Could Amazon provide better health spend value?

Amazon is likely to make “huge strides” in healthcare, says one data and analytics company

GlobalData, a data and insight provider with an interest in healthcare, says that Amazon’s business model facilitates easier connectivity between providers and patients, and with a powerful online platform and AI Alexa, it’s likely to stand the global giant in good stead.

It points out that despite the US spend of USD3.3 trillion – or USD$10,348 (AUD$14,069) per person on healthcare – and the fact that healthcare spending accounted for 17.9% of US GDP, the highest proportion in the world – patient outcomes could be significantly better.

“In a country like the US, where the economic foundation lies in capitalism, difficulties arise in unifying healthcare delivery practices across the country,” says GlobalData senior pharma analyst Pavan Kottamasu.

“With a wide variety of private insurance companies and federal medical spending programs, the US has an extremely complicated network of connecting patients with providers.

“A solution could be to move toward universal healthcare in countries such as Australia, Canada, Japan, Sweden, Switzerland and the UK, so that all patients would have adequate healthcare coverage and access to medical attention.

“However, that would mean dissolving multibillion dollar private insurance companies, an idea that would not go well with the companies themselves, and the pharmaceutical, healthcare and business companies in which they are deeply vested.”

GlobalData says that at the moment, the acceptable solution is for companies to determine ways to navigate the US healthcare system to find easier ways to connect providers with patients.

But outcomes could also be significantly better if patients had more frequent access to healthcare providers, and were better educated on healthier lifestyles. By focusing on preventative measures, the company says, patients would benefit in the long run and minimise their risk of developing chronic diseases.

“Amazon has already successfully shown the world that it can deliver products to consumers at an extremely fast rate and now has the potential to make huge strides in reducing wasteful spending in chronic disease management, over-utilisation of primary care and pharmaceuticals,” says Pavan Kottamasu.

Amazon has made a series of ventures and acquisitions of late, including the announcement in January 2018 that it would collaborate with Berkshire Hathaway and JPMorgan to launch a healthcare company for their 1.2 million combined employees in the US.

This venture is hoped to reduce the overall cost of care while improving health outcomes.

In February, Amazon revealed its exclusive OTC health care product line, Basic Care; it has also headhunted employees from health providers such as CVS, Express Scripts and UnitedHealth Group.

In June, it acquired US-based online pharmacy PillPack, which gives it access to pharmacy licences in all 50 US states.

Current ownership laws preclude Amazon from setting up a prescription providing business in Australia, and the Pharmacy Guild told the AJP in June that this is a positive for patients because “our regulatory environment is beneficial for patient safety and quality use of medicines.”

However other observers of the industry are expressing concern at the potential for Amazon to disrupt Australian pharmacy: Robert Read, CEO of MedAdvisor, told the AJP at the time that if it entered the market, Amazon could capture around 20% of Australian pharmacy business.

Amazon could “fairly easily” acquire a wholesaler and gain access to a ready-made supply chain, he warned.

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