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Amazon healthcare strategy is built on pilot projects

Amazon may be known as an online retail giant. But the company has its sights set on something else: healthcare.

Amazon's initial moves into healthcare have analysts like Forrester's Jeff Becker wondering what its larger game might be.

In the last two years, Amazon has increasingly set its sights on the healthcare industry as it makes acquisitions and tests healthcare products internally that could be pushed out to customers in an effort to solve larger issues, such as the lack of prescription price transparency and the high cost of healthcare.

The Amazon healthcare strategy includes acquiring online pharmacy PillPack and digital health technology startup Health Navigator. It also includes co-founding Haven. The initiative aims to use their combined resources and test new ways of lowering healthcare costs for their employees and is in partnership with Berkshire Hathaway and JPMorganChase.

"I think the most interesting thing they're doing is following along the storyline of bringing down their own employee medical cost," Becker said.

Jeff BeckerJeff Becker

Becker believes the company's strategy is currently focused on cultivating the use of voice technology in healthcare and creating a "more shoppable healthcare experience" for patients and employers.

Some efforts are already proving fruitful. Others are more of a question mark. Becker pointed to Haven as one place that may not be making the kind of progress it set out to make.

The big picture

The Haven initiative is combining data, technology and resources from Amazon, Berkshire Hathaway and JPMorganChase to lower prescription drug costs and medical treatment for patients, according to the company's vision statement.

Amazon announced the Boston-based joint venture in January 2018, but it didn't get the name Haven until earlier this year. According to Haven's vision statement, it's not looking to make a profit as it seeks to find ways to lower healthcare costs. Haven plans to "reinvest any surplus" back into the initiative's work to improve health outcomes and lower costs. While its current focus centers on employees of all three companies, the vision is to eventually share its innovations with others.

One of the first pilot healthcare services to grow out of the Haven initiative is Amazon Care, for Amazon employees in the Seattle area. The pilot service offers virtual and in-person care from Oasis Medical through a mobile app.

Becker called Amazon Care a "digital front door" for lowering employee healthcare costs by addressing an employee's minor healthcare needs and potentially sidestepping costly urgent care visits.

"If they can reduce the overuse of the ER, the digital front door strategy will pay for itself," he said.

Amazon Care also offers same-day prescription deliveries. The service utilizes Amazon's $753 million acquisition of PillPack, a digital pharmacy that sorts medication by dose and delivers to a patient's door. The PillPack acquisition has since been rebranded as PillPack by Amazon Pharmacy. This month, it started working with Blue Cross Blue Shield of Massachusetts by integrating pharmacy services into the health insurer's "MyBlue" app.

Amazon also acquired a start-up called Health Navigator earlier this year, its first healthcare-related acquisition since PillPack. Health Navigator provides services such as online symptom checking and triage tools for digital health companies seeking to steer patients to the right location to seek care. The acquisition plays a role in the overall Amazon healthcare strategy as it will become part of the Amazon Care health service.

Kamaljit BeheraKamaljit Behera

"If you go by what Amazon's spokesperson revealed, they want to eliminate costs associated with travel, as well as the inconvenience associated with waiting times for patients," Kamaljit Behera, an analyst at Frost & Sullivan, said. "This is where we see Amazon coming strong into the telehealth space."

The work Amazon is doing through the Haven initiative and pilots like Amazon Care points to what Becker thinks will be the wider Amazon healthcare strategy: a one-stop-shop for patients seeking healthcare options.

What if there was a marketplace for shoppable healthcare experiences?
Jeff BeckerAnalyst, Forrester

"What if there was a marketplace for shoppable healthcare experiences?" Becker said.

That idea is a long way off, but Becker believes Amazon is testing the idea now, starting with its Amazon Care pilot, to find ways to introduce technology and cut down on costs. Yet beyond Amazon Care, the Haven name hasn't been associated with many projects, and Becker said there hasn't been much in the way of updates about Haven and the work Haven CEO Atul Gawande, M.D., has been doing -- something he will be looking for in 2020.

Behera echoed Becker, saying he believes the Amazon healthcare strategy going forward will be to extend health services with a more consumer-centric offering.

"Amazon will be looking to create a much more curated, personalized space," Behera said.

Amazon will continue focus on voice

Amazon's main goal appears to be lowering healthcare costs through its efforts with the Haven initiative, but one area Amazon will continue to develop is voice technology in healthcare, Becker said.

Early partnerships with health systems like Boston Children's Hospital to build Alexa skills, or voice capabilities, served as indicators of the company's interest in healthcare. In 2016, AWS partnered with Boston Children's to start building Alexa skills for parents, Becker said. Recently, Amazon announced the creation of a skill that enables Alexa to refill prescriptions by voice, as well as remind patients to take their medication.

Amazon has continued to build out Alexa skills for the healthcare industry, and Becker speculates that Alexa will be the first virtual assistant to be HIPAA-compliant. Indeed, Amazon is creating healthcare skills that are etching closer to being HIPAA-compliant, such as Express Scripts and Cigna Health Today, which give eligible customers the ability to use voice to manage prescriptions and engage in health improvement programs.

Becker said Amazon has six ongoing protected health information-processing pilot programs. He described the company as the first to "cross the finish line" for voice-only two-factor authentication, which first authenticates a voice profile and then asks for a unique verbal pin to access protected health information (PHI).

"We've been waiting for some kind of way they are going to overcome the authentication requirements for starting to process PHI," he said.

As Amazon builds healthcare skills for Alexa, Becker said AWS will eventually play a major role as a data processing platform for the Alexa voice skills. At the recent AWS re:Invent 2019 conference, Amazon introduced Transcribe Medical, which records patient-doctor interactions and turns voice into text. The service is helping clinicians with medical notes, but Becker believes it points to a longer-term use case as a data processing tool.

Transcribe Medical can be made more robust by combining it with services like Amazon Comprehend Medical, which uses natural language processing and machine learning to extract pertinent pieces of medical information from unstructured text, according to Becker.  

"If you have a HIPAA-compliant Alexa service, Transcribe Medical will convert those conversations to text, and then Comprehend Medical will identify clinical facts within that text," Becker said. "You're starting to see a more compelling set of capabilities for having medical conversations with consumers over a voice channel. I think that's part of what they're building."

Frost & Sullivan's Behera said Alexa and voice technology is an integral part of the Amazon healthcare strategy. It's looking to address a known healthcare pain point -- physician burnout -- with emerging tech.

Based on industry estimates, 40% of physician burnout is related to the EHR, Behera said. While interacting with a patient, physicians enter information into a patient's electronic health record, a process that can be burdensome and negatively impact the patient-physician relationship. Transcribe Medical, which is HIPAA eligible, could reduce the data entry burden. EHR vendor Cerner is partnering with Amazon to introduce the service as a digital assistant for providers.

"AI-driven interactive, virtual assistants are becoming a common background technology for medical transcription, documentation … and even customer relationship management," Behera said.

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