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.
The Department of Health and Human Services (HHS) appears set to extend the federal COVID PHE past its current expiration date of January 11, 2023, as HHS had promised to give stakeholders at least 60 days’ notice before ending it, and that deadline came and went on November 11th. Days later the Senate voted to end the PHE, a bill which Biden has promised to veto should it reach his desk. Measures set to expire with the PHE, or on a several month delay after it ends, include Medicare telehealth flexibilities, continuous enrollment guarantees in Medicaid, and boosted payments to hospitals treating COVID patients.
The Gist: Despite growing calls to end the PHE declaration, and even as White House COVID coordinator Dr. Ashish Jha has said another severe COVID surge this winter is unlikely, the White House is likely trying to buy time to resolve the complicated issues tied to the PHE, some of which must be dealt with legislatively.
And with a divided Congress ahead, it remains to be seen how these issues, especially Medicare telehealth flexibilities—a topic of bipartisan agreement—are sorted out. Meanwhile the continuation of the PHE prevents states from beginning Medicaid re-determinations, allowing millions of Americans to avoid being disenrolled.
After COVID restrictions introduced millions of Americans to telehealth, it became an open question whether virtual care would revolutionize healthcare delivery, or turn out to be a flash in the pan. Using commercial claims data from Fair Health, the graphic above reveals that roughly one in twenty commercial medical claims are now for virtual care, a rate that has held fairly steady since dropping from its early pandemic peak. (These use rates likely extend to Medicare, as a Kaiser Family Foundation analysis showed that the virtual share of outpatient visits barely differed between those younger and older than 65.)
What could be considered a true revolution is virtual care’s impact on behavioral healthcare,which makes up nearly two-thirds of overall virtual care volume. According to Zocdoc, an online marketplace booking both in-person and virtual care services, 85 percent of psychiatric appointments booked in the first half of 2022 were for virtual care, dwarfing the virtual visit levels of the other top specialties.
Meanwhile, consumers have incorporated virtual care into their lives as a useful option, though not as the sole way they access care. A recent survey found that a near-majority of consumers have accessed care both virtually and in-person, far more than the number who rely exclusively on one channel or the other. The pandemic changed consumers’ baseline expectation of what care could be delivered at home. The ability to deliver accessible, efficient virtual visits and connect that care to in-person care delivery will be a competitive advantage in the “hybrid” care environment sought by many consumers.
Amazon and several other major companies have made numerous attempts to “disrupt” health care over the years without much success. But new acquisitions in primary care, home health care, and more may allow them to more successfully expand into the industry, David Wainer writes for the Wall Street Journal.
Competition heats up in the health care industry
According to Wainer, the United States spends a greater proportion of its economy on medical services than any other developed nation, making health care “too big of an opportunity to ignore” for many companies, including those in technology, retail, and more.
For example, Amazon has launched several forays into health care in recent years, although not all of them have been successful. Some of these health care efforts include its now defunct partnership with Berkshire Hathaway and JPMorgan Chase, as well as Amazon Care, the company’s primary care service that will shut down at the end of the year.
Amazon has also acquired several smaller health care companies in an effort to expand its reach. In 2018, Amazon purchased PillPack for $1 billion as a way to expand its online pharmacy business. Similarly, Amazon in July reached an agreement to acquireOne Medical, a primary care company, for roughly $3.9 billion.
Several other companies, including retailers like Walmart and Walgreens and large insurers like UnitedHealth Group* (UHG) and CVS Health‘s Aetna, are also looking to expand their health care offerings. In fact, CVS announced last week that it had purchased home health care company Signify Health for roughly $8 billion—beating out several other competitors.
So far, “[s]hifting social attitudes and market conditions have helped fuel the wave” of health care acquisitions from major companies, Wainer writes, and more are likely to occur going forward.
What companies are targeting in health care
In contrast to the more traditional fee-for-service model, many health care startups are moving toward value-based care, which encourages providers to help prevent illnesses, rather than just treat them.
According to Wainer, UHG, which includes a pharmacy benefit manager, an insurance business, and 60,000 physicians, has made the most progress transitioning to value-based care so far. For example, many of the multi-specialty physician practices UHG has purchased through its medical provider arm Optum Care focus on proactively providing patients home, virtual, and on-site care to help them stay out of the hospital.
In addition, UHG and Walmart last week announced a partnership to provide services and “improve the patient experience” for certain Medicare Advantage enrollees. Through the partnership, UHG will use analytics to help Walmart clinics deliver value-based care to patients.
Aside from value-based care, many companies, including Amazon and CVS, are looking to expand their businesses into primary care. Currently, there is a nationwide shortage of primary care doctors, which has led to worse health outcomes for many Americans.
By providing primary care services directly to consumers, Amazon and other companies are hoping to use the relationship between patients and their providers to sell even more services, such as prescription drug deliveries and more.
Overall, “staying healthy probably will never be the sort of frictionless, one-click experience that Amazon pioneered,” Wainer writes, but the company’s current involvement in the health care industry “is a testament to the fact that there’s a lot of money to be made by fixing America’s broken system.” (Wainer, Wall Street Journal, 9/9)
*Advisory Board is a subsidiary of Optum, a division of UnitedHealth Group. All Advisory Board research, expert perspectives, and recommendations remain independent.
Amazon announced it will shut down Amazon Care—its primary care service sold to employer health plans—by the end of the year. There’s one thing that Amazon’s decision will surely mean: It will continue to be fashionable to mock Amazon.
People may look at this, compare it to Amazon’s Haven misadventure, and say that everyone (including Advisory Board) who speculated that Amazon could succeed in health care is either naïve or delusional.
But there’s more to it.
In looking at what Amazon reportedly said about the challenges facing Amazon Care, we believe that the acquisition of One Medical is the clearest signal yet that Amazon intends to succeed at health care.
The problems with Amazon Care
Amazon Care appears to have struggled to understand the nuances and demands of care delivery, as detailed recently in the Washington Post. Clearly, the tension between expectations for growth and quality were real. This raised questions for us: Was Amazon going to truly “iterate” on its health care capabilities? When it came to care delivery, would Amazon get better, or would it do enough to get by?
Amazon concedes that its product was not comprehensive enough for its employer partners. It’s unclear whether that means it simply wasn’t saving them money, even if employees were using it. At the same time, we wonder how hard it was to persuade employees to embrace Amazon-branded health care or to attract employees to a product centered on virtual and home-based care—or some combination of the two.
Remember: Everyone had to try out telehealth in 2020 because, in many cases, they had no choice. There isn’t any similarly powerful and pervasive force pushing anyone to virtual-first care today. People tend to like virtual visits, but that doesn’t mean that they want to receive all adequately satisfy users or keep care from fragmenting with its mosaic of services, channels, and providers.
What shutting down Amazon Care suggests about Amazon’s health care ambition
Amazon’s willingness to jettison its homegrown but underperforming health care business suggests three things.
One Medical is the centerpiece of Amazon’s health care strategy, not simply one component among many. When viewed this way, the details of the acquisition make more sense than they did four weeks ago. Knowing that a virtual and home-based model wasn’t attractive for employers, we can understand more clearly why Amazon wanted a partner with both in-person and digital health capabilities. Knowing that its own product was struggling, we can see why it was willing to pay a huge premium for One Medical.
Amazon is iterating on its health care capabilities, but it is iterating at an enormous scale. “Fail fast” is axiomatic in technology. It’s usually applied to minimum viable products—applications and services that are quickly built, delivered, and assessed for their ability to meet customer demands and gain traction in the market. Products that don’t meet those demands are replaced as quickly as possible. Obviously, Amazon Care was not a minimum viable product. It was rolled out three years ago, and it offered telehealth services in all 50 states and in-home services in seven markets. But when you look at the pivot Amazon seems to be making from virtual and home-based care with Amazon Care to in-person and virtual with One Medical, it’s hard not to reach for the “fail fast” comparison.
Amazon is a different kind of competitor in health care. We can’t think of another organization that would spend years building out a care delivery enterprise, roll it out in 50 states, and then simply shut it down. We also can’t think of another organization whose alternative care delivery plan is to spend nearly $4 billion on another company. It’s not just the scale and the money—it’s the willingness to throw around those assets that makes Amazon a potentially potent competitor.
There are still enormous execution challenges for Amazon and One Medical. Massive disruption of the industry is not a given, no matter how much money is spent or how many companies are bought and/or fail.
It seems likely that the impact of Amazon on the market will be centered, at least for the immediate future, on the same direct-to-consumer approach that One Medical has taken and at which Amazon is expert in its other lines of business.
That does not mean Amazon can be dismissed as a dilettante or a dabbler in health care. Its mere presence in the market already seems to have sparked a bidding war for Signify Health. Amazon’s continued iteration of its approach to health care demands ongoing attention.
We’ve been noticing a disconnect recently in our conversations with health system executives. When we share national data that shows that emergency department visits are still down substantially from pre-COVID levels, the reaction is often one of surprise.
As one CEO recently put it to us, “We’re seeing exactly the opposite. Our ED feels busier than ever.” It appears that, upon further examination, what’s going on is a shift in the mix of patients who are visiting the ED. The lower-acuity, urgent-care level cases do seem to have shifted away from traditional hospital settings toward virtual visits and urgent care centers. That’s good news from an overall cost of care perspective, but it means that hospital EDs are increasingly filled with sicker, more acute patients.
One sure sign the mix has shifted: many systems are now telling us that the percentage of ED visitors who end up getting admitted is rising. But staffing-driven capacity constraints mean that it’s taking longer to find an inpatient bed for those patients, or to discharge them from the ED to other settings (or back home)—so the average length of stay in the ED is going up.
On top of that, many EDs are now seeing an increase in psych patients, who stay longer and require greater staff attention. All of that, along with staff who are completely exhausted and demoralized after the pandemic, has combined to make many EDs feel swamped these days—despite what the national data are showing.
The digital platform is designed to provide consumers with a coordinated healthcare experience across care settings. It’s being sold to Aetna’s fully insured and self-insured plan sponsors, as well as CVS Caremark clients, and is due to go live next year. According to CVS Health, the new offering “enables consumers to choose care when and where they want,” whether that’s virtually, in a retail setting (including at a MinuteClinic or HealthHUB), or through at-home services.
Patients will have access to primary care, on-demand care, medication management, chronic condition management, and mental health services, as well as help in identifying other in-network care providers.
The Gist: CVS Health has been working to integrate its retail clinics, care delivery assets, and health insurance business. This new virtual-first care platform is aimed at coordinating care and experience across the portfolio, and streamlining how individuals access the range of services available to them.
CVS is not alone in focusing here: UnitedHealth Group, Cigna, and others have announced virtual-first health plans with a similar value proposition. Any payer or provider who aims to own the consumer relationship must field a similar digital care platform that streamlines and coordinates service offerings, lest they find themselves in a market where many patients turn first to CVS and other disruptors for their care needs.
Welcome to Friday’s Health 202, where today we have a special spotlight on the pandemic two years in.
🚨 The federal government is about to be funded. The Senate sent the long-term spending bill to President Biden’s desk last night after months of intense negotiations.
Two years since the WHO declared a pandemic, what health-care system changes are here to stay?
Exactly two years ago, the World Health Organizationdeclared the coronavirus a pandemic and much of American life began grinding to a halt.
That’s when the health-care system, which has never been known for its quickness, sped up. The industry was forced to adapt, delivering virtual care and services outside of hospitals on the fly. Yet, the years-long pandemic has exposed decades-old cracks in the system, and galvanized efforts to fix them.
Today, as coronavirus cases plummet and President Biden says Americans can begin resuming their normal lives, we explore how the pandemic could fundamentally alter the health-care system for good. What changes are here to stay — and what barriers are standing in the way?
A telehealth boom
What happened: Telehealth services skyrocketed as doctors’ offices limited in-person visits amid the pandemic. The official declaration of a public health emergency eased long-standing restrictions on these virtual services, vastly expanding Medicare coverage.
But will it stick? Some of these changes go away whenever the Biden administration decides not to renew the public health emergency (PHE). The government funding bill passed yesterday extends key services roughly five months after the PHE ends, such as letting those on Medicare access telehealth services even if they live outside a rural area.
But some lobbyists and lawmakers are pushing hard to make such changes permanent. Though the issue is bipartisan and popular, it could be challenging to pass unless the measures are attached to a must-pass piece of legislation.
“Even just talking to colleagues, I used to have to spend three or four minutes while they were trying desperately not to stare at their phone and explain to them what telehealth was … remote patient monitoring, originating sites, and all this wonky stuff,”said Sen. Brian Schatz (D-Hawaii), a longtime proponent of telehealth.
“Now I can go up to them and say, ‘So telehealth is great, right?’ And they say, ‘yes, it is.’ ”
A new spotlight on in-home care
What happened: The infectious virus tore through nursing homes, where often fragile residents share rooms and depend on caregivers for daily tasks. Ultimately, nearly 152,000 residents died from covid-19.
The devastation has sparked a rethinking of where older adults live and how they get the services they need — particularly inside their own homes.
“That is clearly what people prefer,” said Gail Wilensky, an economist at Project HOPE who directed the Medicare and Medicaid programs under President George H.W. Bush. “The challenge is whether or not it’s economically feasible to have that happen.”
More money, please: Finding in-home care — and paying for it — is still a struggle for many Americans. Meanwhile, many states have lengthy waitlists for such services under Medicaid.
Experts say an infusion of federal funds is needed to give seniors and those with disabilities more options for care outside of nursing homes and assisted-living facilities.
For instance, Biden’s massive social spending bill included tens of billions of dollars for such services. But the effort has languished on Capitol Hill, making it unclear when and whether additional investments will come.
A reckoning on racial disparities
What happened: Hispanic, Black, and American Indian and Alaska Native people are about twice as likely to die from covid-19 than White people. That’s according to age-adjusted data from a recent Kaiser Family Foundation report.
In short, the coronavirus exposed the glaring inequities in the health-care system.
“The first thing to deal with any problem is awareness,” said Georges Benjamin, the executive director of the American Public Health Association. “Nobody can say that they’re not aware of it anymore, that it doesn’t exist.”
But will change come? Health experts say they hope the country has reached a tipping point in the last two years. And yet, any real systemic change will likely take time. But, Benjamin said, it can start with increasing the number of practitioners from diverse communities, making office practices more welcoming and understanding biases.
We need to, as a matter of course, ask ourselves who’s advantaged and who’s disadvantaged” when crafting new initiatives, like drive-through testing sites, Benjamin said. “And then how do we create systems so that the people that are disadvantaged have the same opportunity.”
A Colorado mom got quite the shock when she received a hefty “facility fee” bill for her toddler’s telehealth appointment.
Brittany Tesso said she had already paid a bill from Children’s Hospital Colorado for $676.86 for the 2-hour virtual visit for her 3-year-old son to determine if he required speech therapy, according to a report by KDVR, a Colorado TV station.
But 2 weeks later, she received a separate bill for an additional $847.35, leading Tesso to tell the station: “I would’ve gone elsewhere if they had told me there was an $850 fee, essentially for a Zoom call.”
Tesso said she was told the additional amount was for a “facility fee.”
“I was like, ‘Facility fee? I didn’t go to your facility,'” Tesso told the station. “I was at home and, as far as I could tell, some of the doctors were at home too.” Tesso said she was told by a hospital representative that it charges the same fee whether patients come to the facility or receive care via telehealth.
KDVR had reported an earlier story of a father who said he was charged a $503 facility fee after his son was seen at a medical practice in a building owned by Children’s Hospital Colorado, and roughly 20 viewers reached out to the news outlet about their similar experiences.
Tesso told KDVR that she believed the second bill was a surprise bill, and suggested that state lawmakers could do more to prevent such instances. An HHS rule banning surprise billing went into effect on January 1 of this year.
Adam Fox, deputy director at the Colorado Consumer Health Initiative, told KDVR that patients have little recourse because there are no regulations in the state regarding facility fees charged by hospitals.
In a statement provided to KDVR, Children’s Hospital Colorado said that the issue was not exclusive to the hospital, and that it continually looks at its own practices “to see where it can adjust and improve.”
The hospital added in the statement that it continues “to advocate for state and federal policies that address healthcare consumer cost concerns through more affordable and accessible insurance coverage and hospital and provider price transparency, while also defending children’s access to care and the unique needs of a pediatric hospital.”
In response to a MedPage Today request for comment, the hospital said it had no further information to share.
Telehealth is likely to remain a mainstay in healthcare delivery, according to a December Kaiser Health News (KHN) article, but experts also told KHN that it’s not yet clear how such appointments, and any accompanying facility fees, will be handled moving forward.
Every health system and physician group is now focused on strategies to make telemedicine more scalable across their networks. When we spoke recently with a chief medical information officer (CMIO) leading his system’s telemedicine strategy, he shared, “If there is one thing I wish executives would understand about telemedicine, it’s that it will never make doctors more efficient.”
His data show the average video visit takes just as long as an in-person encounter. True, there is no physical exam, but the virtual conversations can be lengthy. And adding in time lost to helping patients troubleshoot technology, some of his colleagues report that virtual visits may actually take a little longer.
He went on to explain that other kinds of virtual encounters, specifically asynchronous communication with a provider, sometimes supported by automated symptom triage engines like Zipnosis, are far more time-efficient ways to communicate with patients. Certain clinical situations may better lend themselves to these types of “e-visits”. Take dermatology, where sending a high-resolution picture of a rash to the clinician is more valuable than trying to view the problem live on a Zoom call.
Of course, video visits can be far more convenient for patients—and there is huge value in in providing access to patients wherever they are. But delivering telemedicine “at scale” to meet rising consumer expectations will require finding the right balance of asynchronous communication, telemedicine, and in-person visits to best fit specific clinical circumstances.
And we’ll need to rethink clinical workflow—centralizing some telemedicine delivery at the system level across individual practices.