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Will Amazon Survive within Healthcare?

January 10, 2019

Amazon appears to be on the verge of making game-changing inroads into the healthcare industry. The company has been investing in healthcare for years, but recently the pace of activity accelerated dramatically. Amazon is already a healthcare mover and shaker. Now the only question is whether it can effectively compete and thrive in a well-established industry that faces multiple challenges.

Amazon’s Clue-Dropping Year

Within the past 12 months, the retail giant acquired PillPack, a full-service pharmacy that specializes in delivering prescription medications directly to the consumer’s doorstep. The company recruited lots of executives with healthcare experience, including a former FDA executive. It rolled-out a line of over-the-counter healthcare products, and is developing healthcare-related artificial intelligence. Amazon partnered with JP Morgan Chase and Berkshire Hathaway to reduce healthcare costs for employees at the trio of companies. There were other new partnerships forged with Accenture, Merck, and Aurohealth, a generic drug company. Amazon also said it would start selling software that can quickly search health records, to make hospitals and research facilities more efficient.

Alexa and Telehealth

Plus, Amazon’s virtual assistant gadget, Alexa, could single-handedly disrupt the healthcare supply chain in unprecedented ways. Amazon is now collaborating with Omron to develop technology that will enable Alexa to read blood pressure. What if Alexa can be programmed to help patients with their in-home care and prescription reorders? Perhaps it could monitor conditions like diabetes. Could the device become a convenient platform for delivering telehealth? The possibilities seem endless, and consumers appear to be open to the idea. Results of a study published by Global Data indicate that the majority of Americans would like to be able to buy their meds via Alexa. Almost half of those surveyed would enjoy getting an Amazon Prime drug discount.

Security and Privacy Issues

But implementing those kinds of innovations may be easier said than done. Nearly 60 percent of those polled by Global Data also expressed reluctance about sharing their medical records with Amazon. Even if they trust Amazon, they may feel less confident in the company’s ability to safeguard Alexa technology from determined hackers. Cyber criminals have a strong preference for hacking into medical files. Amazon does, however, provide secure cloud services to sensitive entities including the CIA and other American spy agencies. So if they want to safeguard data, they know how to do it.

Potential Headwinds

Then there is the issue of healthcare industry regulatory oversight. Unless Alexa is given a green light as a HIPAA-compliant medical device, that technology may face severe restrictions. Perhaps that is why Amazon posted a job listing for a HIPAA compliance officer. Amazon also encountered resistance to its plan to supply large hospitals and major clinics with pharmaceutical products and ER supplies. Those institutions weren’t convinced that they were ready to adapt to Amazon’s unique buying procedures. After all, they have strong partnerships with existing suppliers and may not want to jeopardize those by experimenting with an upstart competitor. Amazon’s warehouses are also ill-equipped for storage of drugs that require special climate-controlled environments.

The coming year will likely be a pivotal one for Amazon in terms of healthcare initiatives. Only time will tell whether it’s up to the challenges that today’s complicated healthcare industry presents.