By Scott Hampel
It seems everyone is moving into healthcare. It’s a rapidly growing industry, historically dominated by large, well-embedded companies and organizations, and “pure tech” companies have had difficulty breaking in. That, however, is changing.
Amazon, Best Buy and Salesforce, well-known consumer-focused retailers (the former) to companies primarily familiar only to those in marketing or related fields (the latter), want to get into the healthcare, and they aren’t scared of the traditional barriers that have caused others to take a second look before embarking on the healthcare journey.
These businesses have two things in common when it comes to entering the healthcare arena:
- Access to a considerable amount of data; and
- Years of perfecting customer service.
“The US health industry is undergoing seismic change generated by a collision of forces,” according to the PwC Health Research Institute, “including the shift from volume to value, rising consumerism and the decentralization of care.”
This collision is helping new players enter the healthcare game at a time when healthcare consumerism is on the rise along with all the costs associated with healthcare. “Consumers are spending mostly their own money for basic healthcare services, and they want to see value for that money like they do in other industries. They want reasonable prices, convenient hours and locations, and great service—not exactly attributes for which traditional doctor’s offices or hospitals are known,” according to consulting firm Oliver Wyman Health.
Healthcare consumers appear willing to give an unknown healthcare entity like Amazon a try. Part of this willingness may stem from the fact that all patients are consumers.
“Retailers put consumers in control, and their spaces are inspiring and engaging, whereas the traditional medical experience means waiting in a sterile, intimidating environment,” according to an article at HealthSpaces.
It’s hard to disagree with this statement, and the fact that healthcare has become more difficult to access has led healthcare consumers to a new reality in which many are willing to give more non-traditional care settings and providers a chance to prove value. The PwC Health Research Institute asked consumers if “technology companies” could better deliver on the promise of healthcare. Fifty-two percent and 58% said they were “very or somewhat confident” technology companies could “improve patient satisfaction and experience” and “aggregate personal healthcare information and make it more accessible to the patient,” respectively.
Amazon, Best Buy Acquisitions
When Amazon purchased Whole Foods a few years ago and gained access to more than 500 stores in the US and the United Kingdom, it was a purposeful move, which could contribute positively the company’s healthcare aspirations. These stores act as physical outlets for Amazon and there’s no reason the company wouldn’t or shouldn’t carve out some space in each for a medical clinic, just as retail pharmacies have been doing for years. The difference here is that Amazon and Whole Foods have a brand perception and equity that traditional retail pharmacies will never achieve. They are more incidental to the practical consumption habits of people’s daily lives than retail pharmacies. And, of course, they have great customer service and lots of customer data.
From online purchases to (possibly) wearables to the questions asked of Alexa, Amazon already knows a lot about us. “Amazon can theoretically collect lots of health data about its customers from their buying patterns,” CNBC reported. “It sells over-the-counter medicines, glucometers and other health products via its marketplace. It could analyze dietary habits based on buying patterns at Whole Foods.” It sounds like information that a care manager might find valuable, right?
In the meantime, Amazon and Best Buy continue moving directly into the healthcare market.
Amazon has announced it will provide its employees with a virtual health clinic. Using a form of telemedicine, Amazon can provide employees with 24/7 healthcare access and use its established fulfillment channels to provide prescriptions, DME and over-the-counter remedies. Like any other business entering a new market, Amazon is piloting the program. If successful, one can imagine the program rolling out across the US to 500 locations if not more. A few days ago, Amazon rolled out a pilot program allowing some Alexa users to get medication reminders and manage prescriptions via its smart speakers.
Best Buy remains focused on the health of older adults and purchased a firm that creates wearables designed to monitor older adults and provide advanced warning of falls. This builds on previous acquisitions and seems to cement the company’s commitment to improving the health of older adults. Gathering real-time data and acting on it likely is the goal for this program, which could be offered to other at-risk groups.
The Data Dilemma
To be successful these early entrants need to understand the huge amount of data they already have and will collect after starting new programs. The only way to that is through a comprehensive enterprise analytics program that brings understanding to the data by converting it into actionable information. Without analytics, including predictive analytics, simply having exabytes of healthcare data sitting on servers isn’t worth much to anyone and therein lies the dilemma. While many of these businesses have a considerable amount of data and will create even more, it remains to be seen how they will work with healthcare data, although Amazon, for example, has already taken steps in this direction, as mentioned earlier. “Vertical Integrators,” explains PwC Health Research Institute, “will collect a wealth of data and should invest in systems and staff to create customized customer experiences, reduce costs and improve outcomes. Integrators may not possess all of these capabilities and can partner, build or acquire to obtain them.” Once they figure this problem out and apply it in a healthcare setting, these entrants will be serious players and perhaps dominators.
Salesforce is one of the best examples of a company that has built its business on data analytics and has made a terrific entry into healthcare. The company is using this knowledge to roll-out its customer relationship management software to the healthcare industry. The idea is to connect patients, hospitals, providers, community groups and others who have a stake in healthcare to improve treatment outcomes using social determinants of health data, medical records and other information.
No matter how the movement of non-traditional healthcare businesses plays out—if traditional retailers make permanent in-roads or if traditional healthcare attempts to take back the progress made—data will be the deciding factor for winners and losers. With an estimated 2,314 exabytes of healthcare data to be created in 2020, the challenge of parsing it will only become more intense and time-consuming without enterprise analytics to sift through the records, do the work and give it meaning to improve the lives of healthcare consumers. The ability to make informed data-driven decisions is something many healthcare consumers would be happy to experience today. Nevertheless, the approach must be thoughtful.
As legendary basketball coach John Wooden said, “Be quick, but don’t hurry.”
Scott Hampel is president of MedeAnalytics.