Amazon's Impact on Healthcare

April 24, 2018
Panelists from L to R: Carissa Rollins, Chris Walton, Darin McDonald, and moderator Rajat Relan

If you're going to keep up, you have to move at the pace of Amazon. As Amazon joins forces with JPMorgan and Berkshire Hathaway to lower healthcare costs, it's increasingly clear no industry is exempt from the impact of Amazon.

Concord’s Relevant Health Roundtable hosted a panel asking the question, “Will Amazon take over healthcare like it took over retail?” Our panel of CIOs and retail influencers engaged in a thoughtful discussion: Carissa Rollins, CIO at UnitedHealthcare; Darin McDonald, Founder of McDonald Consulting and former CIO of NASCO; and Chris Walton, CEO of Red Archer Retail. Read on for a portion of the insights from this session.

Disruption is Inevitable

  • Having started from the ground up in the digital space, Amazon thinks and behaves differently from their competitors. They push key decisions down to the people working in it day-to-day, rather than slowing the process by waiting for an answer from the C-suite.
  • Amazon is 100% customer-obsessed – every decision focuses on how it impacts the customer. As users, we allow Amazon to encroach on us, because it enriches our experience and makes our lives easier. We don’t mind sharing what we purchase, buying into personalized offers, and even inviting Amazon into our home through Amazon Echo.
  • If you are using the term “transform,” then you’re already behind. Amazon makes a point to build transformation into every aspect of what they do – it’s a means to an end, not their actual goal.

Innovation in Action

  • Amazon approaches everything like a child learning to ride a bike – they just go for it, even if they fall and skin their knee. Any new idea is teased in a press release and given a “pizza team” (a group no larger than can be fed by two large pizzas) to get the wheels in motion.
  • Beyond the obvious advantages of being a trusted retailer with a unique, customer-centric perspective, Amazon has lots of data and knows how to use it. Whether they’re utilizing purchase history on or the data owned by AWS, Amazon has extremely powerful information – they just need to learn how to navigate the regulations in healthcare.
  • As a master of personalization, Amazon has the opportunity to innovate in the healthcare space by giving consumers tailored information specific to their health needs.
  • Jeff Bezos recently revealed that Amazon has more than 100 million Prime members. There’s a distinct opportunity to apply that model in healthcare – consumers are willing to pay for convenience and healthcare should be no exception.

Take Action

  • It’s important to move at the pace of Amazon. Healthcare is 5 – 6 years behind in terms of masking legacy systems. We can’t just throw out the business rules, but faster releases are a must.
  • Amazon is able to best serve their customers by focusing on universal truths about them. It’s time for the healthcare industry to ask what do our consumers universally want and innovate to that – there are many cases where healthcare members are inconvenienced simply due to cost advantages.
  • From a community perspective, Amazon is disadvantaged, because they have no experience in the physical realm. Healthcare companies have a much better understanding of what makes an experience enjoyable for a consumer and needs to take advantage of that before Amazon figures it out.

What’s Next?

Amazon is undoubtedly one to watch in healthcare. As they look strategically at the rising cost of healthcare for employers, it’s an almost certainty that they will design a program to their ideal experience. They always start with their own employees when experimenting to see how people adapt to changes and garner feedback to get it right. The healthcare industry needs to put the member first if they are going to compete.

Extra Credit

2018 Shareholder Letter from Jeff Bezos. Amazon’s CEO released his latest annual shareholder letter earlier this month and it’s considered a must-read for business professionals.

Chris Walton: Retail’s New Flywheel. Panelist Chris Walton describes Amazon’s transformative Flywheel concept in greater depth.

Jeff Bezos’ Two-Pizza Rule for Building Productive Teams. Learn more about the “pizza team” helping Amazon to push forward their innovative ideas.

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