare-related markets for a while suggested by its continued operation of Verily where is the focus is primarily on life sciences.
Through a slew of recent hires, Google has been bolstering its healthcare expertise — specifically health services. Combined with its unmatched development capabilities and data-related IP, Google could prove disruptive to traditional electronic health record (EHR)and information technology vendors. In a similar manner to Apple’s app marketplace, the Google Play Store also allows Google to get a piece of external developer health app innovation.
While owning a smaller market share than Amazon, Google’s voice-technology may also play a role in any healthcare moves. Voice-technology has a place both in the clinic and the home.
But, Google’s expected focus on data products and clinical EHR search may be its Achilles heel if the company fails to convince lawmakers, regulators, and the general public that it can be trusted with clinical data. EHR data is arguably the most sensitive personal data stored in the health system — and the recent news of Google’s Project Nightingale has brought significant and disproportionate scrutiny.
In short, Google will likely roll out an electronic health record with amazing UI/UX, excellent data analysis tools, and search capabilities as well as excellent APIs. HIT infrastructure centers around the EHR and this could become a marketplace of applications and APIs.
Enter Amazon — The Healthcare Giant
While the digital health and health technology space has been red hot for a few years, it is clear that Amazon is particularly well-positioned in light of the macro market trends driven by aging.
With a company culture of nonstop disruption, the massive tech (retail, logistics, airline, R&D, Pharma, SaaS, Cloud, etc.) company is doing more in health than hits the news. In addition to AWS and PillPack, Amazon is being far more ambitious — it is not just adding 2-day shipping for prescription drugs with PillPack to Prime.
A recent MobiHealthNews article summarizes Amazon’s 2019 healthcare efforts that were made public (or, leaked). Here is a breakdown of where Amazon is slowly, intentionally, and successfully headed towards healthcare disruption in areas where traditional healthcare organizations have failed to deliver effective user-centered products and services:
Amazon will continue to leverage Alexa’s voice technology to move health education, engagement, and seamless experiences into the home.
Amazon owns ~70% of the smart speaker/in-home voice tech market. This is important because this technology and user-interface are accessible to everyone. Specifically, this technology is easy for older adults to use, it is engaging, and it is affordable. In addition, Amazon has recently leveraged its voice expertise to launch Amazon Transcribe Medical, for clinical dictation as a clinic-facing product (a move I expect Google to make as well).
PillPack, and the pharmacy business, will create the most patient-centered, user-obsessed, and data-driven distributor of medications — with individuals ages 50+ serving as the major target market.
Demand for medications fueled by a growing chronic disease burden combined with a better customer experience will allow Amazon to take market share from traditional retail pharmacies. A survey of Amazon Prime customers shows that the 55+ age group is a large Amazon Prime “captive audience” and one that is rapidly growing into Medicare eligibility. They are also tech-savvy and have a high rate of obesity-related chronic illness.
AWS will continue to provide the power of cloud-based applications to impactful products and analytic capabilities to healthcare and life science enterprises including remote monitoring and mobile products.
Cloud-based solutions built by Amazon itself, and by companies leveraging AWS cloud products, will also be a driver of healthcare-related business. AWS has recently been hiring health informaticists and has been busy with Alexa voice technology in health applications.
Amazon’s product development capabilities will result in some form of health-related wearable that is differentiated from the vital-sign focused products offered by Apple.
This product will likely complement Alexa capabilities which benefit aging adults due to its accessibility. The product, according to the MobiHealthNews article, may look to add value to social interactions. Healthcare has been slowly recognizing the importance of addressing social isolation [2] in older adults and its effect on health outcomes and thus a wearable technology like this could prove valuable.
Amazon Care has launched a mobile app and a healthcare experience for employees in their Seattle office.
The website states: “Healthcare built around you.” In traditional Amazon fashion, the company is piloting a virtual care service internally that will likely make its way to the greater healthcare market — it will likely be employer-focused at first.
Overall, Amazon’s many efforts to enter healthcare will work in concert for long-term growth in the “longevity economy” fueled by population aging and chronic disease.
In short, Amazon is building products that enter the home and allow enterprises to leverage the data — but at a scale only possible at Amazon.
Data Privacy Regulation
Regardless of focus, all companies will have to contend with the growing concern and debate about data privacy. The regulatory environment [3] is a major risk going forward and will shape big tech’s (and small tech) healthcare strategies.
[1] Centers for Medicare and Medicaid Services 2019 FFS Data
[2] Social isolation in older adults is a big problem with loneliness and lack of social contact impacting cognitive functioning and mental health
[3] Keep an eye on the FDA to make larger changes to its approach to health-related software solutions despite the minimal regulation announced in early October 2019. In addition, ONC released a final rule with respect to health data sharing to increase the secure exchange of important clinical data
