On Tuesday, the e-commerce giant unveiled its latest healthcare endeavor, Amazon Clinic, a “virtual health storefront” that can asynchronously connect patients to third-party telemedicine providers. It offers diagnosis and treatment for roughly 20 low-acuity, elective health conditions—including acne, birth control, hair loss, and seasonal allergies—at flat, out-of-pocket rates. (The service does not currently accept insurance.) It also refills prescriptions, which customers can send to any pharmacy, including Amazon’s. At its launch, Amazon Clinic is available in 32 states.
The Gist: This is exactly the kind of venture at which Amazon excels: creating a marketplace that’s convenient for buyers and sellers (patients and telemedicine providers), pricing it competitively to pursue scale over margins, and upselling customers by pairing care with Amazon’s other products or services (like Amazon Pharmacy).
Its existing customer base and logistics expertise could position it to replace telemedicine storefront competitors, including Ro and Hims & Hers, as the leading direct-to-consumer healthcare platform, at least among those that don’t take insurance.
It bears watching to see how Amazon builds on this service, includingwhether it eventually incorporates insurance coverage, partners with health systems (similar to Hims & Hers), or connects Amazon Clinic to Prime in order to attract greater numbers of—generally young, healthy, and relatively wealthy—consumers.
A recent STAT News article highlights a concerning new trend in direct-to-consumer pharmaceutical marketing, enabled by access to virtual care. Pitched as a tool for patient empowerment, pharmaceutical companies are now offering consumers immediate treatment for a variety of health conditions at the click of a button that says, “Talk to a doctor now.”
Over 90 percent of eligible patients receive a prescription for the drug they “clicked” on, after connecting with a virtual care provider on a third-party telehealth platform. Not only does this practice give drug companies direct access to prospective patients, but it also delivers lucrative data on patient age, zip code, and medication history that can be used to target marketing efforts.
The Gist: Articles like this remind us why the US is one of only two countries in the world that allows direct-to-consumer marketing of prescription drugs (the other, interestingly, is New Zealand).
As the number of Americans with a primary care provider continues to decline, this kind of Amazon-style, easy-button drug shopping experience will be increasingly appealing to many consumers. But wherever innovation outpaces regulation, situations in which for-profit companies prioritize profits over providing the best care for patients are sure to occur.
While we support the idea of greater consumer empowerment in healthcare, we worry that this highly fragmented approach to consumer-driven health can result in abuse and patient harm.
It’s long been accepted as a truism that “moms” make most of a family’s healthcare choices. This has led many health systems to invest in high-end women’s services, especially labor and delivery facilities, with the hope of winning the entire family’s long-term healthcare loyalty.
This conventional wisdom has existed since the middle of the last century, when the postwar Baby Boom coincided with the rise of commercial insurance. But it’s hard to find real evidence that these investments deliver on their intent—and we think the argument deserves to be reexamined.
An expectant mother is likely years away from her family’s major healthcare spending events. Giving her a fantastic virtual care experience, or taking great care of her teenager who blows out a knee playing soccer, is likely to engender greater loyalty to the health system when she’s looking for her first mammogram, than her labor and delivery experience from a decade earlier. That’s not to say that top-notch obstetrics isn’t important—but market-leading labor and delivery facilities are likely more critical for wholesale purchasers, such as an employer considering a narrow network, or for physicians choosing where to build an OB practice.
Direct-to-consumer strategies should be built on more sophisticated consumer research that takes into account the preferences of a new generation of consumers, for whom not all healthcare choices are equal—that same consumer will be in different “segments” and make different choices for different problems over time, not all pre-determined by one memorable birthing experience.