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Care … Amazon’s Revolutionary Move into Healthcare

Posted April 15, 2021| Michael Ratcliffe

In just three years, Amazon has put together a package of leading-edge services that have the potential to revolutionize the US healthcare market.

The major global brand is now maximizing the use of technology to allow patients to continue to use telemedicine to interact with providers on their time and in their preferred location. It is delivering prescriptions to patients rather than forcing them to go to a retail pharmacy, and it is providing a low-cost, hi-tech 24/7 on-body monitoring service backed up by leading-edge AI analytics to provide early disease detection and real-time health data. And, all of this is accessed through best-in-class online customer portals and supported by 24/7 online customer service.

2018 — Haven, PillPack, and Aiva

Amazon’s public charge into the US healthcare market started in 2018. In January, it announced Haven, a joint venture with JP Morgan and Berkshire Hathaway to create a revolutionary low-cost, high-quality healthcare service. Five months later in June, it announced the $753 million acquisition of PillPack and its move into the drug supply chain with mail order pouch packaging services. 

Come September, Amazon’s Alexa Fund joined forces with the Google Assistant Investment Program to invest in Aiva, a startup using Google Home and Amazon Echo to connect care providers with patients and seniors. Aiva works with over 30 health systems on digital innovation and healthcare transformation.

2019 — Cerner, Amazon Care, and Health Navigator

Amazon continued to make additional strategic moves in 2019.

It announced a partnership with Cerner, the second largest provider of electronic medical records (EMRs) in the US, to use Amazon Web Services (AWS), artificial intelligence (AI), and machine learning to develop new diagnostic services, such as being able to predict congestive heart failure over a year in advance of it being seen clinically. It also announced that it was making progress with Alexa and was working with both the U.K.’s NHS and in the US with the major health plan, Cigna, and the remote diagnostic firm, Livongo, to create healthcare “skills” for Alexa. For example, being able to make appointments and monitor prescriptions and post-surgical care, even helping with medical advice around common ailments like the flu and migraine.

All this activity led to the launch of Amazon Care in late 2019 for Amazon employees in the state of Washington. Amazon Care was to offer 24/7 primary and urgent care by bringing care to the person rather than the person having to go to the provider. By using the app on a smartphone, a member could text chat with a nurse or video meet with a doctor. Then, if they needed in-person attention, Care would send a mobile nurse to the member to provide at-home administration of physical assessment, vaccines, and diagnostics tests. 

Amazon’s 3 Year Moves into the U.S. Healthcare Market

In October, Amazon formalized its relationship with Health Navigator which was providing much of the connectivity for Amazon Care by acquiring it. Health Navigator had been providing its services to a number of Internet start-ups to help navigate patients to the right provider, give access to symptom-checking tools, and help patients decide whether they needed to see a doctor or go straight to the emergency room. Following its acquisition by Amazon, Health Navigator announced it would be dropping these services to third parties.

2020 — Neighborhood Health Centers and Amazon Halo

By 2020, Amazon had built or had agreements in place to offer a very impressive portfolio of patient-focused healthcare services around primary and urgent care considering it had only started on this journey in early 2018.

In mid-2020, it announced yet another component to its ever-growing healthcare offering. It would develop 20 “Neighborhood Health Centers” in five cities across the U.S., including Phoenix, Louisville, Detroit, and San Bernardino. This concept would be piloted at its Dallas-Fort Worth facility for its employees and operated by Crossover Health, a provider of employer health centers. It would provide the full spectrum of acute, chronic, and preventive primary care, prescription medications, vaccinations, behavioral health services, physical therapy, chiropractic care, health coaching, and referral services.

August 2020 saw another major announcement with the launch of Amazon Halo. It is believed that Halo was developed inside Amazon’s secretive Lab126. The small waterproof wrist band has multiple AI-driven technologies built into it to monitor patients’ activities, sleep, body fat, physical tone, and “Labs”, links to multiple 3rd party services. In addition, Halo links directly to Alexa to talk to Halo and get data readouts. Halo data would link into Cerner’s EMR systems to allow physicians to access this data with the permission of the patient. Now Amazon could monitor patients and with this data, which could be stored in AWS to develop revolutionary predictive diagnostics that would try to early identify health issues with a member.

2021 — Haven Shuts Down

After all this good news, the first bad news for Amazon’s healthcare strategy came in January 2021. Haven, its first major healthcare venture, would be closing down operations at the end of February 2021. A number of high-flying healthcare experts, brought in by the joint venture to run Haven, had been trying to make it work. However, they could not gain sufficient market share to drive costs down and to achieve their very ambitious goal of being the catalyst to change the U.S. healthcare system. COVID-19 did no favors to their efforts, either.

Did the failure of Haven signal a roadblock in Amazon’s drive to disrupt the U.S. healthcare system?

The answer would seem to be a resounding NO, as one month after this Haven announcement Amazon announced it would expand Amazon Care to all 50 lower states and to other companies rather than just Amazon employees.

To try to understand Amazon’s strategy and the implications of Amazon Care for the US healthcare market, we need to stand back and look at what Amazon has put together and how Amazon is rolling it out to the market.

The fact that Amazon has over 120 million Prime members has been often mentioned as a great market for Amazon’s healthcare. These individuals are generally under 50. It is safe to assume that they are generally working and so Amazon’s statement that it is rolling out Amazon Care to “other companies” would seem to point to its target demographic being the fully employed 20 to 50 year old individuals, not the over 65 baby boomers. The hi-tech services that Halo offers would also seem to fit far more for the 20-50s rather than the over 65s even though the elderly could benefit significantly from Halo’s monitoring services as well as getting their medications delivered in PillPack pouches.

Strategic Takeaways

Attacking the corporate care market would seem to be an extremely viable strategy for Amazon. It can take the learnings it found from offering Amazon Care to its nearly 900,000 employees and triage them into other corporate settings. Capturing large employees as customers could allow Amazon to rapidly grow its Care membership. These members will nearly all be tech-savvy and so happy to have Amazon’s high-tech, touchscreen-based interface and its user-friendly healthcare system. Nearly all corporations have self-funded health plans and so have direct control over their plans. Many are likely to welcome Amazon’s approach, especially with the potential to integrate leading-edge technology to monitor major high-risk, high-cost disease areas like cardiovascular, diabetes, and respiratory, plus the opportunity for Amazon to use AWS and AI tools to develop early detection of a wide range of diseases.

What is critical to understand is that Amazon appears to have put all of this together in 3 years. However, some areas of this package have clearly come from Amazon’s Lab126 and this was found in 2004, or 17 years ago. So we can expect that what we have seen today is only part of a major Amazon healthcare strategy.

If this analysis is correct, health plans as well as major pharmacies need to closely monitor Amazon, especially if they have large corporations as part of their customer bases. They need to watch additional announcements, especially acquisitions and partnerships that Amazon might make. These will help give additional insight into Amazon’s longer-term healthcare strategy, something that it has traditionally held very close to its chest. 

In terms of taking action, health plans and major pharmacies should also seriously consider running regular strategy workshops after each new Amazon announcement to better understand where their customer base is vulnerable and start building competitive defense strategies now before they find that Amazon has moved in and taken major customers away from them. 

The healthcare market has known that Amazon has had the potential to be a major disrupter for some time. The time has now come!

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