Amazon deepened its healthcare presence in 2018: What that means for ASCs

Over the past year, Amazon began to move further into several branches of healthcare, including supply chain, voice recognition and the retail market.

In January 2018, the company collaborated with JPMorgan and Berkshire Hathaway to develop innovative methods of reforming the healthcare system. Initially, the collaboration hoped to lower healthcare costs for their U.S.-based employees, but its effect could have a much further reach. The collaborative hired Atul Gawande, MD, to serve as chief executive.

A month later, the company launched 60 over-the-counter healthcare products under the private brand label Basic Care, including ibuprofen and hair regrowth treatment. In October, the company partnered with Arcadia Group, a business consultancy group, to launch consumer-use medical device solutions for issues such as diabetes and hypertension management.

The company's virtual voice assistant Alexa has also made its way into the healthcare setting, integrating with Nimblr, a healthcare artificial intelligence company. Patients are now able to schedule appointments using Amazon Alexa with some providers. Amazon also filed a patent for Alexa applications to help detect when users are sick and arrange for the purchase of medications.

Finally, the company invested in PillPack, a pharmacy startup, and the company hopes to expand its pharmacy business in the future, according to a CNBC report.

Looking to the future, the company plans to sell software that mines patient health records for data to help physicians improve treatment plans and providers to cut costs.

How could Amazon affect ASCs in the future?

"Amazon is a perfect fit for ASCs," said Z5 Inventory CEO Carl Natenstedt. "The whole Amazon model is well-suited to deliver and distribute to smaller-sized facilities. Amazon requires a business partner that's agile, which makes ASCs the ideal customer. They're able to make quicker decisions about who gets their business, so they can take advantage of Amazon's offerings, whereas a hospital has this entrenched relationship with traditional distributors. That's where Amazon fails."

The company's direct-to-provider model and focus on consumerism may also present an opportunity for surgery centers performing a high volume of non-complex procedures. Amazon could disrupt the vendor sales rep model in some cases.

"Common surgical procedures where the vendor rep is no longer needed present a unique opportunity for larger players like Amazon to disrupt the medical supply chain," said National Vice President of Sales and Marketing for Casetabs Mark Mele. "Offering pre-packaged instruments and keeping them on the shelf will allow Amazon to cut out the vendor and offer instruments at a reduced cost. Orthopedic cases are one area in particular where this model could work very well as procedures become increasingly more common, therefore the need for a rep [is decreasing]."

Read more about how Amazon could disrupt the ASC supply chain here.

Read a more in-depth timeline of Amazon's foray into healthcare during 2018 here.

More articles on surgery centers:
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