Amazon Care Foreshadows Healthcare’s Digital Future

September 30, 2019

Healthcare execs should be planning for a split between “legacy” healthcare and “digital” healthcare, replete with new tech platform integrations.

Amazon’s launch of a pilot project called Amazon Care, a virtual primary care clinic, indicates that healthcare executives should be working toward digital transformation, according to one expert.

“On face value, Amazon is providing a telehealth solution to employees,” says Vik Panda, North America managing director for sleep technology company Dreem, based in New York, Paris, and Taipei. “But it is being presented as a pilot, which suggests it could be opened to non-employees, and that this is a test bed for a broader offering.”

Presumably, a virtual clinic may be less expensive than a traditional provider model, according to Panda. “Amazon has room to experiment here because they are self-insured,” he says. “Really, this news represents Amazon as a self-insured company testing its ability to provide one element of what you get from the traditional healthcare sector, and bypassing traditional providers and payers. If they are successful, other large self-insured businesses may see it as a model or could conceivably join Amazon's platform.”

Healthcare executives have to ask whether they will be leading an institution that will be considered part of the “legacy” healthcare system, or part of the new “digital” healthcare system, according to Panda.

“Payers and providers can complain about how the other is holding back digital innovation because they're payers who don't want to pay for it, or providers who want to protect the old way of doing things,” he says. “But companies like Amazon may simply sidestep the whole debate since they have the resources to be both payer and provider. They can’t deliver the whole healthcare ecosystem in one go. But they can migrate bits, a little at a time.”

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Hospitals, payers, and the majority of employers represent how healthcare is provided today, according to Panda.

“They should not be seeking to become tech companies, but they should be working together to clear a path for tech platforms that allow them to close the gap between what healthcare is today, and where Amazon and others are seeking to go,” he says. “There are digital health platforms that extend specialty clinics beyond bricks and mortar, and healthcare executives need to work to understand how to use them to take down barriers, friction, and cost in their models.”

Before it can be expanded, Amazon Care has to work, says Panda. “The care needs to meet appropriate standards, and qualified providers need to find it worthwhile to become involved,” he says. “It's also important to note that there is a tremendous amount of technology embedded in clinical settings that can't just be made available via a smartphone. So, one area of innovation will be how to appropriately take technical capabilities, like EEG [electroencephalogram] for tracking sleep in our case, and making that mobile. There is a lot of engineering and user engagement needed to go from apps, to mobile technology that really breaks the bricks and mortar limit on healthcare.”