Yahoo Finance Amazon executives: There's progress in the healthcare business
Amazon (AMZN) has been relentlessly pursuing a healthcare operation for the past several years, with a pileup of failures to show for its efforts.
That was, at least, until the pandemic hit.
The global outbreak of COVID-19 was a eureka moment for the tech and ecommerce giant, which led to the more coordinated health operation the company is building out today.
That's according to four Amazon health chief medical officers who gathered together for the first time ever to speak exclusively to Yahoo Finance at the HLTH conference in Las Vegas this week.
A disrupter yet?
Today, Amazon has a more coordinated health operation than in previous years, but it is still many years away from being a major disruptor in the $4 trillion industry, the CMOs said.
The story begins in 2020, when work from home, remote patient monitoring, and mail-order prescriptions saw sudden spikes in utilization and demand. It was also a time when Amazon's health efforts were still new, but struggling to find direction.
Dr. Vin Gupta, chief medical officer of Amazon Pharmacy, said the company was suddenly inundated with requests.
“We got approached in 2020 from every state government, public school district, sports teams, to do logistics,” Gupta told Yahoo Finance.
“It was at that moment, because the asks kept coming in, that we felt like the world thought of us as a key stakeholder in public health for the first time ... we’ve come to embrace it,” he said.
The seismic shift in daily life helped Amazon see what healthcare problems it could solve. With its successful last-mile infrastructure, it could quickly and easily get medical devices and prescription drugs to patients' front doors.
And with its growing cloud presence, it could find ways to not just serve doctors and health system needs, but also their customers — the patients — by offering virtual visits.
Some of the pieces that came together include the 2018 PillPack acquisition that eventually became Amazon Pharmacy; the learnings from Haven, the partnership with JP Morgan and Berkshire Hathaway, which eventually folded; and the 2019 launch of Amazon Care, delivering healthcare services for Amazon employees, which recently folded and gave way to Amazon Clinic.
The company now has a growing primary care offering with both in-person and virtual care, boosted by its $3.9 billion acquisition of One Medical, as well as the pharmacy, which is continuously looking for ways to get medicines and health devices to patients faster and more affordably.
Its entry into the space has caused concern over what level of disruption it can cause — and how the broader health ecosystem might be impacted.
“There’s this perception that we have this grand plan," said Amazon chief medical officer Sunita Mishra. "I’ll say that we’re really stubborn on this vision, but we’re really flexible on how we get there. We’re not going to be able to do it alone, we know that we’re going to have to partner, and we’re coming to this with a lot of humility."
Connecting the dots
If the company succeeds in “connecting the dots” of health needs for consumers, it could be hugely profitable for the company. But what those dots are is still being studied, the executives said.
And how much of it will be done through partnerships — which the company is now actively pursuing — or from internal growth remains to be seen.
Amazon could, for example, link other sides of its business together, like AWS catering to physicians with AI scribes, which could be a stepping stone to launching greater healthcare generative AI capabilities for doctors and patients. Alexa could also be utilized in a number of ways, adding a way to remotely monitor patients.
Even Amazon’s ownership of Whole Foods could play a role, the chief medical officers said. In particular, finding ways to connect patients to healthy foods that would improve health outcomes — a key driver of poor health, in some patient populations, known as a social determinant of health.
One Medical chief medical officer, Andrew Diamond, said that prior to the acquisition, One Medical had already, for instance, been thinking about how it might be able to influence members’ dietary or exercise habits.
“We just haven’t been able to prioritize that because there are all these other things we have to prioritize … in a primary care business,” Diamond said. “There’s still a lot of other foundational things that [need] to happen first, and there’s only so many things we can do simultaneously."
He added: "It doesn’t have to be everybody right now. We couldn’t handle everybody right now anyway. We’ve got to grow thoughtfully.”
And just like it did in retail, the company won’t disrupt healthcare overnight, said Amazon Clinic chief medical officer Nworah Ayogu.
“We’re trying to make things that should be easy, easier. We’re not reinventing the wheel. What we’re saying is if you smooth out this edge, the wheel will roll a little bit faster, or if you pave the road in front of it, the wheel will roll on the road a little bit better,” he said.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs and health policy and politics. Follow Anjalee on Twitter @AnjKhem.
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