A Troop of 800lb Gorillas are Vying to be “The Amazon of Healthcare” and Traditional Healthcare Providers are about to get Mauled
First, I love Amazon. Mr. Bezos, please don’t turn off our Bluestream servers.
Now my groveling is out of the way I can say “being the Amazon” doesn’t necessarily have a positive connotation these days. Just this month, it was reported that Amazon copied products and rigged search results to promote its own brands. With trillions of dollars at stake in the U.S. healthcare market, many large players like American Well, Teladoc, and Amazon are motivated to steer those dollars to their own products and services—to be the Amazon of Healthcare.
Healthcare is now a consumer product- that’s great, right?
The COVID crisis educated patients about options beyond traditional brick-and-mortar healthcare. Virtual care shifted from necessary evil to an accepted standard and quickly evolved to be user-friendly and engaging. This consumerization of healthcare is accelerating the shift to Amazon-like platforms, threatening to leave traditional providers behind like Jeff Bezos blasting into space.
Traditional healthcare providers must adapt or die, and these organizations vying to be the Amazon of Healthcare are conveniently poised to offer “help”. That help comes with some serious strings attached.
It’s better to be the platform than the player (or the played)
Healthcare providers (whether traditional or Amazon-like) get paid for owning provider visits (fee-for-service) or owning patient relationships (value-based care). If you’re a hospital using a platform like Amwell that is gunning to “be the Amazon of Healthcare”, you’re feeding both sides of this equation at your own expense. You are a player on their platform. Or the played.
Amazon is able to replicate brands and products that sell by it being the platform upon which all manufacturers must sell: there is no other choice. John Miller Shirts, Allbird Shoes and other brands played on Amazon’s platform and realized short-term gains, but then got played as Amazon watched the success of those brands carefully and used the data collected to launch nearly identical, competing products targeted to the same consumers.
Letting the fox in the henhouse
It’s important to understand that companies trying to be the Amazon of healthcare are banking on collecting enough data and getting too large enough scale by “partnering” with traditional healthcare providers, with whom they will ultimately compete. Organizations like Amwell and Teledoc are the platform, and hospitals, physician groups and other traditional providers are the players. Once they hit critical mass, the guillotine comes down and ouch, heads roll.
If you don’t believe it, just take a look at their websites and you’ll find messaging targeting the same consumers’ health systems. We are very much in a land-grab for patient relationships and putting providers in seats.
Food deserts are here, are healthcare deserts next?
So- what happens when the Amazon of Healthcare wins over traditional providers. Food deserts in rural and urban areas were created by convenient access to junk food and the inability to sustain local, healthy options. The same will happen once Amwell, Amazon, etc. become the de facto care for these communities—local providers will vanish. Virtual care is great, but quality care depends on physical access to healthcare too.
In a world where non-traditional healthcare providers capture most of the patient relationships, hospitals and other traditional providers get relegated to dealing with the most severe, emergent issues only- and that’s just not sustainable in many small towns and cities.
How do you stop an 800lb gorilla from charging?
Take away its credit card! Seriously though- the punchline actually applies here. Remember that the platform gets paid for visits today and ultimately patient relationships as value-based care takes over. If you’re a traditional healthcare provider, you need to stop giving your patients to these organizations and stop giving them the data to build competing healthcare offerings.
You owe it to yourself and your patients to consider platforms that equip your organization to compete in a world of consumer healthcare, but don’t have a vested interest in disintermediating you from the process.
About Brian Yarnell
Brian Yarnell is a serial entrepreneur focused on improving access to quality healthcare through innovative technology. As the Co-founder and President of Bluestream Health, he helped grow the company from an idea to a commercially deployed product. Prior to launching Bluestream, Brian was the founder and senior executive at Starling Health, a bedside communications solution that he sold to Hill-Rom. Brian also sits on multiple non-profit boards in the health tech space.