Forty-nine percent of consumers surveyed in the Forrester Analytics Consumer Technographics® Healthcare Consumer Buyer Journey Survey, 2020, said they wished their digital healthcare experience was smoother and more intuitive like Amazon, Netflix, and Uber. With Amazon’s latest acquisition of One Medical now underway, the tech titan has an opportunity to make that wish come true.
Amazon’s move to acquire One Medical is hardly surprising. It was only just a matter of time before Amazon joined the latest slew of headlines highlighting competitive maneuvers by retail’s biggest players penetrating healthcare. Earlier this month, CVS announced its plans to acquire Signify Health in a quest to expand in-home health services. An Amazon-One Medical deal would add to the company’s growing arsenal of healthcare assets with the likes of Amazon Pharmacy, medication adherence, Amazon Care, Amazon Halo, and Alexa-powered devices with health-related skills. With over 157 million US Prime members, and now One Medical’s 767,000 members, Amazon has cemented its foothold in the healthcare market and is primed to disrupt primary care. In fact, Trilliant Health’s Sanjula Jain, Ph.D., said, “Approximately 44% of Americans have an active Amazon Prime membership, while the largest US health system, HCA Healthcare, serves just 1% of Americans” — let that sink in.
What does this mean for the future of healthcare? Amazon’s access to consumer data, its customer-obsessed philosophy, and its deepening healthcare pockets positions Amazon to shake up the status quo in healthcare and reinvent the patient experience for all. The potential acquisition comes at an opportune time, with the pressing need to improve access to healthcare and patient outcomes amid a burgeoning population of the chronically ill and elderly and sweeping provider shortages. Today’s fractured healthcare ecosystem has never been more primed for disruption. Amazon’s potential acquisition of One Medical could reinvent the patient experience. To make the biggest splash, Amazon will need to address the most vulnerable and underserved populations by increasing access to more affordable healthcare.
A Preview Of What Amazon’s Seat At The Healthcare Table Will Look Like
At Forrester, we are closely tracking the impact of retail disruption in healthcare. We identified several implications of an Amazon-One Medical acquisition on the healthcare ecosystem more broadly. Here is a sneak peek:
- A large swath of consumer data will drive convenient experiences. A fragmented healthcare system and a lack of data interoperability prevent providers from delivering convenient and preemptive care. An opportunity now beckons for Amazon to drive personalization across the care continuum. As the lead cloud computing platform that controls about a third of the cloud market, Amazon has the server capacity, storage networking, remote computing, and security capabilities to give consumers the convenient patient experience they desperately crave for healthcare. With a firm grip on zettabytes of health and consumer data, Amazon can leverage Amazon Web Services’ dozens of data centers to put this data into action, providing next-level patient experience and moving the needle on value-based healthcare.
- Amazon will aim to offer affordable and accessible care for the chronically ill and elderly. In less than two decades, older adults — those over the age of 65 — are projected to outnumber children for the first time in US history. Starting in 2030, the elderly will comprise 21% of the population. Additionally, six in 10 adults in the US suffer from a chronic disease. Amazon is honing in on these trends plaguing the healthcare industry while broadening its healthcare enterprise, and this was likely a key factor in its latest plan to acquire One Medical. Last year, One Medical purchased Iora Health, another primary care competitor focused on Medicare patients, in a $2.1 billion deal. This deal cemented One Medical’s position to deliver care across elder populations and the care continuum. Amazon’s commitment to easy, customer-centric experiences could help the chronically ill and elderly hurdle over traditional barriers for accessing care while appealing to the rise of consumerism driven by the pandemic.
- This could create a paradigm shift in the delivery of patient care. Amazon is known for delivering customer-obsessed and convenient consumer experiences. As Amazon applies this differentiator to the healthcare space, it will put pressure on traditional and retail health providers alike to up their game. This will drive the tech investment needed to engineer solutions that deliver proactive communication and care to patients in their moment of need and at a time and place they prefer. According to the HIMSS Future of Healthcare Report, 80% of healthcare providers plan to increase investment in technology and digital solutions over the next five years. Amazon will need to identify patient pain points, map patient journeys, and adopt solutions such as conversational AI to create a patient experience that wins consumer loyalty and improves health outcomes.
It’s Not All Smooth Sailing For Amazon: Two Key Considerations Will Make Or Break Success
- Amazon’s rocky relationship with trust will put its success in healthcare to the test. This is where both the greatest opportunity and responsibility lies. With the trust imperative now front and center in healthcare, Amazon will have to earn and maintain consumer trust. If Amazon creates a healthcare experience where consumers can have transparency and control over their data and their health outcomes, the tech titan will have staying power and the opportunity to revolutionize healthcare.
- Healthcare data interoperability and patient privacy concerns must be top of mind. Historically, the challenge of procuring regulated health data has been a lofty task. With HIPAA in the US and GDPR in Europe, many companies are facing an uphill battle on securing patient privacy while still providing the real-time feedback they crave. Healthcare data interoperability that can provide the longitudinal records needed in healthcare is still not commonplace in the ecosystem. For Amazon, there is the potential to leverage patient data to drive personalization across the care continuum and chip away at healthcare’s annual $4.1 trillion spend. Patient privacy and data security at every touchpoint must be a top priority.
At Forrester, we are watching intently as payers, employers, and retail companies vie for key stakes in the healthcare market. Even so, we are yet to be convinced that the movement of these players into healthcare substantially improves the quality of patient care and achieves the quintuple aim. One thing is for sure: As consumer expectations are shaped by the evolution of next-generation experiences in retail, we expect to see more acquisitions in this space and seismic disruption in healthcare. If you are looking to learn more about healthcare M&A trends, schedule a call with us. We would love to talk with you!