Amazon is the disruptive threat that is considered by many healthcare corporate strategists during their annual planning cycle. Amazon is a threat because they have a demonstrable track record of wringing out the inefficiencies in markets.
The acquisition of Whole Foods terrified the traditional grocery chains — and the market agreed driving down their stock prices the day of the announcement. A year and a half later, Amazon has shown the ability to grow their Prime membership via their Whole Foods channel. They are capturing “big data” shopping habits which will ultimately fuel the pivot to the grocery home delivery market. That is the nightmare scenario for grocery stores looking at becoming the next Borders bookstore.
That transition will be driven by improving the customer grocery shopping experience.
Amazon’s first significant foray into healthcare is the acquisition of PillPack, an online pharmacy company. PIllPack simplifies medication management for consumers by delivering packets with presorted does. A person receives a packet with all of their day’s pills in a single pouch.
The interesting part of the strategy is that they are effectively targeting the small population of individuals that consume the vast majority of prescribed medications.
The acquisition of PillPack gave Amazon a foothold in all 50 states. This foothold will greatly accelerate its entry in to this regulated space. The stock prices of CVS, Walgreens, and Express Scripts immediately took a hit the day of the announcement. CVS has since launched next-day prescription delivery services in an effort to fend off Amazon’s approach.
Amazon chose this healthcare entry point because of the inefficiency of the current market, as well as the poor customer experience. This approach is in keeping with Amazon’s relentless focus on customer as they transition into new markets.
It is interesting to revisit the 1999 CNBC interview with CEO Jeff Bezos in light of the above two transactions. That theme is repeated again in the 2018 letter to Amazon shareholders. If you look back at all 23 letters to shareholders, the word customer appears 443 times making it the most common word in all letters.
By contrast, Amazon is mentioned only 340 times.
How does Amazon achieve their focus on customers without having direct dialogue? Have you ever been able to get someone on the phone at Amazon? Universally, the answer is no.
- They accomplish this by leveraging their digital platform to observe online behaviors.
- They experiment relentlessly to improve workflow.
- They leverage data and AI to anticipate their customer’s needs.
This sounds like a great model for AngelMD. Our digital platform will scale to 100K physicians by restlessly improving the user experience and anticipating their needs related to insider access to information and education.
Later this year we will be introducing the concept of community leaders focused around specialty groups. Their role will not be to call every physician but rather monitor signups, site traffic, conduct small focus groups, and feed product improvement recommendations to the software team.
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