Amazon's Next Health Care Move Shows Potential

Shortly after striking a deal to buy online pharmacy PillPack, Amazon is reportedly in talks to continue its push into the health care sector through a pilot that some say health insurers should be excited about.

The pilot — which hasn't been formally announced — would involve a startup company called Xealth, Amazon, Washington-based Providence Health & Services and University of Pittsburgh Medical Center, CNBC reported July 12. Xealth says on its website that "it enables healthcare teams to order digital content and services as easily as they do medications today."

Jon Kingsdale, managing director at Wakely Consulting Group, says the move is a logical extension of what Amazon is already planning to do with its PillPack acquisition: "picking out the tangible, material aspects of medical care."

The venture could make it easier for patients to navigate the fairly fragmented setup of device and supply vendors, he says, and for hospitals, the benefit could be greater adherence to post-discharge care.

Leerink analyst Ana Gupte added that if successful, this solution set will benefit payers and risk-bearing providers as it will reduce spend associated with medical non-adherence.

Amid all the promise associated with the pilot, however, are potential challenges for Xealth and Amazon if they aim to broaden the reach of their efforts down the road.

Michael Abrams, managing partner of the consulting firm Numerof & Associates, says one of those possible barriers is market access, while "the other obstacle will be convincing physicians — to bring them into the clinical process, if you will," he says.

According to Ashraf Shehata, a principal in KPMG's health care life sciences advisory practice, it's likely that the Xealth pilot will also have to contend with the complexities of the health care billing system. "But like any of these things, I think a lot of the players are definitely going to be up for the challenge," he says.

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