Amazon's Next Battlefield: Healthcare | Overseas Weekly Selection

Compiled by/Jun Lin

Millions of people speak to Amazon's voice assistant every day, mostly with simple instructions, such as "play music" or "set a timer of 11 minutes (cook pasta)". But at the Methodist Hospital in Houston, the command Amazon's smart voice will receive will be: "Operation begins."

In the past year, eight hospitals cooperated with Amazon Web Services (AWS), Amazon's cloud computing department, to let voice activation enter the experimental operating room. The technology behind this is consistent with that used by Amazon's smart assistant Alexa. Voice commands run through the important steps of surgery, and surgeons will confirm certain operations through oral commands, such as anesthesia.

Nicholas Desai, the ankle surgeon and chief medical information officer of Houston Methodist Hospital, said: "Because it uses my voice as the command to complete these operations, it will not miss any steps. When the operation is completed, the intelligent assistant will write these as a complete activity into the electronic case. Therefore, we will be notified if there is any omission. "

In the hospital's consulting room, Amazon's technology is also listening attentively.

The hospital said that with the patient's full consent in advance, Amazon's technology will listen to various details that can be written into the health record, and then analyze it to give a more comprehensive treatment plan. Desai said, "My digital voice assistant is in the clinic with me to listen to and manage the treatment of patients."

He called the digital voice assistant "the second pair of ears". He said that with a voice assistant on the side, I can concentrate on talking with patients instead of tapping the keyboard, which is equivalent to providing better overall care for patients.

Picture: Medical staff of Houston Methodist Hospital

Amazon's plan in the medical and health field is the same as that in other markets, that is, to penetrate all aspects of the industry, with its production tools and platforms. Intelligent voice system is one of them.

Amazon is launching a series of consumer oriented medical and health services, such as online pharmacy and telemedicine. Amazon is also steadily developing its function through AWS - creating a new comprehensive care operating system that can not only manage medical records, but also use AI to predict when a person may be ill.

Amazon has always been regarded as a sleeping giant in the medical and health field. Now, the giant wakes up.

Amazon's target audience is amazing. The company quickly sold its health care services directly to consumers, employers who wanted to cut labor costs, and hospitals and medical networks responsible for managing care.

Figure: Amazon's strategy is to persuade consumers to choose online services rather than trusted physical hospitals

The competition in the medical and health field has already been very fierce. Technology giant Google and Microsoft Own cloud platform and AI products; Retail magnate Wal-Mart Recently, it has opened many clinics in the United States, providing "emergency care, X-ray diagnosis, consultation, dental, vision and hearing diagnosis and treatment services".

If Amazon can break through the tight encirclement in such an involute competition and calmly dispel the lingering antitrust haze, health care will become one of the biggest opportunities for the new CEO Andy Jasi.

Brent Thill, an analyst with Jeffrey, said: "Amazon does not need to 'find the password overnight' in the medical and health field, but if it really opens up a new world here, then the power of this giant can not be underestimated."

　　 Technology giants compete

In the United States, the cost of health care has long been out of control. The American Medical Insurance and Medicaid Service Center (CMS) expects that in 2021, the medical and health expenditure of the United States will reach 4.2 trillion dollars - about 18% of GDP, and by 2025 this expenditure will reach 5 trillion dollars.

Most of the costs are borne by the employer. According to a survey conducted by Kaiser Family Foundation, the vast majority of executives (87%) said that in the next five to 10 years, the medical and health expenses of employees will become unsustainable.

But at the same time, new trends are emerging. Health tracking devices are becoming more intelligent and popular. The quality of network connection is gradually rising and the price continues to decline, which makes tele care being accepted by more and more people. With big data processing, AI is opening up a broader path for creating new treatment or nursing programs.

Technology giants undoubtedly believe that they are in the wind. In 2020, except for the business established internally, Facebook , Amazon, Microsoft, Google and Apple Total healthcare investment soared to $3.7 billion. CB Insights data shows that in the first half of this year, another 3.1 billion dollars have been invested in this field.

Figure: Healthcare will become one of the biggest opportunities for Amazon's new CEO Andy Jasi

Amazon is different in that it uses its existing infrastructure, especially its huge storage center and distribution empire, to vigorously develop medical care.

Desai outlined his vision on how to operate high-tech services: "I have drug delivery services; Prime members can deliver drugs to patients as soon as possible; Alexa voice assistant can make an appointment with a doctor, and also let you see a doctor through vision, consultation and digital means. "

　　 Employee first

Although the potential is huge, Amazon also made some mistakes in the medical and health field at first.

In 2018, Amazon announced that JPMorgan Chase and Berkshire Hathaway The company cooperates to establish a medical and health company called Haven, which aims to reduce medical costs and improve results for employees of the three groups.

As soon as the announcement was made, the share price of medical and health competitors plummeted rapidly - the share price of Walgreens Boots Alliance suddenly evaporated tens of billions of dollars.

However, facts have proved that such cooperation is not mature enough. The project failed to start smoothly. In January 2021, Haven declared bankruptcy. The three companies said that Haven had made "good progress" in improving the medical health of employees, and they would continue to communicate "informally".

However, the external post-mortem analysis at that time concluded that even the cooperation of such three influential companies was not enough to force mature medical service providers to provide cheaper medical services.

Haven's ending also foreshadows another thing: Amazon has become increasingly strong in reducing the medical costs of employees.

Amazon has more than 1 million employees in the United States alone, which has laid the foundation for the large-scale implementation of its massive health plan. One plan is to cooperate with Crossover Health in California to provide Amazon employees, their spouses and children with access to the network of medical and health centers. So far, the plan has been launched in five regions and is expected to cover more regions in the future.

In 2018, Amazon acquired PillPack, a prescription drug mailing service located in New Hampshire, USA. This once again triggered market volatility. But after the acquisition, Amazon let the company operate almost completely independently. At the end of last year, Amazon took the action that everyone had expected for a long time - to launch Amazon pharmacy and provide distribution and discount services in CVS Health and other physical stores.

Figure: Senator Elizabeth Warren expressed concern about Amazon's growing influence

In July this year, Amazon launched Amazon Dx, a service that provides home coronavirus detection. Through Amazon Dx, people can book a suite on Amazon website, send the sample back, and obtain the test results within 24 hours. This is probably just the beginning: the recruitment information shows that Amazon will further launch various tests. A recent recruitment information shows that the company is seeking talents who "communicate with local, state and national regulators for clinical diagnosis".

Analysts realize that this is a familiar pattern. Solutions developed for Amazon's own needs (such as the company must do nucleic acid testing for COVID-19 for warehouse workers) are being redesigned for use by others. At first, AWS was also an internal computing system that supported Amazon's infrastructure. Amazon's medical and health system is gradually open to everyone.

Jeff Becker, chief medical and health analyst at CB Insights, said: "Many large self financing factories want to really reduce medical costs. If Amazon can do this, they will have another profitable business line. At present, their progress in this direction seems to be very smooth."

In March this year, Amazon announced that it would provide its telemedicine product Amazon Care to companies all over the United States. The service supports video consultation with doctors or nurses 24 hours a day, and provides face-to-face communication in some areas. Since 2019, the service has been open to employees near Amazon's Seattle headquarters as part of a pilot project. This service is managed by the third party contractor Care Medical.

According to a media report in July, Amazon said that "several" companies have signed up to use Amazon Care. The report also said that Amazon is in contact with major insurance companies to make the service benefit tens of millions of patients. Amazon said that it would not comment on any speculation about the plan.

Babak Parviz, an executive of Amazon, talked about Amazon's ambition in the medical and health field at an event in June. He said: "We must respond with humility. Although the front is full of unknown, we will also be optimistic. Our goal is to do something good for everyone."

The timing was just right. McKinsey data shows that in February this year, the use of telemedicine services in the United States was 38 times higher than before the epidemic. The relaxation of regulations on which types of medical care can be implemented via the Internet is also a contributing factor.

Picture: Amazon, the sleeping giant in the medical and health field, has now come to life.

Arielle Trzcinski, chief analyst of Forrester, said: "Amazon will roll up the whole industry because they can meet consumers flexibly without location restrictions."

Glen Tullman, CEO of Chicago based health technology company Transcarent, said that the American public has suffered from the complex network of the country's medical and health system for a long time, and everyone will very much welcome the "Amazonization" of the medical and health system. Talman had previously founded a health equipment company, Livongo, which has cooperated with Amazon to launch a number of plans, including the development of voice controlled sphygmomanometers.

Talman said: "The medical and health industry has been claiming for the past two decades that it will make the medical and health system not simple, orderly and cheap... However, it has not."

He went on to say: "It is because Amazon has no hospital and no ready-made (medical) organizational structure that it can start from scratch. Amazon can claim to 'do anything best for you' and make a lot of profits from it."

　　 "Seize the territory"

Jeff Bezos, former CEO of Amazon, once described AWS as "the luckiest business in business history", because AWS "hasn't met with competitors in almost seven years".

Although AWS has taken the lead, Amazon lags behind other technology giants in providing customized cloud tools for medical and health providers. According to CB Insights data, Microsoft and Google currently have more medical and health customers than Amazon.

Becker said: "AWS mainly started late in customization. Microsoft and Google launched some key medical and health specific functions early. One of them is called HITRUST, which allows hospitals to prove the security of their infrastructure."

AWS is also aware of this backwardness. In the past year, Amazon has worked harder to overcome its disadvantages. Amazon launched AWS for Health in July, a series of services tailored for medical and health providers, including AWS Healthlake, a tool that uses machine learning to ingest and standardize health data.

Figure 7: Solutions developed for Amazon's own needs (for example, the company must do nucleic acid testing for COVID-19 for warehouse center workers) are being redesigned for use by others.

A member of AWS medical team said: "Now is the critical moment to seize the territory. Many hospital systems are basically making decisions: Do we need to transfer our data from the physical server to Microsoft, Google or AWS's cloud server?"

In order to find more applications that can be integrated, at the end of September, Amazon announced the first batch of members of AWS Healthcare Incubation Program, a total of ten start-ups. This is a four week strengthening project aimed at helping mature but relatively small health technology companies to land in AWS.

AWS staff explained: "This is like an app store. They will check the stability of your app and ensure that it is legal and compliant."

According to three people familiar with the project, one of the companies registered to participate in the project is Pieces, headquartered in Texas, USA. Pieces uses artificial intelligence to predict the patient's progress.

Gyant, another company, works as a digital assistant, which aims to relieve the working pressure of the hospital call center by guiding patients to chat robots.

And Giblib, which provides access to doctors Netflix Quality video and virtual reality experience for startups. Its videos meet the state's minimum requirements for medical practitioners to renew their licenses.

　　 Compete for the market

The incubation project, to a certain extent, shows the target range of Amazon in the field of health care. But now Amazon is on the cusp of the storm, and this position may not be welcomed. Many legislators, including Senator Elizabeth Warren, have called for splitting Amazon.

Professor Robert Huckman, the chairman of the faculty of Harvard Business School's medical health program, said: "The outside world is increasingly worried about how large Amazon will be. Medical health is an important business. Including medical health in its business map will cause more concerns from the perspective of integration."

It is even more worrying to what extent Amazon may play a more critical role by having its own clinic or becoming an insurance company.

Hackman said: "If Amazon can directly attract more patients in the name of Amazon, they will also start to obtain medical records. Regulators will think, 'How far are we willing to let these retail and technology companies go?'"

Amazon is not waiting to die. Amazon said that in the medical and health field, the competition is particularly fierce. Amazon will compete with insurance companies such as Cigna and other retailers such as Wal Mart in the field of health care.

For its front-line services, Amazon's strategy is to persuade consumers (including many older consumers who are used to offline) to switch from hospitals that have long been used to and trusted to online medicine. Charlie O'Shea, an analyst at Moody's, believes that this is much harder than convincing people to try online bookstores.

O'Shea said, "This will be a long battle. If offline pharmacies can meet the needs of surrounding residents, what power will people have to turn to online? I think this time, compared with all previous Amazon projects, it will take longer and the competition will be more intense."