Amazon’s (NYSE: AMZN) in-home care platform — Amazon Care — is currently designed to coordinate care for employees and their family members. In the not-too-distant future, however, it may be more generally used for chronic-disease management.
That’s according to Michael Abrams, managing partner of the global health care consultancy Numerof & Associates.
Abrams has been closely following Amazon’s health care plans since before the formation of Atul Gawande’s Haven in January 2018. His interest only increased when Amazon announced Amazon Care in September 2019.
“I think I said at that point, this was a test bed for the concept,” Abrams told Home Health Care News. “I fully expected that, assuming it worked out, they would expand more broadly. It really comes as no surprise, what they’re doing.”
In a nutshell, Amazon Care is a two-pronged care delivery model built on virtual care and physical, in-person visits from a medical professional, with all services coordinated through a special app.
Initially, Amazon launched Amazon Care as an exclusive in-home care offering for its employees in the Seattle area. The company expanded the program to all Washington employees last fall, then outlined a bigger, bolder U.S. expansion this March.
Under its recently announced plans, Amazon opened the full Amazon Care package to all employees in Washington state, including those working for other employers. By summer, Amazon plans to make Amazon Care’s virtual capabilities available to all employees across the country, with in-person care limited to a handful of markets until further notice.
An Amazon spokesperson reportedly told Investopedia last week that it’s already “in discussions with a number of companies” about the service.
“I think what is so attractive to them in this concept is the synergy that exists between telehealth and their online merchandising,” Abrams said. “They’re able to not only provide telehealth services with their substantial technological capability, but they can also fold into that their online merchandising. Now that they have Amazon Pharmacy, they can seamlessly build in the ordering and receipt of prescriptions. They can build in over-the-counter drugs that might be of value to the patient, even durable medical equipment (DME), if that is called for.”
Coordinating in-home care services for U.S. workers is a big opportunity for Amazon, but targeting the overall chronically ill population can be transformative for the company.
About six in 10 Americans live with at least one chronic disease, according to the U.S. Centers for Disease Control and Prevention (CDC), with common examples being heart disease, cancer or diabetes. Roughly four in 10 Americans have two or more chronic diseases.
Addressing chronic illness has grown into a top health care priority for health systems and payers alike, as chronic diseases are the leading causes of death and disability in the U.S. — and a leading driver of health care costs.
In 2016, the total costs in the U.S. for direct health care treatment for chronic health conditions totaled $1.1 trillion — equivalent to nearly 6% of the nation’s GDP.
“I sense that [Amazon is] going to focus on chronic disease,” Abrams said. “From a population health point of view, that’s where the biggest need lies. That’s where, I think, one of the enormous revenue opportunities lies. If they can contract with, let’s say, Medicare Advantage programs or other coverage programs to focus on that segment of the population, they can make a big impact and have a very compelling value proposition.”
A 2019 report form CB Insights drew similar conclusions.
If Amazon does decide to scale Amazon Care beyond the current employee-benefits context, the most difficult aspect would likely be beefing up its provider network, Abrams said.
Amazon has a ton of in-house technological advantages to scale a virtual care platform already, but the in-person component of Amazon Care would likely need more development.
“I think that it’s a heavy lift for Amazon to develop a network, even if it’s contracting with legacy health care providers,” he said. “I don’t think that they’ve had much experience in that space — and it’s labor intensive. So I guess I’m a little bit leery about whether or not that will actually materialize.”