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AMAZON JUST PICKED UP A STETHOSCOPE From Kahler Slater’s Disruptive Competitor collection, as seen in Vantage©2021 Kahler Slater, Inc. 2 They may typically call the doctor’s office to leave a message or go online to schedule an appointment. They may even head directly to urgent care or the emergency department. They may have done any of these things - until now. Now they have a new option for healthcare; one they know and trust. This new healthcare option offers an intuitive digital platform linked to a voice-activated virtual assistant, powered by data analytics, and already knows what its consumers buy, browse, read, and even the groceries they buy. It can deliver products, including prescription medications, to most consumers’ doors in a matter of hours. This new healthcare provider is Amazon Care, and it’s coming to your town. SOMEONE IN YOUR COMMUNITY NEEDS HEALTHCARE RIGHT NOW.With nearly 70 million U.S. households having an Amazon Prime membership, Amazon Care comes to market with immediate access to a consumer base larger than any hospital, health system, or payer in America. In addition to chat and video visits for non-emergency episodic needs, Amazon Care also plans to offer the following and “more” according to their website: • Preventative care • Wellness services • Support for on-going chronic care • In-home “joint care visits” to set up ergonomic work-from-home environments • Sleep assessments Amazon Care also promises to “guide” its users to resources and referrals that it does not provide. Originally a benefit solely for Amazon employees in the Seattle area, Amazon Care will be available to all employers as an employee benefit and Amazon employees nationwide by this summer. There is little doubt that if Amazon Care is successful, direct-to- consumer service is not far behind. Due to COVID-19, Americans have raced to digital health solutions, have become comfortable with digital healthcare delivery, and have found value in the lower out-of-pocket prices and convenience that comes with on-demand healthcare. Amazon knows this; the timing to expand Amazon Care could not be better. WHAT YOU NEED TO KNOW ABOUT AMAZON CARE ©2021 Kahler Slater, Inc. 4 Kahler Slater AMAZON JUST PICKED UP A STETHOSCOPEExperts and thought leaders will prognosticate that the arrival of Amazon Care signals everything from the complete transformation of the healthcare industry to nothing more than a tempest-in-a-teapot. The impact on individual health systems will vary, but what is important to understand is that Amazon is playing a different game than health systems. So, what do we know and what do we think we know? Amazon can meet or exceed hospital and health systems’ ability to offer convenient, on-demand services. With a propriety Amazon Care app few health systems will be able to match Amazon’s ability to iterate their digital consumer experience as fast or with as much data powering the evolution. Amazon’s experience and sophistication with consumer segmentation A NEW KIND OF COMPETITION FOR HEALTHCARE. and purchasing patterns are unmatched and its user interfaces more intuitive than most. It can offer a consistent 24/7/365 experience - a perk few hospitals and health systems can compete with. Amazon plays a long game when it comes to pricing. Amazon will enter a market segment at a highly competitive price point. Along the way, Amazon will siphon away cash-paying and insured consumers as well as those receiving Amazon Care services as an employee benefit. What will likely be left behind? The uninsured, the underinsured, and those who cannot afford to pay for out-of-pocket services. Mission-driven hospitals, health systems, and provider organizations will be left to address healthcare disparities and complex psychosocial needs. 5 ©2021 Kahler Slater, Inc. Kahler Slater AMAZON JUST PICKED UP A STETHOSCOPEAmazon Care’s plan to offer ancillary services may create margin erosion for some organizations. Most hospitals and health systems derive more than half of their revenue from ambulatory services. As Amazon Care introduces services like phlebotomy, immunizations, and medication delivery, hospitals and health systems risk losing revenue as market share shifts to Amazon Care and its partners. As Amazon Care’s success grows, other services easily provided outside of traditional healthcare settings are likely to be introduced. Amazon Care risks fragmenting healthcare data. Amazon will likely leverage its own electronic health record platform for data archival and retrieval. This could limit clinical situational awareness among healthcare providers lacking access to Amazon Care’s patient health records and vice versa. Duplication of services, avoidable services, and contradictory recommendations and interventions are always a risk in this situation. While this can be prevented with a robust health information exchange with a bi-directional interface, it is unclear if this is part of Amazon Care’s operational plan. We can assume that when Amazon Care provides referrals and other resources it will be on Amazon’s terms, not yours. We can assume that when Amazon Care provides Amazon has a long track record of working with partner organizations and third-party outlets. With their relentless focus on the consumer experience, Amazon Care will likely ensure providers, hospitals and health systems receiving its referrals meet specific performance and experiential metrics. It is expected that consumer reviews and ratings will be highly visible to consumers. Consumer access to hundreds - if not thousands - of consumer experiences and reviews will further close the information gap between healthcare organizations and their consumers, forcing what some might describe as a much-needed change in how healthcare engages its consumers. ©2021 Kahler Slater, Inc. 6 Kahler Slater AMAZON JUST PICKED UP A STETHOSCOPEHOW DO TRADITIONAL HEALTH SYSTEMS RESPOND? It is unclear how Amazon plans to engage local hospitals, health systems, and providers, but waiting to see what might happen will not be an effective strategy. Organizations that will best adapt Amazon Care’s entry in their markets are those that proactively begin preparations now and look for opportunities to partner, particularly in areas where Amazon is not seeking to compete. While Amazon and healthcare organizations are playing different games, there are considerable opportunities for win-win-win relationships that will benefit everyone involved, including consumers. These win-win-win situations will require many hospitals, health systems, and provider organizations to rethink consumer access, clinical operations, experiential considerations, pricing, and transparency. Whether you choose to partner or compete, you need to develop a plan, ensure it ties back to your overall strategy, leverage your strengths, mitigate your weaknesses and deliver on your organizational definitions of performance and value. And, if you do plan to compete with Amazon Care, be prepared to compete aggressively on price and experience. They are one of the most well-capitalized companies in the world. They play the long game. Amazon’s entry into the healthcare delivery space will be disruptive. But it doesn’t mean the end of the world as we know it if hospitals and health systems proactively embrace the challenges and opportunities that lie ahead. Add in the big disruptors of Amazon and Microsoft entering the healthcare market. It’s no longer CVS and Walmart clinics, now we have these giants entering the market. These tech giants are very agile, healthcare is not. That’s the reason our partnership with One Medical is so important. Assistant Vice President Facility Development & Capital Planning, Mid-Atlantic Health System, Confidential Client If you can’t beat them JOIN them • Look to partners to bridge gaps in their care delivery model • Remove friction in care transitions • Increase digital access in under served and rural areas If you can’t join them BEAT them • Be fast; be convenient • Listen to consumers • Humanize the experience • Focus on quality without falling into the transactional trap of retail health 7 ©2021 Kahler Slater, Inc. Kahler Slater AMAZON JUST PICKED UP A STETHOSCOPEEnriching Life. Achieving Powerful Results. kahlerslater.com facebook.com/KahlerSlater111 From Kahler Slater’s Disruptive Competitor collection, as seen in Vantage linkedin.com/kahler-slater instagram.com/kahler_slater ©2021 Kahler Slater, Inc. Next >