Industry Voices—Why Amazon should push traditional payers to embrace consumerism

As the tech giant’s healthcare venture takes shape, incumbent insurers need to deliver a better product to consumers. (Sundry Photography/Shutterstock)

Amazon keeps making moves in the health care space, and if health insurance leaders aren’t paying attention, they should be.

In mid-October the e-commerce giant announced its acquisition of Health Navigator, a startup that offers leading-edge tools for online symptom checking and triage; it partners with telemedicine companies to connect patients to nurses and physicians through live chat and video technology. Amazon said the tools would be folded into Amazon Care, the virtual clinics the company is piloting with its Seattle employees.

Combining that move with Amazon’s $753 million purchase of online pharmacy PillPack last year, and the development of Haven, its joint health venture with JPMorgan Chase and Berkshire Hathaway, starts to bring Jeff Bezos’ vision—of a vertically integrated, lower-cost and more patient-friendly future for healthcare—into focus. 

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Here’s what the recent moves tell us about that vision: It’s about data and consumer experience. The Health Navigator and PillPack acquisitions will give Amazon new offerings for its employees and, eventually, customers. But more importantly, in my view, both deals give Amazon valuable new data streams that will help its technologists and data scientists build a more efficient, effective healthcare product. 

RELATED: Haven teams up with Aetna, Cigna to offer plans to JPMorgan workers

Just as importantly, the new tools bolster Amazon’s ability to manage and control the consumer experience as it rolls out Amazon Care. Combining data and consumer experience will yield new information about how consumers want to interact with health companies.

Health-insurance incumbents need to watch closely. Bezos and his team have proven remarkably effective at not only giving customers what they need and want at a low cost but also at using vast troves of data to anticipate those needs and wants—and then communicate them in ways that drive individual customers to take action.

While the specifics of Amazon’s ambitions remain shrouded in secrecy, insurers can look at its success in the broader consumer space for a preview of what’s to come—and to understand how established players can adapt to remain competitive.

  • Data knows best. By collecting information on a customer’s past behavior, companies like Amazon or Netflix can accurately predict future preferences and needs. In healthcare, that means capturing data from claims, providers, pharmacies and user behavior and then crunching it to understand the customer’s next-best action. It’s more complicated than predicting when you’ll need more toothpaste, but expect Amazon to apply the same principles and technology to influence patient behavior. 
  • Convenience is king. Amazon Prime’s one-day (or less) free delivery has transformed e-commerce and laid waste to the brick-and-mortar retail business. That level of convenience is sorely lacking in healthcare. When a member has strep throat, the last thing they want to do is drag themselves to a doctor’s office then wait a half-hour for a doctor to prescribe an antibiotic they already know they need. Technology can circumvent that with at-home consultations via telemedicine, perhaps even AI-driven diagnoses and prescriptions. 
  • Highly suggestible. Amazon seems to know what you want before you do—and it’s very adept at communicating that to you. It will send you an email when something you looked at is on sale, hit you with a prominent link on the site to remind you what you searched for last time, and send ads for those things to follow you around the internet. It will even suggest products that you had no idea you were interested in based on analyzing what similar people are viewing and purchasing. Health insurers could be using this kind of personalized marketing to remind members about appointments or prescription refills, to alert them to new, relevant tools for managing their health, and suggest low-cost care options. 
  • Touch of a button. Modern consumers expect dynamic, intuitive, easy-to-use digital interfaces. Health insurance companies have thus far struggled to deliver. Payers’ ability to attract and retain members will depend largely on how easy they can make it for members to engage with and use their benefits on digital devices. Here again, timely delivery of useful information is critical. 
  • Agile adopters. Amazon’s success has largely been fueled by its ability to adapt to consumer preferences faster than the competition. But Amazon and its digital-age brethren aren’t weighed down by legacy systems and processes built up over decades of evolution and acquisition. Payers can’t simply inject agility into their DNA. But they must become agile. The quickest, most promising route is to partner with the best of the many digital-native companies developing technology that can work with and enhance—not replace—existing systems.  

RELATED: Amazon launches pilot of virtual employee medical service Amazon Care

Amazon isn’t the only force pushing the healthcare industry in a more consumer-friendly direction. The 2018 CVS-Aetna merger was a direct shot across the bow to the health insurance status quo. The Affordable Care Act, with its requirement that insurers market their products to individual consumers, incentivized and inspired a wave of consumer-centric thinking. 

But now, here comes Amazon, with a financial war chest that will enable it to invest in the engineering, research and development needed to develop the tools, systems and platforms that could form the foundation of a new healthcare paradigm for its employees. And there’s no reason to think the company won’t try to scale if they achieve internal success. 

Insurers don’t have to match them step-by-step—for now. But with each new announcement and acquisition, the digital healthcare revolution creeps a bit closer and the pressure mounts on established players to embrace the change. 

Mark Nathan is CEO of Zipari, a company that creates consumer-experience technology for the health insurance industry.

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