How Will Amazon Advance the Healthcare Industry?
I woke up one recent morning to the most amazing news: Amazon had bought One Medical Group, my primary care practice. I first discovered One Medical when my daughter, who lived in San Francisco, told me about this absolutely fantastic new primary care practice where if you just paid an annual $150 membership fee you got 24/7 access to medical treatment, including telemedicine, emailing your doctor, and Zoom visits -- a lot of things that are commonplace now but weren't in 2007 when One Medical was founded. Since health is my “hobby,” I petitioned its web site till One Medical Group came to Arizona, which took several years. When it did, I immediately joined.
One Medical Group spoiled me for primary care. They had committed staff who were mission-driven to change the health care delivery environment. They had appointments that began on time. Their doctors emailed. They gave you access to your information. They were all about convenience and customer service.
What an incredibly different experience.
Here’s the thing you know about me, if you read this. I always try out tech startups, and One Medical seemed to me just another startup that I could try. Technology made the difference.
I also tried another startup, PillPack, a mail-order pharmacy that sends you medication in little packets marked with the time you are supposed to take each pill and delivers monthly to your home. Founded in 2013, PillPack’s convenience model was an innovation at the time that has also now become common. PillPack was acquired by Amazon in 2018.
So it was with a sense of incredible elation that I woke up and thought “ healthcare is finally changing from the antiquated delivery systems that we've had all our lives to something that can really use technology in a good way--to help the patient.” You see, the past technological innovations have been mostly on the business side (the money side). EHRs, claims processing, and even much of AI has been designed to help either the payer or the provider.
Finally, better, more convenient healthcare is getting to the patient, the consumer.
The distinguishing feature of One Medical and other innovators is their software. The front office knows who you are, and online services have user-friendly interfaces, and during the pandemic they began to use Zoom like real people.
They don't lose your records, they don't deny you access to your records, and they let you see your test results online. In much the same way, PillPack operates transparently with a comprehensible interface and available human support.
It's no coincidence that Amazon acquired One Medical Group. I heard Jeff Bezos speak actually maybe 15 years ago in Silicon Valley at a Churchill Club meeting, and he said, among other things, that Amazon was in the customer service business and that its goal was to provide the best customer service anyone could ever have. He went on to do that. It has been Amazon’s differentiator in every industry it enters.
Yeah, I know about Amazon having our health data, and I know about how they treat their employees, and I know how big tech wipes out competition. But health care should never have been a for profit business once it got so big. It was once a business where doctors and patients could barter services, or doctors could work out of their homes or yours.
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Then came diagnostic technology and employer-based insurance, and with it the upward price spiral of the last fifty years as doctors began to make big money on the fee-for-service model and patients forgot what medical services cost.
Slowly, everything spiraled to become 18% of the US economy. In the 60s, the government got involved and “fixed” it for the elderly and the impoverished. Medicare, Medicaid and the VA take steps to control costs, but the pharmaceutical lobby and the constant march of technology have defeated them.
Today we have the following conundrum in the US: small employers can no longer afford to provide healthcare. Obamacare provides basic services along with often unaffordable premiums. Universal government sponsored healthcare like NHS is politically unpopular. Some parts of the system, like Pharma and insurance companies, make boatloads of money off inefficiencies.
The only way we can get to universal healthcare is if it is “sponsored” by private companies. Amazon, WalMart, Berkshire Hathaway and JPMorgan formed an alliance to provide care for their own employees, and it disbanded last year.
Amazon is trying again by acquiring small, innovative companies and trying to scale them through its own customer base and employees. Amazon’s previous acquisitions are run pretty independently from a brand perspective, and now Amazon can add its logistics and supply chain capabilities to its services and just make them even more efficient and affordable.
At least I think that is what is going to happen. Patients and providers have been wanting this to happen for 30 or 40 years, but the Health 2.0 movement, which was very patient-centric, opened people’s eyes at the turn of the century.
I know this for a fact: the bits and pieces of healthcare must be integrated if patients are going to get proper care. Technology can do this seamlessly now. It’s time.
In the 1980s the first HMO in Arizona, Intergroup, was an attempt to move the industry forward by capitating doctors, who might then be encouraged to teach patients to practice prevention. This was an unbelievable failure because the patients were absolutely unwilling to do any of the things that Intergroup offered-- nutrition and exercise classes and all kinds of innovations. My partner, Wayne and I, with our company Hardaway Marketing Services were handling the account, and we ran volleyball tournaments and 10 K races. We drank the managed care Kool-Aid.
Intergroup failed because no one thought about the patient's convenience or the patient's willingness to undertake any of these behavioral changes. It turns out behavioral change is difficult and takes time. Because of the way our insurance is structured, every time someone changes jobs they may have to move their health insurance to a different provider. Intergroup had no long-term way to track outcomes for these patients.
It wasn’t until the iPhone came along and Apple began monitoring the consumer and everyone started tracking their heart rates and their steps that at least SOME people started following their personal health. A small percentage of people now eat better, exercise more, and think about stress.
The HMO is being reincarnated as value-based care. Perhaps this time it will work.
It has been a long, heavy lift, but I have the long view and I've seen over one “covered life” (my own) how people can collaborate and actually produce customer-focused change.