Amazon brings its cloud and supply-chain experience to healthcare

With this week's announcement of a chief operating officer, Amazon's joint venture with Berkshire Hathaway and JPMorgan Chase is starting to gel. And while there are few specifics about how the consumer giants plan on disrupting healthcare as we know it, industry insiders are starting to offer their own ideas.

Among those contemplating the future is CB Insights. The firm, which analyzes data on venture capital and startups, thinks Amazon could offer new models for supply chain, record-keeping and care delivery because of a strong cloud infrastructure and through decades of experience appealing directly to consumers.

"Amazon's best edge is its own brand and the fact that it makes most of its revenue outside of healthcare," said Nikhil Krishnan, senior intelligence analyst in healthcare for CB Insights. "Amazon can offer effectively zero-margin services as long as it makes the rest of its ecosystem more valuable."

Amazon has been tight-lipped about its healthcare endeavors, including its joint venture, for which it just hired former Comcast digital health general manager Jack Stoddard as COO. CB Insights expects those efforts to be extensive, drawing on its reach—with more than 300 million active customers—and infrastructure.

In pharmaceuticals, for instance, Amazon might streamline the supply chain, lowering costs for patients, payers and drugmakers. After announcing in June it would acquire mail-order pharmacy business PillPack for nearly $1 billion, Amazon now has a medication-specific delivery model it could pull into its own distribution model. That might include bringing retail pharmacies to Whole Foods and playing the role of pharmacy benefit manager, negotiating drug prices for small health plans and developing medication-adherence programs, according to the report.

Amazon might further expand its brick-and-mortar presence with clinics—a move hinted at by its recent hire of Martin Levine, former medical director for Iora Health, a provider focused on Medicare beneficiaries. Whole Foods CEO John Mackey has also hinted at the idea, saying that he wants to bring clinics to his employees and maybe to customers. The result might be something akin to Oak Street Health, which caters to Medicare beneficiaries with its network of primary-care clinics.

As it pushes into care delivery, Amazon might also change how providers access medical information. For instance, through its Lab 1492, the company is exploring new ways to access data in electronic health records. "Because Amazon doesn't have a piece of hardware that travels consistently with patients (yet), its best bet is to work on extracting data from existing EHR systems," Krishnan said.

One way to extract data could be with Amazon's voice assistant, Alexa.

Amazon is not alone in the voice approach. Epic Systems Corp. has been putting its own voice assistant, powered by Nuance, into its EHR software.

While Epic's software is HIPAA-compliant, Amazon's Alexa is not. That means, for now, that it's limited to dealing with general health information, rather than data that could be linked to specific patients.

Much of Amazon's potential work in healthcare, from patient monitoring to supply chain, will depend on its cloud. Outside healthcare companies already depend on Amazon Web Services' cloud services. Cerner Corp., for instance, uses AWS for machine learning and AI.

"Amazon can work with healthcare organizations to remove complexity from the supply chain and chain of information," Krishnan said.

The company's entry into the industry may be a reason for providers to use Amazon's cloud too. "Amazon is investing in a deeper, more sophisticated understanding of healthcare, and inherently this will make all of their services more attuned to the healthcare space," said Arik Anderson, CEO of medication-adherence vendor Adherium.

The cloud is a convenient entrance into healthcare for other big tech companies too. Google parent company Alphabet, for instance, has a Google Cloud team looking into improving the patient and provider experience. The company might leverage application programming interfaces for analyzing data in the cloud. Microsoft Corp., for its part, has brought its Azure cloud computing service to established healthcare vendors, such as Epic, which is using Azure for its predictive analytics and AI tools.

"Each of these vendors will develop industry specific offerings that will be optional for healthcare companies to leverage," said Bob Fuller, managing partner with consluting firm Clarity Insights. "They will continue to look for opportunities to obtain usage rights to aggregate healthcare data to mine for deep learning," he said, "and undoubtedly healthcare companies will have a large say into what access rights these platform providers will have."

Amazon, Google, and Microsoft (along with Oracle, Salesforce, and IBM) recently pledged to push interoperability in healthcare, especially for cloud- and AI-based tools. They might do that by encouraging standards, like FHIR, that would make data travel more seamlessly among organizations.

"Tech giants like Apple, Amazon, and Google are converging in certain areas, such as smart home and cloud platforms," Krishnan said. "Amazon has a head start in both areas and will likely try to keep its lead by offering more healthcare-specific use cases in the future."