What Amazon’s Recommendation Algorithm Could Do In Healthcare
At The Intersection Of Profit And Patient Outcomes, Amazon Is Standing At A Crossroads
Our healthcare team recently published our take on the potential impact of Amazon’s planned acquisition of One Medical on patient data privacy. Now we are digging deeper to understand what is possible in an Amazon-One Medical paradigm by unraveling how Amazon’s algorithm and current capabilities could make use of zettabytes of consumer and newly acquired patient data.
Unraveling Amazon’s Collaborative Filtering Engine (CFE) Algorithm
Today, Amazon leverages consumer data to drive sales, personalize product feeds, and implement dynamic pricing. We have all seen this in action. Amazon knows how to put your shopping preferences to work to personalize product feeds, but it doesn’t stop there. The retail titan also uses this data behind the scenes to forecast a general picture of your shopping trends, top sellers, and consumer behavior. Amazon uses predictive analytics for targeted marketing, which ultimately returns customer satisfaction and boosts consumer loyalty.
Transforming Big Data Today Fills Your Shopping Cart Tomorrow
Amazon’s CFE analyzes purchasing patterns of customers from recent buys, wishlist items, and shopping-cart saves then pulls information from product reviews and their most searched products. All of this information trains the CFE algorithm to make predictions about user likes and dislikes and then push additional relevant content to customers to drive purchases. Amazon collects every click, like, comment, and transaction to optimize supply chain and prices, predict what users will want to buy as add-ons, and to keep the consumer clicking. The endgame is to boost content engagement and improve the odds that a purchase will be completed. What exactly could this mean for patient data? Keep scrolling.
Customer Acquisition Is The First Step To Data-Driven Healthcare
With an acquisition of One Medical, the number one priority for Amazon will be transforming its 200 million-plus Prime members into primary care patients. Its ability to deliver, however, will require the acquisition of primary care practices to deliver this volume of care at scale. In a dynamic market of healthcare disruption, Amazon will need to chase this moving target and outmaneuver the competition. If Amazon can accomplish this, that is when it can set its sights on the next initiative: leveraging consumer/patient data to drive better health outcomes. Data insights could also be used to improve its other health and wellness offerings, such as Telehealth on AWS and Halo, to increase consumer buying power. A closer look at this analysis reveals two possible paths for Amazon’s use of patient data in the short term:
- The road to personalized healthcare. By leveraging their consumer profiles and security infrastructure, Amazon and One Medical can combine patient and consumer data to provide a more holistic view of the patient and in turn provide more convenient, individualized care. The more services that patients use, the greater the proliferation of data for Amazon to scoop up and analyze. Patients who opt in to the Amazon experience will be able to share details, habits, and information that the company can potentially use to enhance the patient experience. What could this look like? Imagine yourself perusing through the Amazon web page. You click on a brace for your wrist, and a website chatbot asks, “Are you having problems with your wrist?” then “Would you like to visit a nearby clinic?” and finally “Click here to make an appointment.” Patients would be able to find a provider, make an appointment, attend the appointment, and get their prescription medications delivered right to their door, all within hours. Functionality and operational workflows such as these could help improve access to care and boost medication adherence. Perhaps Amazon will use Halo and its health and wellness membership as a launching pad for delivering more preemptive care and patient engagement. The membership would allow people who opt in to experience the greatest level of personalization for their health and wellness experience. What if — for a nominal fee — consumers can get the benefits of data collection and analysis and share these insights with their provider or specialist, even if it is not an Amazon provider? Consider this: Amazon Halo’s new Movement Health feature could be used to send data dashboards that track, analyze, and display completed exercises and range-of-motion summaries to their physical therapist.
The next few months will be telling. What will make or break Amazon’s performance in healthcare is transparency. If Amazon fully discloses and demystifies its data sharing policies, it will succeed. If it underplays the privacy imperative, it will only exacerbate the erosion of trust in healthcare, lose customers, and bow out of the competition. Amazon will need to establish privacy notices and legal policies that will update in real time to keep patients informed of any changes to how their data is being shared and for what purpose. It will also need to have processes in place for consumers to revoke access to their data, if and when desired. Building and maintaining a data privacy communication plan will require an everyday commitment to win consumer trust and loyalty.
Stay tuned for our upcoming report that will further explore Amazon’s CFE algorithm and how it could impact healthcare. To learn more about patient privacy in the world of retail health disruption, schedule a call with us — we would love to speak with you!
Analyst Kyle Rybarczyk contributed to this blog.