The online giant is tapping into the increasing popularity of — and demand for — telemedicine services and virtual care in the wake of the coronavirus pandemic.
The past three months have been a whirlwind of disruption for the health care industry. Haven — the much-touted employer-sponsored health care joint venture that paired Amazon with JPMorgan Chase and Berkshire Hathaway — disbanded in January. Amazon is now going it alone, a major indicator that the vast online company has no plans to simply ease into the marketplace with its Amazon Care program.
On March 17, Amazon Care expanded its efforts from providing virtual and in-home health care services to only Amazon employees to now offering them to all employers throughout Amazon's home state of Washington. Plans call for taking its virtual care nationwide this summer, and in-person health care services will be rolled out in such major cities as Washington, D.C., and Baltimore soon, as well.
The Amazon trap Cigna, Aetna and others in the health care space would be well-served to look at what happened to Toys "R" Us or Borders not so long ago.
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"We don't know what Amazon is doing, but we can read the tea leaves," Mick Rodgers, managing partner of Axial Benefits Group, said during a webinar the Burlington, Mass.-based consulting firm hosted for benefits brokers on April 1, titled "Amazon Care: A Serious Threat!" "This is going to be a threat we're going to have to contend with. There's no longer the thought that 'They can't do this.'"
The online giant is tapping into the increasing popularity of — and demand for — telemedicine services and virtual care in the wake of the coronavirus pandemic.
"Health care is already being disrupted at the edges as digital-first companies expand their footprint in primary and urgent care, and consumers become more comfortable with virtual care delivery," Rodgers, who also is founder of the Alliance Healthcare Coalition, noted in his presentation. He added that Amazon Care likely will position itself as an alternative to the likes of Aetna, Blue Cross Blue Shield, Cigna, and other large insurance providers. (During a question-and-answer session, Rodgers also said he believes that this is just beginning for Amazon Care predicting that it eventually will disrupt such ancillary health care insurance industries as dental and vision.)
In advance materials promoting the webinar, Rodgers said Amazon Care is "a solid offering and … a bigger threat to our industry than any governmental programs or legislative initiatives." One estimate has placed Amazon's potential revenue from the health care sector at $3.5 trillion by incorporating everything from cloud computing to medical records technology.
Amazon Care's biggest targets, Rodgers said, will include "middlemen that are value extractors and have large profit margins," service areas in which customer experience has been "an afterthought," and companies that rely on opaque pricing for their business model."
"Can you think of an industry that relies more on opaque pricing than ours?" he asked webinar viewers.
To help benefits brokers prepare for and navigate the challenges Amazon Care presents, Rodgers suggested several strategies that he said will help them survive the disruption. They include:
1. Adding value to what you do.
Personalized attention is going to matter now more than ever, Rodgers said.
2. Selling like a tech company.
That means rethinking how your benefits company runs. Rather than an office structure that has one person researching and contacting prospects, cold calling them and scheduling appointments, and then meeting with those prospects and converting them to clients, Rodgers suggested dividing those duties among more employees.
3. Aligning with service providers that can assist with repeatable workflows and process for scale.
In other words, make sure you and your team know what it costs to acquire and manage a client. Then make adjustments to that process accordingly, and seek partnerships that can help you maintain that level of service and fiscal responsibility.
4. Not becoming a "pirate" or a "parrot."
By this, Rodgers means that all benefits brokers should understand and believe in the changes they make, and implement them for the right reasons — not just because competitors are doing it. In other words, "Walk the walk," he said.
"Amazon is aiming higher than our market," he concluded, "but we could be collateral damage if we're not ready."
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